Somenath Duttagupta, Kolkata V. ACIT, Cir-2(1), Kolkata, Kolkata

ITA 627/KOL/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3556 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-02-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 22-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIRTUE OF PROVISIONS OF SECTION
• Keywords: Residential status; Salary income; Double taxation relief; Permanent establishment; Revised return; TDS; Set aside; FORM 26AS
• Section: 6; 90; 250; 22; 20

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘सी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Įी संजय गग[, ÛयाǓयक सदèय एवं Įी मनीष बोरड, लेखा सदèय के सम¢ Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta.................................................................Appellant A 168, Lake Gardens, Shivam Building Flat A2, Kolkata – 700045. [PAN: AFQPD5412G] vs. ACIT, Circle-2(1), Kolkata................................................................ Respondent Appearances by: Shri Balaji V, AR, appeared on behalf of the appellant. Shri Raja Sengupta, Addl. CIT-Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : February 22, 2024 Date of pronouncing the order : March 01, 2024 आदेश / ORDER संजय गग[, ÛयाǓयक सदèय ɮवारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 28.04.2023 of the Commissioner of Income Tax (Appeals)- 22, Kolkata [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The assessee in this appeal is aggrieved by the action of the lower authorities in making/confirming the addition of salary income of Rs.47,26,133/- received by the assessee in India for the services rendered in US. 3. The brief facts of the case are that the assessee, an individual, filed his revised return of income for the Assessment Year under consideration i.e. A.Y 2019-20 declaring a total income of Rs.191370/-. I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 2 The case of the assessee was selected for limited scrutiny for the following reasons: 1. Salary income shown in ITR is less than the salary income as per 26AS 2. Salary income shown under Part B-TI is less than the salary income as per Annexure II of TDS return filed by the employer 3. Salary income shown under TDS schedule of ITR is higher than the salary income shown under Part B-TI 4. Taxable income shown in revised return is less than the taxable income shown in the original return and large refund has been claimed (Non-business ITR) 5. Substantial difference in total taxable income shown in Annexure II of TDS, return of employer in Form 24Q and that shown in ITR 3.1 On being asked to explain in this respect, the assessee explained that the assessee was employed with PricewaterhouseCoopers Private Limited (‘PWC’), India. During the previous year relevant to assessment year under consideration, the assessee was on an international assignment to USA. During the year, the assessee stayed and exercised his employment in USA and had been in India for 16 days only. Though the salary was received in India in his bank account, however, the same was paid to the assessee for exercising his employment in USA and was also taxed in USA. Therefore, the assessee had not shown salary income in his Income Tax Return filed in India. The aforesaid mismatch of salary income shown in ITR as compared to Form 26AS/TDS return of the employer was due to aforesaid reasons. It was submitted that since, the salary was taxed in USA, therefore, taxing the salary in India would I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 3 amount to double taxation of the same income. The Assessing Officer, however, requisitioned tax resident certificate of USA from the assessee. The assessee, however, failed to submit the same due to delay caused by the US authorities in issuing the same owing to Covid-19 pandemic. The Assessing Officer referred to the provisions of section 90(4) of the Income Tax Act, which is reproduced as under: “An assessee, not being a resident, to whom an agreement referred to in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless a certificate of his being a resident in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory.” 3.2 The Assessing Officer observed that since the assessee had failed to submit tax resident certificate of USA, hence, the claim of exemption from taxation of the salary in India cannot be allowed. He accordingly taxed the aforesaid salary income of the assessee in India. 4. Being aggrieved by the above order of the Assessing Officer, the assessee preferred appeal before the CIT(A). The assessee reiterated the above submissions and further pleaded that the assessee was qualified to be a non-resident of India and tax resident of US. The pay role of the assessee was in India and salary for the services rendered in US was paid in his Indian bank account and further applicable taxes on such salary was deducted and deposited in the Income Tax Department and were reflected in Form No.26AS issued by his Indian employer i.e. PricewaterhouseCoopers Private Limited for the concerned assessment year. However, the assessee for the year under consideration was qualified as a resident of US and his salary was taxed in the US and therefore, he was entitled to claim exemption under Article 16 of the Indo-US Double Taxation Avoidance Agreement (‘DTAA’) and accordingly was entitled to claim exemption from taxation of the salary I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 4 received in India on account of services rendered in US for the relevant period. It was also submitted that the copy of the tax resident certificate as demanded by the Assessing Officer was also filed on 02.11.2021, however, the same was not considered by the Assessing Officer while passing the final assessment order and exemption under Article 16 of the Indo-US DTAA was wrongly denied. 4.1 In respect of the above submissions of the assessee, the ld. CIT(A) called for remand report from the Assessing Officer. 4.2 In the remand report, the Assessing Officer reported that though the assessee has claimed that he had stayed in India only for 16 days, however, the assessee had not submitted the documents in support of the stay in India for last four years, due to which, residential status of the assessee in India could not be established as per the provisions of section 6(1)(c) of the Income Tax Act. He, therefore, reported that in the absence of documents clarifying the stay of the assessee in India in last four years, the correct residential status of the assessee cannot be determined as per the provisions of section 6 of the Income Tax Act. He further reported that if the assessee is found to be US resident as well as simultaneously the resident of India, then for the purpose of Indo-US DTAA, his residential status would be determined by para 2 of Article 4 of Indo-US DTAA. He further reported that since the documents submitted by the assessee were not sufficient enough to determine the residential status of the assessee as per section 6 of the Income Tax Act, and as per para 2 of Article 4 of Indo-US DTAA, hence, the benefit of Article 16 of the DTAA cannot be given to the assessee. 4.3 In rejoinder to the report of the Assessing Officer, the assessee submitted that the assessee has already submitted the tax resident certificate of the US which has been accepted by the Assessing Officer. I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 5 Further that the assessee during the year stayed in India only for 16 days which has not been denied by the Assessing Officer. That the copy of passport was also submitted in this respect. The assessee further referring to the provisions of section 6(1)(c) of the Income Tax Act, submitted that as per the said provisions if the assessee’s total stay in the relevant financial year is less than 60 days then the assessee becomes non-resident in that financial year. That, in such case, the requirement of stay of not more than 365 days in four years would not arise. However, without prejudice to the same, the assessee furnished the copy of passport of the assessee for last 10 years. 5. The ld. CIT(A) after considering the above submissions of the assessee culled out the facts relating to the employment of the assessee as under: “1. The appellant was an employee of PricewaterhouseCoopers in India and that throughout the impugned period remain the employee of the PricewaterhouseCoopers in India. 2. That he was sent on a short tenure of the impugned period outside India, by his employer in India. 3. That there was a principal to principal interaction between the parties for whom work was being performed in US and the employer in India. The appellant was nowhere in the picture in such an interaction/ agreement/ contract. He was merely executing a work on behalf of PWC in India as an employee. Nowhere was there work done or payment received between the US parties the appellant on a principal to principal basis. 4. That the emoluments or income that accrued/arose to the appellant therefore did not do so in the US, but accrued/ arose by virtue of his employment in India. 5. Therefore, while it may be argued that the income of the employer accrued/ arose by virtue of its work undertaken in US (even though this would also be taxed in India), in the case of the appellant the kernel of the work that he performed or the income that accrued/ arose to him remained firmly embedded in his employment in India whether I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 6 this was in the form of regular salary/emoluments, or foreign stay allowances or any other bonuses/options etc.” 5.1 The ld. CIT(A) further observed that from the evidences produced by the assessee, it was undisputed that because of assessee’s limited stay in India, the assessee qualified for the status of a non-resident. He, however, observed that since the assessee had earned salary income from PWC, India and further the PWC, India had claimed deduction of expenditure in respect of remuneration paid to the assessee while computing profit chargeable to tax in India. That the income of the assessee, thus, was chargeable to tax in India. That the payments that were made to the assessee by his employer for his upkeeping in US, were also controlled by his Indian employer and were not separable from his employment in India. Even if certain payments that were paid to him outside India had their nucleus of employment of the assessee in India. He further observed from the employment contract of the assessee with PWC-India that during the foreign assignment of the assessee, his funding company was PWC-India, that even the profit and gains from the project would be those of PWC-India. He observed from the employment contract that the assessee’s entire control was at all times with his Indian Employer, with salary/other emoluments also been paid in India in the assessee’s bank account in India and it would continue to be governed by Indian conditions and laws. The ld. CIT(A) further referred to Article 16 of Indo-US DTAA and observed that even otherwise, the assessee did not quality from exemption of tax in India even though he is treated as a non-resident as the assessee does not satisfy the conditions laid down in clause (b) of para 2 of Article 16 of the DTAA. He, therefore, dismissed the appeal of the assessee. I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 7 6. We have considered the rival submissions and gone through the record. Before proceeding further, it would be relevant here to reproduce the relevant provisions of section 6(1) of the Income Tax Act: Residence in India. 6. For the purpose of this Act,- (1) An individual is aid to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or (b) [***] (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty- five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.” 6.1 A perusal of the above relevant provisions of section 6(1) of the Act would reveal that an individual would be treated as a resident in India if (a) he has been in India in that year for a period or periods amounting in all to 182 days or more; or (b) he has been in India for a cumulative period of 365 days or more within four years preceding that year and further for a total period amounting in all to 60 days or more in that relevant year. 6.2 Here, the claim of the assessee is that his stay in India was only for 16 days in that relevant year, therefore, he was not only covered under clause (a) but also under clause (c). As observed above, the stay in India of less than 60 days has to be coupled with total cumulative stay of less than 165 days in preceding four years to that relevant year. However, the assessee is silent about the first part of the clause (c) which provides that the assessee for the purpose of the Act would be a resident in India if his total cumulative stay in four years preceding the I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 8 year under consideration is 365 days or more. The aforesaid provisions of the Act are to be read and interpreted to check the status of residents of assessee in India and not for the purpose of checking the non- resident status of the assessee. If any of the conditions as mentioned in clause (a) or clause (c) to section 16(1) is attracted then the assessee would be treated as a resident of India. The ld. Counsel for the assessee has not made any submissions relating to the status of the assessee of cumulative stay of less than 365 days in four years preceding the year in question. Therefore, the assessee by virtue of provisions of section 6(1) of the Act has failed to establish his status of non-resident. 6.3 Now, at this stage, it would be relevant to refer to the following provisions of section 90 of the Income Tax Act: “DOUBLE TAXATION RELIEF [Agreement with foreign countries or specified territories. 90. (1) The Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India,— (a) for the granting of relief in respect of— (i) income on which have been paid both income-tax under this Act and income-tax in that country or specified territory, as the case may be, or (ii) income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment, or (b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be, or (c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country or specified territory, as the case may be, or investigation of cases of such evasion or avoidance, or (d) for recovery of income-tax under this Act and under the corresponding law in force in that country or specified territory, as the case may be, and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement. I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 9 (2) Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.........” 6.4 A perusal of the above reproduced provisions of section 90 of the Act would reveal that the Central Government may enter into an agreement (DTAA) with Government of any country outside India for grant of relief in respect of income tax chargeable under the Act and under the corresponding law in force in that other country. Sub-Section (2) to section 90 provides that where the Central Government has entered into an agreement (DTAA) with the Government of any other country, then in relation to the assessee to whom such agreement applies, the provisions of the Act shall apply to the extent they are more beneficial to the assessee. So, as per the provisions of section 90 of the Act, the assessee have an option to choose either the DTAA or the provisions of the Income Tax, whichever, is beneficial to him for the purpose of taxation of his income. 6.5 At this stage, it would be relevant to reproduce here Article 4 of the Indo-US DTAA as under: ARTICLE 4 RESIDENCE 1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, citizenship, place of management, place of incorporation, or any other criterion of a similar nature, provided, however, that (a) this term does not include any person who is liable to tax in that State in respect only of income from sources in that State; and (b) in the case of income derived or paid by a partnership, estate, or trust, this term applies only to the extent that the income derived by such I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 10 partnership, estate, or trust is subject to tax in that State as the income of a resident, either in its hands or in the hands of its partners or beneficiaries. (2) Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his status shall be determined as follows : (a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests) ; (b) if the State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode ; (c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; (d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3. Where, by reason of paragraph 1, a company is a resident of both Contracting States, such company shall be considered to be outside the scope of this Convention except for purposes of paragraph 2 of Article 10 (Dividends), Article 26 (Non-Discrimination), Article 27 (Mutual Agreement Procedure), Article 28 (Exchange of Information and Administrative Assistance) and Article 30 (Entry into Force). 4. Where, by reason of the provisions of paragraph 1, a person other than an individual or a company is a resident of both Contracting States, the competent authorities of the Contracting States shall settle the question by mutual agreement and determine the mode of application of the Convention to such person. 6.6 A perusal of the above provisions of Article 4 of the Indo-US DTAA which defines ‘residence’ would show that a resident of contracting state means any person who under the laws of that State is liable to be taxed therein. In case of individual who is a tax resident of both the contracting States as, in the case of the assessee, he shall be deemed to be a resident of the State in which he has a permanent home available to him and further if he has a permanent home available to him in both I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 11 the States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests). Then clause 2(b) states that if the centre of vital interest cannot be determined or if the individual does not have a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has a habitual abode. In case of habitual abode in both the States or neither of them, he will be deemed to be resident of the State of which he is a national. 6.7 Now, in the case in hand, the assessee admittedly had filed Income Tax Return in US as well as in India. The assessee in his revised Income Tax Return has also declared an income of Rs.191370/- in India. The assessee also filed on record, the copies of the Income Tax Returns for the year 2018 and for the year 2019 in US. Therefore, the assessee is a tax resident of both the States. Now, to see that the assessee is a resident of which State, the permanent home status of the assessee is to be seen. The assessee has not furnished any specific evidence in this respect. However, a perusal of the Income Tax Returns of the assessee filed in US would reveal that for the year 2018, the assessee has mentioned his address in the Income Tax Return as under: Somnath Duttagupta, 10 General Warren Blvd, Residence Inn, Room 138, Philad Malvern, PA 19355-1226 When we fill this address in Internet Google Search Engine, this is found to be the address of a hotel namely Residence Inn Philadelphia Great Valley, 10, General Warren Boulevard Malvern, PA 19355. The assessee was residing in room no.138 in the said hotel as mentioned in his return of income for the year 2018. Further, in the Income Tax Return filed by the assessee in US for the I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 12 year 2019, the address of the assessee has been mentioned as Somnath Dutta Gupta, B 235, Lake Gardens, Kolkata – 700045, India. Further, in the assessment order passed by ACIT, Circle-2(1), Kolkata, the address of the assessee has been mentioned as Somnath Duttagupta, 1/28/B, Prince Golammohmmod Road, Kolkata, Kolkata 700026, West Bengal, India. The above facts show that the assessee during the year did not have a permanent home in US, whereas, he had a permanent home in Kolkata. Moreover, the assessee is in permanent employment of the Indian Company and bank account of the assessee is also in India, wherein, the salary of the assessee is deposited. The address of the wife of the assessee namely Shreyaa Dutta Gupta mentioned in the Income Tax Return filed in USA for the year 2019 is also in India. Further, the assessee in the schedule attached to the return filed in USA for the year 2018 in reply to column relating to the Residency Information has mentioned as under: “During 2018: 7. I owned a home/property in CA (enter Y for Yes, N for No)......................N” Therefore, under the circumstances, even as per the Article 4 of DTAA, the assessee would be treated as a resident of India. 6.8 Now, coming to the Article 16 of the Indo-US DTAA which reads as under: “ARTICLE 16 - Dependent personal services – 1. Subject to the provisions of Articles 17 (Directors’ Fees), 18 (Income Earned by Entertainers and Athletes), 19 (Remuneration and Pensions in respect of Government Service), 20 (Private Pensions, Annuities, Alimony and Child Support), 21 (Payments received by Students and Apprentices) and 22 (Payments received by Professors, Teachers and Research Scholars), salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 13 exercised, such remuneration as is derived therefrom may be taxed in that other State. 2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State, if : (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant taxable year ; (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State ; and (c) the remuneration is not borne by a permanent establishment or a fixed base or a trade or business which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operating in international traffic by an enterprise of a Contracting State may be taxed in that State.” 6.9 A perusal of the above Article 16 would reveal that at the first instance, the salaries and wages and other similar remuneration derived by a resident of a contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in other contracting State. If the employment is so exercised in other State then the remuneration will be taxed in that other State. As discussed above, the assessee, under the circumstances, though for the year under consideration has stayed only for 16 days in India but in view of the provisions of section 6 of the Income Tax Act read with Article 4 of the Indo-US DTAA, in our view, the assessee is to be treated as a resident of India for the year under consideration. As per paragraph 1 of Article 16 of the Indo-US DTAA, since the assessee has exercised his employment in US i.e. “The Other Contracting State”, therefore, at the first instance, the assessee’s remuneration derived from such employment is liable to be taxed in US. It is pertinent to mention here that as per Article 16 of the Indo-US DTAA, what is relevant is the “exercise of employment in the other contracting State”. I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 14 It is not relevant whether the salary or remuneration has been paid to the assessee in the resident State or in ‘the other contracting State’. However, what has been written in paragraph 1 that is subject to the conditions laid down in paragraph 2 of Article 16. 6.10 The ld. CIT(A) in this respect has held that though, the assessee during the year resided in USA, however, he had exercised his employment only and continuously in India as his conditions and services were controlled by the Indian company and that he was paid salary by the Indian company. Without prejudice to the above discussion, the ld. CIT(A) observed that even if it is argued that the employment has actually been exercised in USA even then the conditions mentioned in Article 16(2) of the Indo-US DTAA are hit as the remuneration is paid by the employer who is always a resident of the other State i.e. India. He, therefore, held that the assessee’s salary was taxable in India. 6.11 In our view, the ld. CIT(A) perhaps has misconstrued the provisions of Article 16 of the Indo-US DTAA. The ld. CIT(A) having treated the assessee to be a resident of US and employment since was exercised in US, therefore, there was no question of attraction of paragraph 2 of Article 16 of the Indo-US DTAA. Paragraph 2 of Article 16 of the Indo-US DTAA is attracted only in a case where the remuneration is derived by a resident of a contracting State in respect of employment exercised in ‘the other contracting State’. Though, the ld. CIT(A) has held that the employment was exercised in India, however, we do not agree with the above observation of the ld. CIT(A) as the employment though controlled or on behalf of the Indian employer was exercised by the assessee only in USA and not in India during the year. Therefore, paragraph 2 of the Indo-US DTAA would not be applicable in I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 15 the case of the assessee. Even if the view of the ld. CIT(A) is to be taken as correct. However, since we have held contrary to the view of the ld. CIT(A) and held the assessee to be a resident of India (contracting State) during the year but the employment has been exercised in US (the other contracting State), therefore, the assessee is not hit by clause (a) as the assessee has stayed more than 183 days in US. However, as per clause (b) and (c), the salary income of the assessee will be liable to be taxed in India as the remuneration was paid or on behalf of an employer who was not a resident of the other State i.e. US. 6.12 Now, the moot point before us is as to whether the Clause (a), (b) & (c) to Article 16(2) of the Indo-US DTAA are to be read together and that all of the three clauses have to be simultaneously applied to see as to whether the salary income of a resident is liable to be taxed in the state of which the assessee is the ordinary resident or in the other contracting state where he has exercised his employment. A perusal of the provisions of Article 16(2) reveals that Clause (a), (b) & (c) have been written together in conjunction to each other. These clauses are not separated with the word “or”, hence there is no impression given that they can be applied severally, independent of each other or to say either of these clauses can be applied. Even, Clause (b) & (c) have been conjuncted with the word “and”. Though, the word “and” has not been mentioned between Clause (a) and (b), however, that does not make a difference until and unless Clause (a) is not separated from Clause (b) with the word “or”. Therefore, these clauses have to be read together. Therefore, the reasonable interpretation would be that all of the conditions mentioned in Clause (a), (b) & (c) are to be satisfied simultaneously to attract the provisions of Article 16(2) of the Indo-US DTAA. In the case in hand, though provisions of Clause (a) are not attracted, however, the provisions of Clause (b) & (c) are applicable to I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 16 the case of the assessee for the purpose of deciding the State of taxation of assessee’s income. When we read Article 16 of the DTAA as a whole, the reasonable interpretation which would come that the salary and other similar remuneration derived by resident of a contracting state in respect of an employment exercised in the other contracting state is liable to be taxed in that other state. However, if such resident has not stayed more than 183 days in that other state and the remuneration has not been paid by resident of that other state and even the remuneration is not borne by a permanent establishment or fixed base or a trade or business which the employer has in that other state, then the remuneration of the resident is liable for taxation in the state of which he is a resident. As observed in this case, the assessee is a resident of India, however, he has exercised employment and received remuneration in United States, therefore, at the first instance, as per the provisions of Article 16(1) of the Indo-US DTAA, such salary/remuneration of the assessee is liable to tax in the United States only. The exception clause as mentioned in Article 16(2) of the DTAA is not applicable in toto to the case of the assessee. The condition mentioned in clause (a) of Article 16(2) is satisfied but the conditions of Clause (b) and (c) to Article 16(2) of the DTAA have not been satisfied in this case. Since, we have held that the conditions mentioned in Clause (a), (b) & (c) to Article 16(2) of the Indo-US DTAA have to be applicable together or to say simultaneously and since all the conditions mentioned in Article 16(2) of the DTAA are not attracted in the case of the assessee, therefore, the provisions of Article 16(1) of DTAA will be applicable and accordingly it is held that the income of the assessee is taxable in USA and not in India. 6.13 Our above view is fortified by the decision of the Coordinate Bench of the Tribunal in the case of Rajat Dhara vs. DCIT in ITA I.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta 17 No.1914/Kol/2019 dated 19.02.2024 (the Judicial Member herein being the author of the said order also). In view of this, the impugned order of the CIT(A) on this issue is not sustainable and the same is accordingly set aside. The additions made by the Assessing Officer on this issue are accordingly ordered to be deleted. 7. In the result, the appeal of the assessee stands allowed. Kolkata, the 1 st March, 2024. Sd/- Sd/- [डॉÈटर मनीष बोरड /Dr. Manish Borad] [संजय गग[ /Sanjay Garg] लेखा सदèय /Accountant Member ÛयाǓयक सदèय /Judicial Member Dated: 01.03.2024. RS Copy of the order forwarded to: 1. Somnath Duttagupta 2. ACIT, Circle-2(1), Kolkata 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches