By GEETA JANI | DHISHAT B. MEHTA
Chartered Accountants
11
TS-220-ITAT-2019(Kol)
Deepak Kumar Todi vs. DDIT
ITA No. 1918/Kol/2017
A.Y.: 2011-12
Dated: 16th April, 2019
Section 5(2)(a) and section
15 of the Income-tax Act, 1961 – salary remitted to NRE account in India for
services rendered in Nigeria is not taxable in India on receipt basis
FACTS
The
assessee, a non-resident individual, was employed in Nigeria. For the relevant
year under consideration, the Assessee received foreign inward remittances in
his NRE account maintained in India on account of salary for the services
rendered in Nigeria. The assessee contended that such salary amount was
transferred by the employer only under due instructions of the assessee. Thus,
the constructive receipt of such salary is out of India and the money received
in the NRE account of the assessee is mere remittance which cannot constitute income
‘received or deemed to be received in India’ within the meaning of section
5(2)(a) of the Act.
The AO,
however, was of the view that receipt of salary in India by way of direct
remittance by the foreign employer to the assessee’s bank account in India
would amount to first receipt in India. Further, as the income has not been
taxed in Nigeria, non-taxation of such amount in India would amount to double
non-taxation. Consequently, the AO taxed such amount as salary income under the
Act.
Aggrieved,
the assessee appealed before the CIT(A) who upheld the AO’s order. Still
aggrieved, the assessee appealed before the tribunal.
HELD
- The tribunal
observed that tax had been duly withheld by the foreign employer on the salary
income of the assessee. It was, therefore, not a case of double non-taxation of
income. Thus, the AO’s observation that the income had neither been taxed in
Nigeria nor in India, was incorrect to this extent.
- Reliance was
placed on the Calcutta HC ruling in Utanka Roy vs. DIT, International Tax
(390 ITR 109) to hold that the salary income for services rendered
outside India had to be considered as income accruing outside India and, hence,
not taxable in India.
