Venkata Ramarao Telakalapalli , Hyderabad V. Income Tax Officer, (International Taxation)-1, Hyderabad

ITA 1992/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0798 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2014-2015
• Appeal Filed On: 03-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PURUSHOTHAM ANAND
• Section: 143(3); 5(2); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE S HRI S.S. GODARA , JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1992 / HYD/201 8 ASSESSMENT YEAR: 201 4 - 15 SHRI VENKATA RAMA RAO TELAKALAPALLI HYDERABAD [PAN: A JNPR7153F ] VS. ITO, INTERNATIONAL TAXATION - 1 HYDERABAD ( APPELLANT) (RESPONDENT) ASSESSEE BY: SRI PURUSHOTHAM ANAND, ADV. REVENUE BY : SRI SUNIL KUMAR PANDEY, DR DATE OF HEARING: 0 4 / 02 / 2021 DATE OF PRONOUNCEMENT: 25 /02/ 20 21 ORDER PER BENCH THIS ASSESSEES APPEAL FOR A.Y. 2014 - 15 IS DIRECTED AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS) 1 0 [CIT(A) FOR SHORT] , HYDERABADS ORDER DATED 19. 04.201 8 IN CASE NO. 0202/2016 - 17 , INVOLVING PRO CEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 [ THE ACT FOR SHORT]. ITA NO 1992 /HYD/1 8 AY 201 4 - 15 SRI VEKATA RAMARAO TELAKALAPALLI , HYD. 2 H EARD BOTH PARTIES. CASE FILE PERUSED. 2. IT TRANSPIRED AT THE OUTSET THAT THE ASSESSEE S SOLE SUBSTAN TIVE GRIEVANCE CHALLENGES THE CORRECTNESS OF BOTH LOWER AUTHORITIES ACTION ASS ESSING HIM AS A NON - RESIDENT FOR THE PURPOSE OF TAXING RS. 28,33,02 7/ - REPRESENTING FOREIGN ALLOWANCES RECEIVED FOR SERVICES PERFORMED IN THE NETHERLANDS BY INVOLVING SECTION 5 ( 2 ) OF THE A CT. 2.1. RELEVANT FACTS OF THE INSTANT CASE INDICATE THAT WE NEED NOT DIG MUCH DEEPER INTO THE ISSUE. THIS ASSESSEE HA D ADMITTEDL Y WORK ED AS AN EMPLOYEE OF M/S IBM INDIA PVT. LTD. HE HAD BEEN DEPUTED IN LIEU OF SERVICE PERFORMED OUTSIDE INDIA WHICH IN TURN LED TO THE AMOUNT IN ISSUE RECEIVED AS FOREIGN ALLOWANCE(S). 2.3. THE R EVENUE S CASE IN LINE WITH LOWER AUTHORITIES ACTION IS THAT SEC. 5(2) COMES INTO PLAY THE MOMENT IMPUGNED S UM HAS BEEN CREDITED OR RECEIVED IN INDIA AND ANY DEVIATION THERE OF SHALL RENDER THE STATUTORY PROVISIONS ITSELF AS REDUNDANT . WE FIND NO MERIT IN R EVENUE S FOR E GOING STAND . V ARIOUS JUDICIAL PRE CEDENTS HONBLE BOMBAY HIGH COURT IN CIT VS. AVTAR SINGH WADHWA N REPORTED IN 247 ITR 2 60 (BOM.) ; DIT VS . PRAHLAD V RAO 198 TAXMAN 551 (KAR) AND UT ANKA ROY VS. DIT WP NO.369/2014 DATED 15.12.2016 (CAL CUTTA HC) H O LD THAT SUCH AN INCOME DERIVED BY A NON - RESIDENT FOR PERFORMING SERVICE ACTIVITIES OUTSIDE INDIA , THE ACCRUAL OF INCOME ITA NO 1992 /HYD/1 8 AY 201 4 - 15 SRI VEKATA RAMARAO TELAKALAPALLI , HYD. 3 THEREON HAPPENS OUTSIDE INDIA COULD NOT BE BROUGHT TO TAX IN INDIA AS PER S.5(2) OF THE ACT. W E THUS DELETE THE IMPUGNED ADDITION FOR THIS PRECISE REASON ALONE. THIS ASSESSEES A PPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY, 2021 . SD/ - SD/ - ( L.P. SAHU ) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER HYDERABAD, DATED 25 TH FEBRUARY, 2021 . * GMV COPY TO: 1 SRI VENKATA RAMARAO TELAKALAPALLI, C/O ANKITA GUPTA, IBM INDIA PRIVATE LIMITED ( IA TAX TEAM ) BLOCK D1, 4 TH FLOOR, MANYATA BUSINESS PARK, OUTER RING ROAD, NAGAWARA, BENGALURU 560 045 KARNATAKA . 2 ITO, INTERNATIONAL TAXATION - II , HYDERABAD 3 CIT (A) - 10 HYDERABAD 4 PR. CIT - 1 0 , HYDERABAD 5 CCIT (INTERNATIONAL TAXATION) (SZ) BENGALUR U THE DR, ITAT HYDERABAD 7 GUARD FILE