Mr. J. Muthukumar, Chennai V. ITO, Intl. Taxation, Ward 1(2), Chennai

ITA 2203/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4790 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RU GEORGE IRS
• Assessee Lawyers: M KOUSIK GANESH
• Keywords: Services rendered outside India; Deemed to accrue or arise in india
• Section: 143(3); 90

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH : CHENNAI . , !' # $! # % . &' , ) + , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] ./I.T.A.NO.2203/CHNY/2017 / ASSESSMENT YEAR : 2010-2011. MR. J. MUTHUKUMAR, NO.3, 10 TH MAIN ROAD, VIJAYA NAGAR, VELACHERY, CHENNAI 600 042. VS. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION WARD1(2) CHENNAI 600 034. [PAN AAOPM 7354F] ( -. / APPELLANT) ( /0-. /RESPONDENT) / APPELLANT BY SHRI. M. KOUSIK GANESH, C.A. /RESPONDENT BY : SMT. RUBY GEORGE, IRS, CIT. /DATE OF HEARING : 06-02-2018 ! /DATE OF PRONOUNCEMENT : 13-02-2018 1 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ASSESSEE HAS FILED THIS APPEAL WITH A DELAY OF 2 54 DAYS. CONDONATION PETITION HAS BEEN FILED BY THE ASSESSEE . REASONS SHOWN BY THE ASSESSEE FOR THE DELAY READ AS UNDER:- 3. THE IMPUGNED ORDER OF THE CIT CA) IN ITA NO. 24/ CITCA) DATED 16.09.2016 WAS COLLECTED BY MR. KOUSIK GANESH , MY C.A. FROM THE OFFICE OF THE CITCA) IN PERSON ON 1/11/201 6 AND IT WAS SENT TO APPELLANT'S RESIDENCE IN THE ADDRESS MENTIONED ABOVE ON 3/11/2016 BY ORDINARY POST. ITA NO.2203/CHNY/2017. :- 2 -: 4. I AM A MANAGEMENT CONSULTANT IN THE UPSTREAM OIL AND GAS INDUSTRY PROVIDING SERVICES WORLDWIDE AND A MEMBER OF SOCIETY OF PETROLEUM ENGINEERS, UK. I AM STATIONED IN DUBAI AND COME TO INDIA TIME AND AGAIN. AS, I WAS OUT OF THE COUNTRY DURING THAT TIME, FROM 7 TH OCTOBER 2016 TO 23 RD NOVEMBER 2016, I WAS NOT AWARE OF THE ABOVE. 5. I HAVE ENGAGED MR. VIJAY SUBRAMANIAN AS MY DRIVE R FOR THE-PAST 5-6 YEARS. HE IS NOT AN EDUCATED PERSON. I PAY HIS SALARY AS AND WHEN I COME TO INDIA OR THROUGH ACCOU NT TRANSFER FROM OVERSEAS. 6. HE COMES EVERY DAY AND COLLECTS ALL CORRESPONDEN CES, MAILS AND COURIERS AS MY HOUSE IS UNDER LOCK AND KE Y IN OUR ABSENCE AND KEEPS THEM SAFELY UNTIL WE RETURN HOME. 7. ON AND OFF, ME OR MY WIFE USE TO CONTACT HIM ON PHONE TO CHECK ON ANY IMPORTANT MAIL OR LETTERS AND HE INFOR MS US TO THE BEST OF HIS KNOWLEDGE. 8. SINCE MY BUSINESS TRAVEL DEMANDS EXTENSIVE MOVEM ENTS ACROSS DIFFERENT AREAS OVERSEAS, SOMETIMES WITH NO MEANS OF COMMUNICATION, THE INFORMATION OF THE COLLECTS A LL THE MAILS AND COURIERS AND TO INFORM ME IF ANYTHING IMPORTANT . 9.THOUGH I HAD VISITED INDIA SUBSEQUENTLY ON VARIOU S OCCASIONS, SOME ON ACCOUNT OF PERSONAL WORK INCLUD ING TAX MATTERS, ON ACCOUNT OF FAMILY /RELATIVES/FRIENDS' FUNCTIONS, ON ACCOUNT OF MONITORING MY PROPERTIES ETC., I WAS NOT INFORMED SPECIFICALLY OF THE SUBJECT ORDER 10. ONLY ON 23 ID JUNE 2017, WHEN I WAS SORTING OUT SOME FILES AND PAPERS FOR HANDLING IT OVER TO MY AUDITO R FOR CURRENT YEAR'S TAX REQUIREMENTS, I FOUND THIS COVER FROM C HARTERED ACCOUNTANT'S OFFICE LEFT UN-ATTENDED TO, AS IT WAS MISPLACED BY OVERSIGHT AMONGST OTHER RECORDS AND THE SAME WAS IRRETRIEVABLY LOST UNTIL THEN. I WAS UNDER THE BONA FIDE IMPRESSION THAT SUITABLE ACTION HAD BEEN TAKEN ON T HIS APPELLATE ORDER. 11. IMMEDIATELY I CONTACTED MY TAX ADVISORS AS TO W HAT ACTION SHOULD BE TAKEN ON THIS AND AS ADVISED, I HA NDED OVER THE PAPERS IMMEDIATELY TO OUR TAX ADVOCATES FOR PRE PARING THE APPEAL PAPERS. THE DRAFT OF THE SAME WAS PREPAR ED BY MY COUNSEL AND SENT TO ME FOR FILLING UP CERTAIN IN FORMATION AND SENDING IT BACK TO HIM FOR FILING AT THE EARLIE ST. ITA NO.2203/CHNY/2017. :- 3 -: 12. I SUBMIT THAT THE LEGAL COUNSEL HAD PROPOSED TH E FORWARD ACTION TO APPEAL ON 24TH JUNE 17. I WAS THEN CHECKI NG WITH MY CHARTERED ACCOUNTANT THE FACTS OF THE ORDER TO P ROVIDE THE REQUIRED INFORMATION TO THE LEGAL COUNSEL. HOWEVER, IN ADDITION TO, I WAS ALSO OCCUPIED FULLY IN RESOLVING SOME OF THE ONGOING PROJECT TECHNICAL MATTERS. I HAD TO TRAVEL OUT OF INDIA ON 11 THE JULY 17 AND DID NOT RETURN TO INDIA UNTIL 2 ND SEP 17. 13. HENCE, I COULD NOT CONCLUDE THE REVIEW AND FINA LIZE THE SUBJECT APPEAL UNTIL RETURNED BACK TO INDIA ON THE 2 ND OF SEPTEMBER 17. FROM THAT DAY TO 9 TH SEPTEMBER 17, I REVIEWED AND COMPLETED THE REQUIRED INFORMATION TO FILE THE APPEAL WITH MY CHARTERED ACCOUNTANTS. 14. ON 09 TH SEP 2017, I HAVE REQUESTED MY CHARTERED ACCOUNTANT TO MAKE THE PAYMENT TOWARDS APPELLATE TR IBUNAL FEE FOR FILING THE APPEAL AND ACCORDINGLY THE SAME WAS DONE ON 09 TH SEPTEMBER 2017. THE NEXT WORKING DAY BEING 11TH SEPTEMBER 2017, THE APPEAL WAS FILED ON THAT DAY BE FORE THE INCOME TAX APPELLATE TRIBUNAL, CHENNAI. 15. I SINCERELY SUBMIT THAT THE DELAY IN FILING WAS DUE TO GENUINE REASONS AND HENCE REQUEST FOR CONDONING THE DELAY IN FILING THE APPEAL AND CONSIDERING THE CASE ON ME RIT. I AM FILING THIS BELATED APPEAL BEFORE THIS HON'BLE TRIB UNAL IN ORDER TO REITERATE THE CRUCIAL FACT WHICH IS ALREADY BROU GHT ON RECORD, NAMELY, THAT THE AMOUNT IN QUESTION IS NOT LIABLE TO TAX. 2. LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSING T HE CONDONATION PETITION SUBMITTED THAT ASSESSEE WAS UN ABLE TO EXPLAIN THE HUGE DELAY AND HAD NOT PERUSED ITS REMEDY WITH DUE DILIGENCE. 