Kapil Dev Ranwan v. DCIT [ITA No. 875/Del/2017, dt. 5-11-2020] : 2020 TaxPub(DT) 4558 (Del-Trib)

Availing Article 24 Tax credit under Indo-UK DTAA

Facts:

Assessee was an employee of IBM India and was on secondment to UK where his stay during the year was 241 days whereby his salary income was taxed in UK on which taxes were paid in UK. He filed a revised income where in the tax credit of UK was claimed under Article 24 of the Indo-UK DTAA. The said income was also taxable in India by his being a resident. This tax credit was refused by the AO/CIT(A) holding that the assessee would fall under Dependent Personal Services (DPS) viz. Article 16(2) of Indo-UK DTAA holding erroneously that his stay in UK is less than 183 days and hence the income cannot be taxed in UK and thus erroneously tax was paid in UK which is claimed as relief in India and hence not allowable. On higher appeal --

Held in favour of the assessee that he was entitled to tax credit relief under Article 24 of the doubly taxed income in UK and in India.

Conditions to avail tax credit under DTAA is as under --

(a) a resident of India derives items of income.

(b) Such items of Income have been tax in UK.

(c) Such taxation is in accordance with the provisions of the convention.