ACIT(IT), Circle - 1(1), Kolkata, Kolkata V. Shri Debashis Palchaudhuri, Kolata

ITA 2130/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7881 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 04-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Assessee Lawyers: CITA KOLKATA AY RAISED
• Section: 5(2)

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C, KOLKATA BEFORE SH. P.M.JAGTAP, VICE PRESIDENT & SH.S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.2130/KOL/2017 (ASSESSMENT YEAR-2013-14) ORDER PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 21.07.2017 PASSED BY CIT(A)-22, KOLKATA FOR AY 2013-14. 2. THE REVENUE RAISED 10 GROUNDS AMONGST WHICH THE ONLY GROUND EMANATES WHETHER THE CIT(A) IS JUSTIFIED IN HOLDING THAT THE SALARY EARNED OUTSIDE INDIA IS NOT TAXABLE IN THE HANDS OF THE ASSESSEE IN INDIA. 3. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS AN NRI WORKS FOR IBM IN IRELAND. THE AO FOUND THAT THE ASSESSEE EARNED INCOME OF RS.1,01,33,165/- FROM FORM NO.16 ISSUED BY THE IBM INDIA PVT. LTD. FOR NON-COMPLIANCE, THE AO ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE AS AGAINST THE NIL INCOME. THE ASSESSEE CHALLENGED THE SAME BEFORE THE CIT(A) AND CONTENDED THAT THERE WAS NO OPPORTUNITY FOR HIM TO SUPPORT THE RETURN OF INCOME WITH SUPPORTING DOCUMENTS. CONSIDERING THE SAID SUBMISSIONS, THE CIT(A) SOUGHT REMAND REPORT FROM THE AO. IT IS NOTED THAT ACIT(IT), CIRCLE-1(1), KOLKATA-700107. VS SHRI DEBASHIS PAL CHAUDHURI, 193/2, BANERJEE PARA ROAD, PASCHIM PUTIARY, KOLKATA-700041. PAN-AJTPP0087G (APPELLANT) (RESPONDENT) APPELLANT BY SH. S.M.DAS, ADDL. CIT DR RESPONDENT BY SH. NAGESHWAR RAO, ADV. & NAVIN JAIN, CA DATE OF HEARING 24.01.2019 DATE OF PRONOUNCEMENT 2 3 .04 .2019 ITA NO.2130/KOL/2017 (ASSESSMENT YEAR-2013-14) PAGE | 2 CIT(A) DISCUSSED THE REMAND REPORT DATED 18.01.2017 IN ITS ORDER AT PAGE 16. ON PERUSAL OF THE SAID REMAND REPORT, WE FIND THE ASSESSEE IS AN NRI, THE INCOME AS SHOWN BY THE IBM INDIA PVT. LTD. IN FORM NO.16 IS EXEMPT AS IT WAS EARNED DURING 01.04.2012 TO 31.03.2013 BY THE ASSESSEE DURING HIS EMPLOYMENT IN IRELAND I.E. OUTSIDE INDIA AND, THEREFORE, IT IS NOT TAXABLE IN INDIA. THE CIT(A) DISCUSSED THE ISSUE IN DETAIL AT PARA 6(2) TO (5) OF IMPUGNED ORDER. THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREIN BELOW:- 2. I HAVE CAREFULLY CONSIDERED THE ACTION OF THE LD.AO, AND THE ARGUMENTS ADVANCED BY THE APPELLANT DURING THE APPEAL. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT, WHO IS AN INDIAN CITIZEN, WAS EMPLOYED WITH IBM INDIA PRIVATE LIMITED (IBM) DURING THE ASSESSMENT YEAR ('AY') 2013-2014 AND WAS ON AN ASSIGNMENT TO IRELAND DURING THE AFORESAID ASSESSMENT YEAR. WHILE ON ASSIGNMENT, THE APPELLANT CONTINUED TO RECEIVE SALARY AND BENEFITS FROM IBM IN INDIA. FURTHER, THE APPELLANT ALSO RECEIVED A SUM OF INR 6,335,599 AS FOREIGN ALLOWANCES IN IRELAND FOR SERVICES RENDERED IN IRELAND. I FIND THAT THE APPELLANT HAS BEEN ABLE TO PROVIDE THE NECESSARY CERTIFICATE FROM THE EMPLOYER M/S IBM. THE EMPLOYER HAS CERTIFIED THAT THE APPELLANT RECEIVED A SUM OF RS.6,335,599/- OUT OF THE OTHER ALLOWANCES SHOWN IN THE FORM 16 ISSUED BY THEM FOR THE SUBJECT A.Y , AND THIS REPRESENTS AMOUNTS RECEIVED BY THE APPELLANT OUTSIDE INDIA FOR SERVICES RENDERED IN THE IRELAND WHERE HE WAS ASSIGNED DUTIES. IT IS ALSO CLEAR FROM THE COPY OF THE TAX RESIDENCY CERTIFICATE FURNISHED BY THE APPELLANT THAT HE QUALIFIED AS A RESIDENT OF FOR THE IRELAND TAX YEAR 2012 AND 2013. 