3. WE HAVE HEARD THE CONTENTIONS. ASSESSEE WAS A NON RESIDENT FOR ALL ASSESSMENT YEARS OTHER THAN THE I MPUGNED ASSESSMENT YEAR. HENCE, IN OUR OPINION, THERE IS MU CH STRENGTH IN HIS SUBMISSION THAT HE COULD NOT KEEP TRACK ON THE DEVE LOPMENTS WITH REGARD TO HIS TAX ASSESSMENTS IN INDIA. REASONS S HOWN BEING JUSTIFIED, WE CONDONE THE DELAY AND ADMIT THE APPE AL. ITA NO.2203/CHNY/2017. :- 4 -: 4. GROUNDS TAKEN BY THE ASSESSEE ARE REPRODUCED HEREUN DER:- 1) THE ORDER OF THE CIT(A) IS CONTRARY TO THE LAW, FAC TS AND CIRCUMSTANCES OF THE CASE. 2) THE CIT(A) ERRED IN CONFIRMING THE ASSESSMENT MADE UNDER SEC. 143(3) R.W.S. 147 OF THE ACT. 3) THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.72,51,990/- RELATING TO THE INCOME WHICH ACCRUED DURING THE PERIOD WHEN THE APPELLANT WAS A NON- RESIDENT BUT RECEIVED THE SAID SUM IN THE YEAR UNDE R CONSIDERATION WHEN HE WAS A RESIDENT. 4) THE CIT(A) ERRED IN HOLDING THAT THE APPELLANT IS N OT RIGHT IN CLAIMING THAT THE AMOUNT IN QUESTION IS EX EMPT FROM TAX UNDER SEC. 9(1)(VII)(B) OF THE IT ACT, 196 1. 5) THE CIT(A) SHOULD HAVE APPRECIATED THAT WHEN THE AMOUNT WAS ACCRUED OUTSIDE INDIA, THE APPELLANT WAS A NON RESIDENT. INSTEAD OF TAKING THE ACCRUAL BASIS OF OFFERING AND CLAIMING EXEMPTION OF THE INCOME EARNE D OUTSIDE INDIA, THE APPELLANT GENUINELY BELIEVED THA T ON CASH BASIS OF ACCOUNTING, WHEN THE SAID AMOUNT WAS RECEIVED, THE APPELLANT HAD CONSISTENTLY TAKEN THE STAND THAT THE AMOUNT IN QUESTION IS NOT LIABLE TO TAX. JUST BECAUSE THE APPELLANT HAD BECOME RESIDENT DURING THE IMPUGNED YEAR, THE CHARACTER OF TAXABILITY SHOULD NOT BE ALT ERED TO THE DISADVANTAGE OF THE APPELLANT, OTHER THINGS REMAINING CONSTANT. 6) THE CIT(APPEALS) ERRED IN HIS OBSERVATION IN PARA 3 OF HIS ORDER TO THE EFFECT THAT THE PROOF ADDUCED BEFO RE HIM IN THE FORM OF BANK STATEMENTS ETC, WAS NOT ACCEPTABLE AND AT THE SAME TIME HE OBSERVED THAT TH E APPELLANT WAS NOT IN A POSITION TO PRODUCE ANY PROO F TO SHOW THAT THE INCOME CLAIMED WAS EXEMPT. 7) THE APPELLANT CRAVES TO ADDUCE ADDITIONAL GROUNDS O F APPEAL AT THE TIME OF HEARING. ITA NO.2203/CHNY/2017. :- 5 -: 5. THROUGH THE ABOVE GROUNDS, ASSESSEE IS ASSAILING A DDITION OF E72,51,990/-. FACTS APROPOS ARE THAT ASSESSEE, DI RECTOR OF ONE M/S. AJAPA INTEGRATED PROJECT MANAGEMENT CONSULTANTS PRI VATE LIMITED (HEREIN AFTER REFERRED AS (M/S. AIPMCPL), HAD FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DISCLOSING INCOME OF E83,07,180/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT BY THE LD. ASSESSING OFFICER THAT AS SESSEE HAD CLAIMED A SUM OF E72,51,990/- AS EXEMPT BEING INCOME, AS E ARNED FROM SERVICES RENDERED OUTSIDE INDIA. AS PER THE LD. A SSESSING OFFICER, STATUS OF THE ASSESSEE FOR IMPUGNED ASSESSMENT YEAR WAS RESIDENT AND NOT ORDINARILY RESIDENT AND HE WAS LIABLE TO PAY TAX IN INDIA FOR THE INCOME EARNED OVERSEAS ALSO. ASSESSEE WAS QUERI ED BY THE LD. ASSESSING OFFICER ON THIS ASPECT. IN REPLY, ASSESSE E FILED A LETTER DATED 24.12.2014 FROM M/S. AIPMCPL, WHICH INTERALIA CON FIRMED THAT ASSESSEE HAD RAISED FOUR INVOICES ON 31.03.2009 FOR CONSULTANCY SERVICES RENDERED BY HIM TO THEM. LEDGER EXTRACT I N THE BOOKS OF THE SAID COMPANY WAS ALSO PRODUCED. LD. ASSESSING OFFI CER THEREUPON, ISSUED A NOTICE U/S.133(6) OF THE INCOME TAX ACT, 1 961 (IN SHORT THE ACT) TO M/S. HDFC BANK LIMITED REGARDING REMITTAN CES RECEIVED IN DOLLARS BY THE ASSESSEE. IT SEEMS LD. ASSESSING OF FICER RECEIVED INFORMATION FROM THE SAID BANK SHOWING THAT PAYMEN TS TO THE ASSESSEE BY M/S. AIPMCPL WAS IN US DOLLARS, TOWARD S SALARY AND ITA NO.2203/CHNY/2017. :- 6 -: SOFTWARE CONSULTANCY SERVICES RENDERED BY THE ASSES SEE. AS PER THE LD. ASSESSING OFFICER, ASSESSEE COULD NOT FURNISH ANY P ROOF FOR ITS CLAIM THAT PAYMENTS RECEIVED WERE FOR SERVICES RENDERED O UTSIDE INDIA. ACCORDING TO HIM, STATUS OF THE ASSESSEE WAS THAT OF A RESIDENT BUT NOT ORDINARILY RESIDENT FOR THE IMPUGNED ASSESSME NT YEAR, AND HE WAS LIABLE TO BE TAXED IN INDIA ON HIS GLOBAL INCOM E. AS PER THE LD. ASSESSING OFFICER, ASSESSEE COULD NOT PRODUCE ANY E VIDENCE TO SHOW THAT THE SUM OF E72,51,990/- WAS TAXED AS INCOME IN ANY OTHER COUNTRY. EXEMPTION CLAIMED WAS DENIED AND AN ADDIT ION MADE ACCORDINGLY. 6. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). CONTENTION O F THE ASSESSEE WAS THAT HE WAS A NON RESIDENT FOR ALL THE EARLIER YEARS EXCEPT FOR IMPUGNED ASSESSMENT YEAR AND ALSO FOR ALL SUBSEQUEN T ASSESSMENT YEARS. AS PER THE ASSESSEE, PAYMENTS RECEIVED WERE FOR SERVICES RENDERED BY HIM TO M/S. AIPMCPL ABROAD, IN THE EA RLIER YEARS, WHEN HE WAS A NON RESIDENT. ACCORDING TO HIM, SUCH INCOM E ACCRUED TO HIM OUTSIDE INDIA WHEN HE WAS A NON RESIDENT. ASSESSEE ALSO POINTED OUT THAT RECEIPTS WERE CREDITED IN A NON RESIDENT (EXT ERNAL) ACCOUNT, IN US DOLLARS. RELYING ON SECTION 9(1) (VII) B OF THE ACT, ASSESSEE ARGUED THAT SUCH INCOME COULD NOT BE DEEMED AS ACCRUING OR ARISING IN INDIA. ITA NO.2203/CHNY/2017. :- 7 -: ASSESSEE ONCE AGAIN RELIED ON THE LETTER DATED 24.0 2.2014 FROM M/S. AIPMCPL, WHICH STATED AS UNDER:- THIS IS STATE AND, CONFORM THAT THE FOLLOWING BIL LS HAVE BEEN ACCOUNTED IN THE BOOKS OF OUR COMPANY M/S AJAPPA INTEGRATED PROJECTS CONSULATANTS PVT LTD. ON ACCRUAL BASIS IN RESPECT OF MR. J MUTHUKUMAR, OUR CONSULTANT DURING THE FY 2008-09. THE PAYMENTS IN RESPECT OF THESE BILLS HAVE BEEN PAID DURING THE FY 2009-10, THE COPIES OF THE COMPANY'S LEDGER EXTRACT FOR THE INVOICES ACCRUED AND PAYMENT MADE IS ATTACHED AND DULY CERTIFIED. SL. NO INVOICE NO. INVOICE AMOUNT DEDUCT ION PAID AMOUNT INVOICE ACCRUED ON INVOICE PAID ON 1 INVOICE / NOV.08 $38,400.00 $25.00 $38,375.00 31. 03.2009 16.04.09 2 INVOICE / DEC. 08 $28,800.00 $25.00 $28,775.00 31.03.2009 05.05.09 3 INVOICE /JAN 09 $28,800.00 $25.00 $28,775.00 31.03.2009 16.06.09 4 INVOICE /FEB 09 $35,200.00 $25.00 $35,175.00 31.03.2009 21.07.09 5 INVOICE /MAR 09 $9,600.00 $25.00 $9,575.00 31.03.2009 21.07.09 7. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) W AS NOT APPRECIATIVE OF THE ABOVE CONTENTIONS OF THE ASSESS EE. LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER: - THUS FROM THE PERUSAL OF THE INFORMATION FURNISHED BY THE APPELLANT IT BECOMES CRYSTAL CLEAR THAT ASSESSE E MR J. MUTHU KUMAR IS A DIRECTOR IN A INDIAN COMPANY M/S AJAPPA INTEGRATED PROJECTS CONSULATANTS PVT LTD. WHO HAS MADE PAYMENT IN US DOLLARS FOR CONSULTANCY PROVIDED BY THE ASSESSEE. HOWEVER THE APPELLANT IS NOT ABLE TO PRODUCE ANY PROOF THAT HE HAS BEEN MADE PAYMENTS FOR RENDERING SERVICES OUTSIDE INDIA. THE APPELLANT IS ALSO NOT IN A POSITION TO PRODUCE ANY PROOF TO SHOW THAT THE INCOME CLAIMED EXEMPT HAD ALREADY BEEN TAXED ABROAD . IN ABSENCE OF SUCH PROOF THE ASSESSEE DOES NOT QUAL IFY TO CLAIM. EXEMPTION U/S 90 OR U/S 91 OF THE INCOME TAX ACT 1961. ASSESSEE HAS CONFORMED BEFORE THE AO THAT HE IS A RESIDENT DURING FY2009-1O AND FOR RESIDENT ITA NO.2203/CHNY/2017. :- 8 -: GLOBAL INCOME EARNED OUTSIDE INDIA BY THE ASSE SSEE IS ALSO TAXABLE IN INDIA. IN VIEW OF THE ABOVE I CONFI RM THE ACTION OF ASSESSING OFFICER BRINGING TO TAX THE AMO UNT OF RS.72,51,990/- AS THE SAME WOULD NOT QUALIFY AS EXE MPT INCOME UNDER THE INCOME TAX ACT 1961. THE APPELLAN T DO NOT SUCCEED IN APPEAL AND THEREFORE THE GROUND O F APPEAL ON THIS ISSUE IS DISMISSED. 8. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE STRON GLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES SUBMI TTED THAT ASSESSEE WAS A CONSULTANT IN OIL EXPLORATION AND WAS DOING WORK FOR M/S. AIPMCPL OUTSIDE INDIA. AS PER THE LD. AUTHORISED R EPRESENTATIVE, ASSESSEE WAS A NON RESIDENT ALL THROUGH EXCEPT FOR THE IMPUGNED ASSESSMENT YEAR WHEN HE WAS CONSTRAINED TO VISIT AN D STAY BACK IN INDIA FOR THE EDUCATION NEEDS OF HIS CHILDREN. AC CORDING TO HIM, ASSESSEE WAS A PERMANENT RESIDENT OF DUBAI AND THE RE WAS NO TAX ON INCOME LEVIED IN DUBAI. AS PER THE LD. AUTHORISED REPRESENTATIVE, THERE WAS NO RULE OF LAW THAT AN INCOME IF IT WAS NOT TAXED IN A COUNTRY SHOULD BE TAXED IN ANOTHER COUNTRY. FURTHE R, ACCORDING TO HIM, THE DEFINITION OF INCOME DEEMED TO ACCRUE O R ARISE IN INDIA GIVEN UNDER SECTION 9 OF THE ACT SPECIFICALLY EXCLU DED FEES PAYABLE FOR SERVICES UTILIZED FOR THE BUSINESS OR PROFESSION CA RRIED ON OUTSIDE INDIA. AS PER THE LD. AUTHORISED REPRESENTATIVE CONFIRMAT ION FROM THE M/S. AIPMCPL CLEARLY PROVED THAT INCOME HAD ACCRUED T O THE ASSESSEE PRIOR TO THE IMPUGNED ASSESSMENT YEAR. THUS, AS PE R THE LD. ITA NO.2203/CHNY/2017. :- 9 -: AUTHORISED REPRESENTATIVE, ASSESSEE COULD NOT HAVE BEEN TAXED FOR SUCH AMOUNT IN INDIA. 9. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTING THE ORDERS OF THE AUTHORITIES BELOW SUBMITTED ASS ESSEE WAS THE AUTHORIZED SIGNATORY OF M/S. AIPMCPL IN HIS CAPACIT Y AS ITS DIRECTOR. AS PER THE LD. DR, MONEY GIVEN BY M/S. AIPMCPL TO THE ASSESSEE, WAS REFLECTED IN THE ACCOUNTS OF THE SAID COMPANY AS DI RECTORS REMUNERATION. THUS, AS PER THE LD. DR, REMUNERATI ON RECEIVED BY THE ASSESSEE IN HIS POSITION AS DIRECTOR OF THE COMPAN Y WAS NOTHING BUT INCOME ACCRUING IN INDIA EARNED AND RECEIVED IN IND IA. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT DISPUTED THAT ASSESSEE WAS A NON RESIDENT ALL THROUGH, EXCEPT FOR IMPUGNED ASSE SSMENT YEAR. FOR THE IMPUGNED ASSESSMENT YEAR STATUS OF THE ASSESSEE WAS THAT OF A RESIDENT BUT NOT ORDINARY RESIDENT. REVENUE H AS NOT DISPUTED THE CLAIM OF THE ASSESSEE THAT HE WAS BASED IN DUBAI. LETTER DATED 24.12.2014 ISSUED BY M/S. AIPMCPL CLEARLY STATE THA T THE INVOICES RAISED BY THE ASSESSEE WERE FOR THE MONTHS OF NOVEM BER, 2008 TO MARCH, 2009. THE DATE OF WHICH THE AMOUNTS BECAME O UTSTANDING WAS SHOWN BY THEM AS 31.03.2009. OR IN OTHER WORDS, IT IS CLEAR THAT INVOICES RAISED BY THE ASSESSEE WERE FOR SERVICES R ENDERED PRIOR TO ITA NO.2203/CHNY/2017. :- 10 -: 31.03.2009, AND IT WAS SO ACCEPTED AND ACCOUNTED BY M/S. AIPMCPL. IT MIGHT BE TRUE THAT ASSESSEE WAS PAID BY M/S. A IPMCPL ONLY DURING THE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT Y EAR VIZ AFTER 01.04.2009. HOWEVER THE CONFIRMATION OF THE COMPAN Y CLEARLY INDICATE THAT SERVICES RENDERED BY THE ASSESSEE WERE FOR TH E PERIOD NOVEMBER, 2008 TO MARCH, 2009 OR EARLIER. 11. AT THIS JUNCTURE IT WILL BE USEFUL TO HAVE A LOOK AT SECTION 5 OF THE ACT, WHICH DEFINES THE SCOPE OF TOTAL INCOME . (1) SUBJECT TO THE PROVISIONS OF THIS ACT, THE TOTAL INCOME OF ANY PREVIOUS YEAR OF A PERSON WHO IS A RESIDENT INCLUDES ALL INCOME FROM WHATEVER SOURCE DERIVED WHICH (A) IS RECEIVED OR IS DEEMED TO BE RECEIVED IN INDIA IN SUCH YEAR BY OR ON BEHALF OF SUCH PERSON ; OR (B) ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE TO HIM IN INDIA DURING SUCH YEAR ; OR (C) ACCRUES OR ARISES TO HIM OUTSIDE INDIA DURING SUCH YEAR : PROVIDED THAT IN THE CASE OF A PERSON NOT ORDINARIL Y RESIDENT IN INDIA WITHIN THE MEANING OF SUB-SECTION (6) OF SECTION 6, THE INCOME WHICH ACCRUES OR ARISES TO HIM OUTSIDE INDIA SHALL NOT BE SO INCLUDED UNLESS IT IS DERIVED FROM A BUSINESS CONTROLLED IN OR A PROFESSI ON SET UP IN INDIA. (2) SUBJECT TO THE PROVISIONS OF THIS ACT, THE TOTA L INCOME OF ANY PREVIOUS YEAR OF A PERSON WHO IS A NO N- RESIDENT INCLUDES ALL INCOME FROM WHATEVER SOURCE DERIVED WHICH (A) IS RECEIVED OR IS DEEMED TO BE RECEIVED IN INDIA IN SUCH YEAR BY OR ON BEHALF OF SUCH PERSON ; OR ITA NO.2203/CHNY/2017. :- 11 -: (B) ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE TO HIM IN INDIA DURING SUCH YEAR . SUB SECTION (1) OF THE SECTION 5 IS CLEAR IN THAT A RESIDENT, APART FROM HIS INCOME IN INDIA, IS TAXABLE ON INCOME WHICH AC CRUES OR ARISES TO HIM OUTSIDE INDIA DURING A GIVEN YEAR. HOWEVER SUB SECTION (2) MAKES IT CLEAR THAT A NON RESIDENT IS NOT LIABLE FOR INCOME ACCRUING OR ARISING OUTSIDE INDIA. THE SUM OF E72,51,990/- RE CEIVED BY THE ASSESSEE IN US DOLLARS HAD ACCRUED TO HIM IN AN EA RLIER PREVIOUS YEAR. SERVICES WERE RENDERED BY THE ASSESSEE TO M/S. AIP MCPL DURING PREVIOUS YEAR ENDING 31.03.2009. THERE IS NO DISPU TE THAT FOR ASSESSMENT YEAR 2009-2010 ASSESSEE WAS A NON RESIDE NT. SO AT THE POINT OF TIME WHEN THE INCOME ACCRUED TO THE ASSES SEE HE WAS A NON RESIDENT. IN OUR OPINION RECEIPT IN A LATER YEAR, OF AN INCOME WHICH ACCRUED OR AROSE IN AN EARLIER YEAR, WILL NOT RENDE R SUCH AMOUNT TAXABLE IN THE YEAR OF RECEIPT. WHAT THE ASSESSEE RECEIVED DURING THE IMPUGNED ASSESSMENT YEAR WAS INCOME WHICH ALREADY A CCRUED TO HIM IN AN EARLIER YEAR, WHEN HE WAS A NON RESIDENT. AN AMOUNT CAN BE INCOME EITHER AT THE TIME OF ACCRUAL OR AT THE TIME OF RECEIPT, UNDER THE CIRCUMSTANCES MENTIONED IN SECTION 5 OF THE ACT. H OWEVER, ONCE AN ASSESSEE RECOGNIZES HIS INCOME AT THE POINT OF ACC RUAL, IT CANNOT AGAIN BE CONSIDERED AS INCOME AT THE POINT OF RECEIPT. T HAT APART, SECTION 9(1)(VII) (B) OF THE ACT CLEARLY EXCLUDES FROM TH E DEFINITION OF INCOME DEEMED TO ACCRUE OR ARISE IN INDIA, FEES PAYABLE IN RESPECT OF SERVICES ITA NO.2203/CHNY/2017. :- 12 -: UTILIZED IN A BUSINESS OF PROFESSION CARRIED ON OU TSIDE INDIA. ASSESSEES CLAIM THAT HE EARNED THE INCOME FROM SER VICES RENDERED BY HIM TO M/S.AIPMCPL WAS NEVER REBUTTED BY THE REVENU E. WE ARE THEREFORE OF THE OPINION THAT THE SUM OF E72,51,990 /- COULD NOT HAVE BEEN TAXED IN THE HANDS OF THE ASSESSEE FOR THE IM PUGNED ASSESSMENT YEAR. SUCH ADDITION STANDS DELETED. ORDERS OF THE L OWER AUTHORITIES ARE SET ASIDE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED ON TUESDAY, THE 13TH DAY OF FEBRU ARY, 2018, AT CHENNAI. SD/- SD/- ( # $! # % . &' ) ( DUVVURU RL REDDY ) ) / JUDICIAL MEMBER ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:13TH FEBRUARY, 2018. KV %& '()( / COPY TO: 1. / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF