PARTHA MUKHERJEE,DURGAPUR vs. I.T.O., WARD - 3(3), , SURI, BIRBHUM

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ITA 2041/KOL/2024Status: DisposedITAT Kolkata05 May 2025AY 2014-20153 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was a non-resident under Section 5(2) of the Income Tax Act. Since the services were rendered outside India and there was no evidence that the income accrued or arose in India, it was not taxable in India. Consequently, the Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to delete the additions.

What were the facts?

The assessee, a non-resident employed by IMB India Private Limited, rendered services abroad but received salary and assignment allowances. Although the assessee filed the return as a non-resident, the Assessing Officer treated him as a resident and made additions, which the CIT(A) affirmed.

What were the issues?

Whether income earned by a non-resident for services rendered outside India is taxable in India, especially when the residential status is disputed by the tax authorities.

Which sections of the Income-tax Act were involved?

Section 5(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM

For Appellant: Shri Akash Mansinka, AR
For Respondent: Shri S.B. Chakraborthy, DR
Hearing: 09.04.2025Pronounced: 05.05.2025

These are appeals preferred by the assessee against the order of the Commissioner of Income-tax (Appeals) Kolkata (hereinafter referred to as the “Ld. CIT(A)”] even dated 02.08.2024 for the AY 2014- 15 & 2015-16.

2.

The common issue raised in both the appeals are against the order of ld. CIT (A) affirming the assessment order wherein the AO has made an addition by ignoring the fact that the assessee is a non-resident and not liable to be taxed in India.

3.

The facts in brief are that the assessee was a non-resident during the relevant assessment year. He was employed with IMB India Private Limited and rendering services abroad. The assessee filed the return of income as non-resident, a copy of which is available in paper book page no. 1 to 8. However, the ld. AO treated the residential status as resident, framed the assessment accordingly.

5.

After hearing the rival contentions and perusing the materials available on record, I find that in this case, the assessee is a non-resident and the income received by the assessee by way of salary in India as well abroad is not to be taxed in India as the assessee was a non-resident u/s 5(2) of the Act and only the income received or deemed to have been accrued is is taxable in India in case of non-resident. In this case it is undisputed that assessee has rendered services outside India and there was no iota of evidence brought on record by the ld. AO suggesting that income has accrued or has origin in India. Accordingly, I set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. The case of assessee is squarely covered by the decision of the co-ordinate Benches in the case of Manab Chandra Ghosh Vs. ACIT in for A.Y. 2016-17 vide order dated 27.11.2024, wherein the co-ordinate Bench has held as under:-

“6. We, after hearing the rival submissions of the parties and perusing the material available on record, find that based on the passport details, the assessee was present in India for only 61 days during the financial year 2015-16 which qualifies as a non-resident u/s 5(2) of the Act and only income received or deemed to have accrued or arisen in India, is taxable for a non-resident. We undisputedly note that the assessee is a non- resident employee in IBM India Pvt. Ltd. (an Indian Company) and was sent to abroad to Indonesia for rendering services there. We find no dispute that the services were rendered in Indonesia and the foreign assignment allowances received by the assessee for services rendered in Indonesia and no evidence suggests that income accrued or arose in India. We note that the assessee failed to produce the TRC before the Assessing Officer, which is a procedural lapse and does not negate the substantive compliance. After considering the facts and circumstances of the case and following the decision in 2042/KOL/2024 for A.Y. 2015-16

7.

The issue raised in this appeal is similar to one as decided by us in ITA No. 2041/KOL/2024. Accordingly, our decision would, mutatis mutandis, apply to this appeal of assessee in for A.Y. 2015-16. Hence, the appeal of assessee in is allowed.

8.

In the result, both the appeals of the assessee are allowed.

Order pronounced in the open court on 05.05.2025.

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