3. IT IS QUITE APPARENT FROM THE EVIDENCE PROVIDED THAT THE APPELLANT QUALIFIED AS A NON-RESIDENT IN INDIA FOR THE ASSESSMENT YEAR 2013-2014, IN TERMS OF THE PROVISIONS OF SECTION 2(30) READ WITH SECTION 6(1) OF THE INCOME TAX ACT, 1961 (ACT'). ALSO FROM THE TAX RESIDENCY CERTIFICATE FILED BY THE APPELLANT IN THE IRELAND, IT IS QUITE CLEAR THAT THE APPELLANT-INDIVIDUAL QUALIFIED AS A RESIDENT OF IRELAND FOR THE IRELAND TAX--YEAR 2012 AND 2013. THERE IS CLEAR FACTUAL MERIT IN THE CONTENTION OF THE APPELLANT THAT HE WAS NOT REQUIRED TO OFFER THE FOREIGN ALLOWANCES OF RS. 6,335,599 WHICH WAS RECEIVED BY HIM IN IRELAND FOR SERVICE RENDERED IN IRELAND AS THE SAME DOES NOT FORM PART OF TOTAL INCOME IN TERMS OF SECTION 5(2) OF THE ACT. THE APPELLANT WOULD ALSO BE ELIGI61E FOR RELIEF UNDER ARTICLE 15(1) THE INDIA - IRELAND DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA') AMOUNTING TO RS.3,797,566. 4. I FIND THAT THE LD. AO AFTER EXAMINING THE MATTER HAS NOT MADE ANY ADVERSE OBSERVATIONS AS REGARDS THE CLAIMS OF THE APPELLANT. THE RANGE HEAD, HOWEVER WHILE FORWARDING THE REMAND REPORT HAS STATED AS FOLLOWS: 'HOWEVER, THE SATISFACTION OF THE VARIOUS CLAUSES OF RULE 46A MAY KINDLY BE CONSIDERED BY THE LD.CIT(A) KOLKATA AT LEAST IN RESPECT OF THE HOME LOAN INTEREST CERTIFICATE.' IN THIS MATTER IT IS TO BE OBSERVED THAT THE APPELLANT COULD NOT AVAIL THE OPPORTUNITY AT THE TIME OF ASSESSMENT FOR ONE OR OTHER REASON, AND THE DOCUMENTS HAD BEEN FOUND ADMISSIBLE UNDER RULE-46A. THAT OBSERVED, I FIND NO REASON NOT TO ADMIT OR ADJUDICATE ON THE HOME LOAN MATTERS WHICH ARE PALPABLY SUPPORTED BY DOCUMENTS AND ARE ENTIRELY GENUINE. THESE HAVE ALSO NOT BEEN FOUND EITHER INCORRECT OR INELIGIBLE FOR ADMISSION BY THE LD. AO. ITA NO.2130/KOL/2017 (ASSESSMENT YEAR-2013-14) PAGE | 3 5. IN THE EMERGENT CIRCUMSTANCES, I AM UNABLE TO AGREE WITH THE ACTION OF THE LD. AO IN ASSESSING THE TOTAL INCOME OF THE APPELLANT AT RS.10,153,270/- AGAINST THE RETURNED INCOME OF NIL, AND SUCH ACTION BEING UNJUSTIFIED IN THE FACTS OF THE CASE, AND THE LAW APPLICABLE STANDS DELETED. THE GROUNDS ARE ACCORDINGLY ALLOWED IN FAVOUR OF THE ASSESSEE-INDIVIDUAL. 4. IN VIEW OF ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND IT IS JUSTIFIED. THUS, GROUNDS AS DISCUSSED ABOVE RAISED BY THE REVENUE RELATING TO THIS ISSUE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.04.2019. SD/- SD/- (P.M.JAGTAP) (S.S.VISWANETHRA RAVI) VICE PRESIDENT JUDICIAL MEMBER DATE:- 23.04.2019 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT- ACIT(IT), CIRCLE-1(1), KOLKATA-700107. 2. RESPONDENT- SHRI DEBASHIS PAL CHAUDHURI, 193/2, BANERJEE PARA ROAD, PASCHIM PUTIARY, KOLKATA-700041. 3. CIT-KOLKATA 4. CIT(APPEALS)-KOLKATA 5. DR: ITAT -KOLKATA BENCHES BY ORDER AR/H.O.O ITAT, KOLKATA