TMI Blog2024 (2) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the assessee finds support from the decision of Arvind Singh Chauhan [ 2014 (3) TMI 18 - ITAT AGRA] wherein held once it is not in dispute that the assessee qualifies to be treated as a 'non-resident' under Section 6 of the Act, as is the undisputed position in this case, the scope of taxable income in the hands of the assessee, under Section 5(2), is restricted to (a) income received or is deemed to be received in India, by or on behalf of such person; and (b) income which accrues or arises, or is deemed to accrue or arise to him, in India. Therefore, it is only when at least one of these two conditions is fulfilled that the income of a non-resident can be brought to tax in India. In the present case, the services are rendered outside India as crew on merchant vessels and tankers plying on international routes. A salary is compensation for the services rendered by an employee and, therefore, situs of its accrual is the situs of services, for which salary paid, being rendered. Appeal of the assessee is allowed. - Shri Rajesh Kumar, Accountant Member For the Appellant : Shri Nageswar Rao, Sr. Counsel Shri Parth, Advocate. For the Respondent : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and perusing the material on record, we find that undisputedly the assessee is a non-resident employee in an Indian Company IBM India Pvt. Ltd. and was sent abroad to UK for rendering services there. There is no dispute that the service was rendered in UK though the appointment made in India. The assessee has received total salary as stated above and the same has been returned and offered to tax in UK. The income tax return and certificate of residence has been placed in the paper book from page no. 27 to 32. The assessee claimed relief as per DTAA between India and United kingdom which was not allowed for the want of tax residency certificate by the AO. In our opinion, once the assessee qualifies to be treated as non-resident u/s 6 of the Act then the scope of the taxable income is in the hands of assessee would be as per Section 5(2)(b) of the Act. In the present case also the assessee undisputedly is a non-resident and therefore the salary received by the assessee while rendering service in abroad is not taxable in India. The case of the assessee finds support from the decision of Hon ble Co-ordinate Bench of Agra in the case of Arvind Singh Chauhan vs. ITO in [2014] 42 taxman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e merits. Similar finding has been taken in the case of ITO vs. Sri Sunil Chitaranjan Muncif in [2013] 35 taxmann.com 142 (Ahmedabad-Trib) wherein the Hon ble Bench has held as under: 10. After hearing both the parties and perusing the record, we find that there is no dispute about the fact that assessee is a NRI and the salary income received by him in India for employment exercised in U.K. has been offered by him for taxation in U.K in pursuance of Article 16 of DTAA with U.K. On these facts Ld. CIT(A) by following the advance ruling in the case of British Gas India (P.) Ltd. In re [2006] 287 ITR 462/157 Taxman 225 (AAR New Delhi) has rightly held that the salary received by the assessee was not taxable in India in pursuance of DTAA between India and U.K. therefore the order passed by him is hereby upheld. In the case of Sreenivasa Reddy Cheemalamarri vs. ITO in [2020] 118 taxmann.com 684 (Hyderabad-Trib) wherein the Bench has held as under: 11. I have considered the rival submissions and carefully perused the material on record. From the Orders of the Ld. Revenue Authorities, I find that the Ld. AO has disallowed the exemption claimed by the assessee unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxable only in that state unless the employment is exercised in the other contracting state. If the employment is so exercised, such remuneration as is derived therefore may be taxed in that other state. Further, Article 4(1) the IndiaAustria DTAA defines the term resident as under: For the purposes of this convention, the term 'resident of a contracting state' means any person who, under the laws of that state, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, and also includes that state and any political sub-division or local authority thereof. 13. Therefore, in the case before me the following conditions are required to be satisfied to claim exemption under Article 15(1) of the India -Austria DTAA: - The person should be a resident of Austria and - The salary and other remuneration should be earned in respect of employment exercised in Austria. 14. From the facts of the case it is apparent that during the previous relevant to AY 2014-15, the assessee qualifies as a non-resident in India and as a tax resident in Austria. The salary and allowances are earned by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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