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The Tax Publishers2019 TaxPub(DT) 7627 (Kol-Trib) : (2020) 203 TTJ 0026 INCOME TAX ACT, 1961
Section 263
AO had indeed called for information and documents and after due application of mind passed assessment order under in which he accepted assessee's plea for exclusion of foreign assignment allowance was not chargeable to tax in India. In such a scenario assessment order could not be held as erroneous and prejudicial.
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Revision under section 263 - Erroneous and prejudicial order - Allegation of no taxation of foreign assignment allowance in violation of section 5(2)(a) without any enquiry -
Assessee was sent by his employer IBM on short-term assignment to Switzerland for which he was stationed there for 349 days during the relevant financial year 2013-14. Since his stay outside India for the purpose of employment exceeded 182 days during the relevant year, his residential status for the year under consideration was 'non-resident'. During the year, assessee received Foreign assignment allowances on account of the international assignment. CIT held order passed by AO as erroneous and prejudicial to the interest of revenue on the ground of AO not having taxed foreign assignment allowance in violation of section 5(2)(a) without any enquiry.Held: Prior to completion of assessment under section 143(3), AO required assessee to furnish explanations with regard to his claim for exclusion of foreign assignment allowance from the ambit of his taxable total income in India. In response, assessee furnished requisite documentary evidences which proved foreign assignment allowance which was excluded from the ambit of total income taxable in India, had suffered applicable tax in Switzerland being the country where services were actually rendered. Having considered these evidences, explanations and applicable legal provisions, AO recorded specific finding that assessee was in India only for 16 days and for rest of the period he was in assignment to Switzerland and had received foreign assignment allowance'. All these facts and documents considered harmoniously showed that AO had indeed called for information and documents and after due application of mind passed assessment order under in which he accepted assessee's plea for exclusion of foreign assignment allowance was not chargeable to tax in India. In such a scenario assessment order could not be held as erroneous and prejudicial.
Supported by:Malabar Industries Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, KOLKATA BENCH
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