DDIT(IT)-1(1), Kolkata, Kolkata V. Mr. Gautam Bhattacharya, Kolkata

ITA 1986/KOL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1732 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Services rendered outside India
• Section: 5(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, HONBLE A CCOUNTANT M EMBER & SRI ABY T. VARKEY , HONBLE JUDICIAL MEMBER ] I .T.A. NO. 1986 /KOL /201 4 ASSESSMENT YEAR: 20 11 - 12 DDIT (IT) - 1(1), KOLKATA.. . .. APPELLANT ROOM NO. 210 2 ND FLOOR, AAYAKAR BHAWAN POORVA 110, SHANTI PALLY KOLKATA 700 107 MR. GAUTAM BHATTACHARYA .... .. . .. .. . . RESPONDENT 31E, TOWER - 4 375, PRINCE ANWAR SHAH ROAD SOUTH CITY KOLKATA 700 068 [PAN : AADFP 4903 G] APPEARANCES BY: NONE , APPEAR ED ON BEHALF OF THE ASSESSEE. SHRI N.B. SOM , ADDL. CIT , DR, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 7 TH , 2017 DATE OF PRONOUNCING THE ORDER : JANUARY 19 TH , 201 8 O R D E R PER J. SUDHAKAR REDDY : - THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - VI , KOLKATA , (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 04 / 08 /201 4 , FOR THE ASSESSMENT YEAR 20 11 - 12 . 2. FACTS IN BRIEF: - THE ASSESSEE, IN THIS CASE IS AN INDIVIDUAL AND IS EMPLOYED AS THE MANAGING DIRECTOR AND CHIEF OPERATING OFFICER IN A NIGERIA BASED COMPANY. HE WAS A NON - RESIDENT AND WAS WORKING IN NIGERIA. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS RENDERED SERVICES IN NIGERIA AND THE SALARY WAS ACCRUED AND DUE IN NIGER IA. PART OF THE SALARY WAS RECEIVED BY THE ASSESSEE IN HIS BANK ACCOUNT IN INDIA. THE ASSESSING OFFICER WAS OF THE VIEW THAT THIS ACCOUNT IS TAXABLE IN INDIA, U/S 5(2)(A) R.W.S. 15(A) OF THE ACT. 2 I.T.A. NO. 1986/KOL/2014 ASSESSMENT YEAR: 2011 - 12 MR. GAUTAM BHATTACHARYA 2.1. ON APPEAL, THE LD. FIRST APPELLATE AUTHORITY, APPLIED THE DECISION OF THE JURISDICTIONAL BENCH OF THE TRIBUNAL IN THE CASE OF RANJIT KUMAR BOSE VS. ITO, [1986 ] 225 TTJ 86 (KOL. TRIB.), AND THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS SRI PRAHLAD VIJENDRA RAO [2011] 98 TAXMANN 551 (KARNATAKA) , AND HELD THAT SALARY FOR SERVICE RENDERED OUTSIDE INDIA, CANNOT BE BROUGHT T O TAX ON INDIA ON RECEIPT BASIS. 3. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD SHRI N.B. SOM, THE LD. D/R. HE SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE INCOME IN QUESTI ON IS TAXABLE IN INDIA. 4.1. WE FIND THAT THE JURISDICTIONAL HIGH COURT IN THE CASE OF SMT. SUMANA BANDYOPADHYAY & ANR VS . THE DEPUTY DIRECTOR OF INCOME TAX IN GA 3745 OF 2016 WITH ITAT 374 OF 2016 , JUDGEMENT DT. 13TH JULY, 2017 , UNDER SIMILAR CIRCUMSTAN CES HELD AS FOLLOWS: - 5. AS REGARDS THE LEGAL POSITION IN A SIMILAR SITUATION, CLARIFICATION HAS BEEN GIVEN BY THE MINISTRY OF FINANCE ON 11TH APRIL 2017 UNDER CIRCULAR NO. 13/2017. THIS CIRCULAR SPECIFIES: - 'SUBJECT: CLARIFICATION REGARDING LIABILITY TO INCOME - TAX IN INDIA FOR A NON - RESIDENT SEAFARER RECEIVING REMUNERATION IN NRE (NON RESIDENT EXTERNAL) ACCOUNT MAINTAINED WITH AN INDIAN BANK. REPRESENTATIONS HAVE BEEN RECEIVED IN THE BOARD THAT INCOME BY WAY OF SALARY, RECEIVED BY NON - RESIDENT SEAFARERS, FOR SERVICES RENDERED OUTSIDE INDIA ON - BOARD FOREIGN SHIPS, ARE BEING SUBJECTED TO TAX IN INDIA FOR THE REASON THAT THE SALARY HAS BEEN RECEIVED BY THE SEAFARER INTO THE NRE BANK ACCOUNT MAINTAINED IN INDIA B Y THE SEAFARER. 2. THE MATTER HAS BEEN EXAMINED IN THE BOARD SECTION 5(2)(A) OF THE INCOME - TAX ACT PROVIDES THAT ONLY SUCH INCOME OF A NON - RESIDENT SHALL BE SUBJECTED TO TAX IN INDIA THAT IS EITHER REC EIVED OR IS DEEMED TO BE RECEIVED IN INDIA. IT IS HEREBY CLARIFIED THAT SALARY ACCRUED TO A NON - RESIDENT SEAFARER FOR SERVICES RENDERED OUTSIDE INDIA ON A FOREIGN SHIP SHALL NOT BE INCLUDED IN THE TOTAL INCOME MERELY BECAUSE THE SAID SALARY HAS BEEN CREDIT ED IN THE NRE ACCOUNT MAINTAINED WITH AN INDIAN BANK BY THE SEAFARER.' 6. WE CONCUR WITH THE RATIO OF THE DECISION OF THE KARNATAKA HIGH COURT AND IN OUR OPINION THE INTERPRETATION BE GIVEN TO SUB SECTION (B) OF SECTION 5(2) OF THE ACT WOULD ALSO APPLY TO SECTION 5(2)(A) OF THE ACT. THE CIRCULAR IS CLARIFICATORY IN NATURE AND IS APPLICABLE FOR CONSTRUING THE AFORESAID PROVISION FOR THE RELEVANT ASSES SMENT YEAR. IN OUR OPINION THE AUTHORITIES UNDER THE INCOME TAX ACT DID NOT PROPERLY APPLY THE PROVISIONS OF LAW TO THE CASE OF THE ASSESSEE. WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS WRONG IN AD DING THE AFORESAID SUM TO THE INCOME CHARGEABLE TO TAX OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. WE ACCORDINGLY ALLOW THE APPEAL AND ANSWER THE QUESTION FRAMED B Y US IN FAVOUR OF THE ASSESSEE. 3 I.T.A. NO. 1986/KOL/2014 ASSESSMENT YEAR: 2011 - 12 MR. GAUTAM BHATTACHARYA 5. RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT, WE UPHOLD THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY AND DISMISS THIS GROUND OF THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE 19 TH DAY OF DECEMBER , 2017 SD/ - SD/ - [ABY T. VARKEY] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 . 01 .201 8 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. MR. GAUTAM BHATTACHARYA 31E, TOWER - 4 375, PRINCE ANWAR SHAH ROAD SOUTH CITY KOLKATA 700 068 2. DDIT (IT) - 1(1), KOLKATA ROOM NO. 210 2 ND FLOOR, AAYAKAR BHAWAN POORVA 110, SHANTI PALLY KOLKATA 700 107 3. CIT(A) - 4. CIT - , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES