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TMI Blog2024 (11) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... een India and UK and also exemption of Rs. 4,35,169/- u/s 10(14)(i) of the Act. The assessee claimed refund of Rs. 6,19,250/-. The case was selected for scrutiny under CASS and notice u/s 143(2) of the Act dated 29.06.2021 was issued and duly served on the assessee. Notice u/s 142(1) of the Act were issued on various dates and duly served. The assessee was an employee of the M/s Ernst & Young LLP, India in the financial year 2019-2020. He had been sent on international assignment to and salary for that period had been paid in India by employer. In the year under consideration, the assessee received gross salary of Rs. 34,33,780/- and TDS of Rs. 6,20,705/- was deducted by M/s Ernst & Young LLP. As per the assessee, he stayed in India for less than 60 days during the previous year 2019-20 relevant to the assessment year 2020-21. Therefore, he qualified as a Non Resident in India during the previous year 2019-20 under section 6(1) of the Act. Thus, the assessee qualifies as a tax resident of for the previous year 2019-20. Regarding assessment proceedings, the National e-assessment Centre issued statutory notices u/s 143(2) and 142(1) of the Act, and later on transferred the case to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Ernst & Young LLP'. The appellant received gross salary of Rs. 23,26,204/- for services rendered in UK to M/s Ernst & Young LLP and claimed exemption under Article 15(1) of DTAA between India and UK. 05. The salary continued to be paid in India by the employer 'M/s Ernst & Young LLP'. The assessee submitted before AO that assessee being tax resident of UK, the salary income was taxable in UK only and the same has been offered to tax in UK. It was further contended before AO that assessee being non-resident, the salary received in India for work performed in UK would be exempt in India as per Article 15(1) of DTAA between India and UK. The assessee submitted before ld. Assessing Officer that salary is taxable in India only if it accrues in India and salary is considered to be accrued where the employment is exercised. However, Ld. AO held that the assessee did not shift his employer and the assessee continued to be on the payroll of its employer. There existed employer-employee relationship. Therefore, the income so received would be chargeable to tax in India under section 15 of the Act which provides that any salary due from an employer would be chargeable to tax under the hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Sec.5(2) are subjected to other provisions of the Act. The regular salary accrued to any assessee is chargeable to tax in terms of Sec.15(a). Even as per the provisions of Sec.9(1)(ii), salary income could be deemed to accrue or arise in India only if it is earned in India in respect of services rendered in India. The bench, reading down Article-1 and Article-15 of India-Australia DTAA, held that Treaty benefit shall be applicable to persons who are residents of both India as well as Australia. Therefore, the contention of the revenue that the assessee being a non-resident and hence treaty benefit cannot be extended to assessee, is incorrect. Accordingly, it was held by the bench that the salary so earned for work performed in Australia would be taxable in Australia. The case law of Swaminathan Ravichandran V/s ITO (ITA No.2911/Mds/2016 dated 05.08.2016) was held to be factually distinguished on the ground that in that case the assessee was claiming foreign tax credit relief for taxes paid on doubly taxed income which was not the case in that appeal. In para-7, the bench found the issue to be covered in assessee's favor by various judicial precedents including the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgeable to tax in terms of Sec.15(a). Even as per the provisions of Sec.9(1)(ii), salary income could be deemed to accrue or arise in India only if it is earned in India in respect of services rendered in India. The bench, reading down Article-1 and Article-15 of India-Australia DTAA, held that Treaty benefit shall be applicable to persons who are residents of both India as well as Australia. Therefore, the contention of the revenue that the assessee being a non-resident and hence treaty benefit cannot be extended to assessee, is incorrect. Accordingly, it was held by the bench that the salary so earned for work performed in Australia would be taxable in Australia. The case law of Swaminathan Ravichandran V/s ITO (ITA No.2911/Mds/2016 dated 05.08.2016) was held to be factually distinguishable. 5.We find that similar fact exists before us in the present appeal. The proportionate salary for services rendered in India has already been offered to tax in India whereas the balance salary has been offered to tax in UK. The salary reconciliation statement has been placed by Ld. AR on record. The assessee has not claimed any foreign tax credit in any of the jurisdiction. The UK tax has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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