The Tax Publishers2019 TaxPub(DT) 3590 (Kol-Trib)

INCOME TAX ACT, 1961

Section 5(2)(a)

In view of decision held in case of Utanka Roy v. DIT, International Taxation : 2017 TaxPub(DT) 47 (Cal-HC) assessee's foreign inward remittance on account of salary for services rendered in Nigeria has to be considered as income accrued and received out of India and hence not taxable in India on account of receipt basis.

Income - Accrual - Foreign inward remittance for services rendered outside India -

Assessee filed appeal against the order of AO treating its foreign inward remittance on account of salary for services rendered in Nigeria as taxable in India under the provisions of the Act invoking the provisions of section 5(2)(a) read with section 15(a).Held: The assessee's paper book reveals that the employer/payer had indeed deduced TDS from his salary and bonus in Nigeria which stood credited to the said Government account. It was therefore not a case of double non taxation as argued at the Revenue's behest. It thereafter transpires that the jurisdictional High Court's decision in the case of Utanka Roy v. DIT (supra) holds that the salary income for services rendered outside India has to be considered as income accrued and received out of India is not taxable in India. The question as to whether the assessee had rendered services in India or not was a question of fact. It was not disputed that the assessee had rendered services outside India for the period of 286 days. He had received his remuneration for such work from a foreign company. Consequently, the income received by the petitioner for services rendered outside India has to be considered as income received out of India and treated as such. In view of detailed reasonings mutatis mutandis conclude in this view of the matter that AO had erred in taxing the assessee's foreign inward remittance on account of salary for services rendered in Nigeria to be taxable in India on receipt basis. The impugned addition stands deleted accordingly.

Followed:Utanka Roy v. DIT, International Taxation : 2017 TaxPub(DT) 47 (Cal-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12



IN THE ITAT, KOLKATA 'C' BENCH

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT