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 -

The assessee was a non-resident and employed. The assessee filed his return of income electronically for the assessment year 2011-12 on 29-3-2012 declaring a total income of Rs. 7,15,960. CPC Bangalore processed the return under section 143(1) on 17-5-2012. The case was selected for scrutiny through CASS. Accordingly, notices under section 143(2) and 142(1) of the Act were duly issued on the assessee on 7-9-2012 and 2-4-2013. AO made addition of Rs 26,46,638, being the amount received in India as Foreign Inward Remittance on account of salary for services rendered in Nigeria, by treating the same as income of the assessee taxable in India under section 5(2)(a) read with section 15(a) of the Income Tax Act. 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), Tapas Kumar Bandopadhyay v. DDIT (Int. Tax.)-3(1) 2016 TaxPub(DT) 2806 (Kol-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12



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