ADIT, New Delhi V. Shri Nandan Singh Chauhan, Gurgaon

ITA 2186/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3645 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 30-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWANI MAHAJAN
• Assessee Lawyers: SANJAY VOHRA
• Keywords: Salary income; Services rendered outside India

Judgement Text

ITA NO. 2186/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2186/DEL/2011 A.Y. : 2006-07 ADIT, INTL. TAXATION, CIRCLE 1(1), NEW DELHI, DRUM SHAPE BUILDING, IP ESTATE, NEW DELHI - 110002 VS. SH. NANDAN SINGH CHAUHAN, M-102, AMBIENCE ISLAND, NH-8, GURGAON, HARYANA (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. SANJAY VOHRA, CA DEPARTMENT BY : SH. ASHWANI MAHAJAN, C.I.T.( D.R.) ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 20.1.2 011 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN DELETING THE ADDITION BY HOLDIN G THAT THE SALARY INCOME OF THE ASSESSEE WAS NOT TAXABLE IN INDIA. 3. IN THIS CASE THE ASSESSEE MR. NANDAN SINGH CHAUH AN FILED HIS RETURN OF INCOME FOR THE A.Y. 2006-07 DECLARING NIL INCOME ON 18.12.2006. THE ASSESSEE DERIVED INCOME FROM SALAR Y ON ACCOUNT OF EMPLOYMENT IN THE SHIPPING LINE WITH AH COMPANY CALL ED M/S TEEKAY SHIPPING LTD. THE SALARY INCOME IS RECEIVED BY TH E ASSESSEE BY DIRECT CREDIT IN HIS NOMINATED BANK ACCOUNT MAINTAINED WIT H HSBC BANK, ITA NO. 2186/DEL/2011 2 BARAKHAMBA ROAD, NEW DELHI. THIS SALARY INCOME WAS CLAIMED NON- TAXABLE ON THE GROUND THE ASSESSEE RECEIVED HIS I NCOME OUTSIDE INDIA AND AS PER THE AGREEMENT BETWEEN HIM AND THE EMPLO YER THE SALARY WAS TO BE CREDITED TO HIS FCNR ACCOUNT. THE BANK IN THIS ACCOUNT ACTED AS AN AGENT OF THE ASSESSEE FOR TRANSFER OF M ONEY TO THE ACCOUNT UNDER SPECIFIC INSTRUCTIONS FROM THE ASSESSEE. IN THE ASSESSMENT ORDER PASSED IN THIS CASE, THE ASSESSING OFFICER H AS HELD THIS INCOME TO BE TAXABLE IN INDIA IN TERMS OF SECTION 5(2)(A) O F THE ACT ON THE GROUND THAT THE SALARY INCOME IS RECEIVED OR IS DEEMED TO RECEIVE IN INDIA IN SUCH YEAR BY OR ON BEHALF OF SUCH PERSONS. 3.1 THE ASSESSING OFFICER ALSO RELIED ON THE ASSE SSMENT ORDER IN THE ASSESSEES OWN CASE FOR A.Y. 2005-06 WHEREIN ON SIMI LAR FACTS AND ARGUMENTS THE SALARY INCOME OF THE ASSESSEE WAS HE LD AS TAXABLE. ALTERNATIVELY, THE ASSESSING OFFICER ALSO HELD THE SALARY INCOME TO BE TAXABLE IN INDIA IN TERMS OF SECTION 5(2)(B) OF TH E ACT ON THE GROUND THAT THE ASSESSEE WAS EMPLOYED UNDER THE SUPERVISION AND CONTROL OF AN INDIAN COMPANY AND, THEREFORE, THE SALARY INCOME ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE TO HIM IN IND IA DURING SUCH YEAR. THE BASIS ON WHICH THE ASSESSING OFFICER HELD SECTION 5(2)(B) OF THE ACT APPLICABLE IN THE ASSESSEES CASE IS THA T AS PER APPENDIX D OF THE EMPLOYMENT AGREEMENT WITH M/S TEEKAY SHIPPING IN DIA PVT. LTD. AN INDIAN COMPANY HAD APPOINTED THE ASSESSEE FOR EMPL OYMENT TO VESSEL, TOUR OF DUTY, PORT E.T.A ETC. ITA NO. 2186/DEL/2011 3 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) REFERRED TO HIS OWN ORDER FOR THE PRECEDI NG ASSESSMENT YEAR AS WELL AS THE DECISION OF THE TRIBUNAL CONFIRMING T HE SAME AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. LD. COUNSEL OF THE ASSESSEE CONTENDED THAT THE ISSU E IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNALS DECISION IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YE AR. 6.1 LD. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY CHANGE IN THE FACTS OF THE CASE. 6.2 WE FIND THAT THE TRIBUNAL IN THE PRECEDING ASSE SSMENT YEAR IN ITA NO. 1170/DEL/2009 FOR A.Y. 2005-06 HAS CONSIDERED T HE SAME ISSUE AND HELD AS UNDER:- WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PE RUSED THE RECORDS. WE FIND THAT IT IS UNDISPUTED THAT ASSESSE E IS AN NRI AND HE HAD RECEIVED INCOME FROM FOREIGN COMPANY FOR T HE SERVICES RENDERED OUTSIDE INDIA. JUST MERELY BECAU SE HE HAS INSTRUCTED THE SALARY TO BE TRANSFERRED TO HIS FCNR ACCOUNT MAINTAINED WITH THE HSBC ACCOUNT, BARAKHAMBA ROAD, CONNAUGHT PLACE, NEW DELHI CAN NOT BRING THE AMOUNT TO TAXATION UNDER THE INCOME TAX ACT. THIS VIEW IS CLE ARLY SUPPORTED BY THE TRIBUNALS DECISION AS ABOVE. HENC E, RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOVE, WE U PHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) AND ITA NO. 2186/DEL/2011 4 DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAI NST THE REVENUE. 7. RESPECTFULLY FOLLOWING THE PRECEDENT, AS ABOVE, WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/6/2011 UPO N CONCLUSION OF HEARING. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [ [[ [C.L. SETHI C.L. SETHI C.L. SETHI C.L. SETHI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL ME JUDICIAL ME JUDICIAL ME JUDICIAL MEMBER MBER MBER MBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 30/6/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES