ANURAG DAMANI,KOLKATA vs. ITO, WARD - 30(1), KOLKATA

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ITA 1774/KOL/2019Status: DisposedITAT Kolkata28 February 2020AY 2012-134 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found merit in the assessee's contention that tax paid in the USA should be given credit or the foreign salary should be excluded from Indian income computation. The AO was directed to allow credit for tax paid in USA or exclude the salary earned in USA.

What were the facts?

The assessee, employed by ICICI Bank, worked in their USA branch from October 2011 to March 2012. While the assessee declared both Indian and foreign income and claimed TDS credit from USA, the CPC rejected this claim due to a mismatch. The assessee argued for credit of US taxes paid or exclusion of US income from Indian taxation.

What were the issues?

Whether credit for taxes deducted at source in the USA on foreign salary income should be allowed in India, considering the tax treaty, or if the foreign income should be excluded from Indian taxation.

Which sections of the Income-tax Act were involved?

Section 192,Section 154,Section 90,Section 91,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B(SMC

Before: Shri A. T. Varkey, JM]

Hearing: 05.12.2019Pronounced: 28.02.2020

This is an appeal preferred by the assessee against the order of Ld. CIT(A)-9, Kolkata dated 06-06-2019 for the assessment year 2012-13.

2.

The sole grievance of the assessee is in respect of taxability of the income earned in USA during the period of his employment. The assessee was employed with the ICICI Bank Ltd Mumbai. During the period of his employment, he was sent to USA at the New York Branch of ICICI Bank Ltd. The period for which he was in USA commenced from 16.10.2011 and ended on 31.03.2012. Income tax was deducted at source as provided u/s. 192 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). In respect of income which the assessee received at USA, the New York Branch of the ICICI Bank Ltd. had deducted withholding tax etc. and the same amounted to US$ 5761.60. According to assessee, he inadvertently, while filing up the return of income not only declared the income earned in India but also declared the income earned abroad and which in India currency came to Rs.16,33,668/-. According to assessee, in the computation of income what the assessee did was that he claimed the amount of TDS which was deducted in USA. The CPC while processing the return of income had not allowed credit of the tax amount which was deducted at USA and paid to the credit of the US Govt. The assessee thereafter submitted an e-filed rectification request for allowing credit of the amount of TDS but the Anurag Damani, AY- 2012-13 CPC proceeded on the basis of the mismatch in the amount of TDS claimed and as appearing in the Form 26AS. The mismatch was only with regard to amount of tax deducted at source in US. The e-filed request for rectification was rejected by CPC.

3.

On appeal, the only prayer of the assessee before the Ld. CIT(A) was that there being Taxation treaty with the US Govt., the assessee is entitled to credit of the amount of tax deducted at source in USA and paid to the credit of the US Govt. by the employer at New York. The prayer of assessee was that either the amount of tax given in USA be given credit or in the alternative, the income which has been earned in USA be taken outside the computation of the total income being determined in India. However, Ld. CIT(A) rejected the prayer of the assessee. Aggrieved, assessee is before this Tribunal by filing the grounds of appeal

as under: “1. That Ld. Asstt. Commissioner (CPC) erred in law as well as in fact in not allowing Tax deducted at source of Rs 2,99,911/- (equivalent to US 5761.60) deducted on salary received as an employee in IClIi Bank, New York Branch, New York, USA for the period of work as an employee commenced from 16-10-2011 to 31-3-2012 in original Return of Income filed on 28-03-2013 as well as in rectification order dated 16-09-2013 under section 154 of I.T Act 1961. 2) That Ld. C.I.T(A)- 9 , Kolkata has erred in law as well as in fact in not allowing relief u/s 90/91 of LT Act 1961 for TDS deducted Rs.2,99,911/- on Foreign Salary Income of Rs 16,33,668/- (Net) received in New York, USA. 3) That Ld. C.I.T (A)- 9, Kolkata has failed to appreciate that foreign salary of Rs.16,33,688/- has already been shown under Salary Income in Original Return as well Rectified Return filed u/s 154 and 011 the principal of natural law and justice, same income cannot be subject to tax twice i.e. in India as well as in USA.”

4. Heard both the parties and we note that the assessee is an Individual having income of salary from ICICI Bank Ltd. (Domestic & Overseas) submitted the return of income electronically to Centralized Processing Centre on 28.03.2013 declaring therein total income of Rs.21,52,759/- comprising of the following: Income from salary Rs.21,31,920/- Income from other sources Rs. 20,839/- Rs.21,52,759/-

Income from Salary received from ICICI Bank Ltd. comprised of the following:

Domestic Taxable salary Rs. 4,98,251/- Foreign salary subject to tax Rs. 16,33,668/- Rs. 21,31,919/- It was brought to my notice that the tax was deducted at sources on salary received in India and credit allowed for the same. However, no benefit of TDS deducted in USA was allowed/given credit in the intimation u/s. 143(1) of the Act. The income from salary received in United States of America having been taxed in that country, the tax so collected and paid, according to assessee ought to have been allowed deduction out of total tax liability determined under Income Tax Act, 1961 which contention I find force with and direct the AO to give credit to the tax paid in USA or exclude the salary earned by the assessee in USA while computing the income taxable in India. Mistake of facts need to be corrected and it is ordered accordingly. Therefore, the appeal of assessee is allowed for statistical purposes.

5.

In the result, the appeal of assessee is allowed for statistical purposes.

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