DCIT, CIR-2(1), Kolkata, Kolkata V. Shri Subhankar Sen, Kolkata

ITA 656/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4563 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 05-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Residential status; Services rendered outside India
• Section: 143(3); 5(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 656/KOL/201 7 ASSESSMENT YEAR : 2013-1 4 DCIT(IT),CIRCLE-2(1), KOLKATA -VS- SHRI SU BHANKAR SEN [PAN: AMBPS 0306 E ] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SALLONG YADEN , ADDL. CIT, SR. DR FOR THE RESPONDENT : SHRI NAVIN JAIN, FCA SHRI P. ANAND, ADVOCATE DATE OF HEARING : 12.07.2018 DATE OF PRONOUNCEMENT : 01.08.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE OR DER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-22, KOLKATA [IN SHORT THE LD CI T(A)] IN APPEAL NO. 18/CIT(A)- 22/KOL/13-14/16-17 DATED 18.01.2017 AGAINST THE OR DER PASSED BY THE DCIT(IT), CIRCLE-2(1), KOLKATA [ IN SHORT THE LD AO] UNDER S ECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 28.03.2016 FOR TH E ASSESSMENT YEAR 2013-14. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION MADE IN THE SUM OF RS 1,24 ,65,174/- WHICH WAS BROUGHT TO TAX 2 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 2 BY THE LD AO BY APPLYING THE PROVISIONS OF SECTION 5(2) OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SEE WAS AN EMPLOYEE IN IBM INDIA PRIVATE LIMITED AND DURING THE FINANCIAL YEAR 2012- 13 WAS SENT ON SHORT TERM ASSIGNMENT TO NIGERIA. HE HAD STATIONED IN NIGERIA FOR 311 DAYS DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, HIS RESIDENTIAL STATUS FOR THE YEAR UNDER CONSIDERATION WOULD BE NON-RESIDENT. DURING THE YEAR UNDER CONS IDERATION, THE ASSESSEE HAD RECEIVED THE FOLLOWING EMOLUMENTS FROM IBM :- A) GROSS SALARY RECEIVED IN INDIA RS 32,82,438/- AND B) FOREIGN ALLOWANCES ON ACCOUNT OF THE INTERNATION AL ASSIGNMENT RECEIVED IN NIGERIA RS 1,24,65,174/- IBM HAD EFFECTED TDS OF RS 46,59,579/- ON THE ENTIR E EMOLUMENTS PAID TO THE ASSESSEE INCLUDING THE FOREIGN ALLOWANCES PAID TO THE ASSESS EE U/S 192(1) OF THE ACT. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASST YE AR 2013-14 DECLARING TAXABLE INCOME OF RS 32,86,990/- (BEING THE SALARY RECEIVED IN IND IA ALONE AND INTEREST INCOME) AFTER CLAIMING DEDUCTION OF RS 1,11,405/- UNDER CHAPTER V IA OF THE ACT AND CLAIMED A REFUND OF RS 38,19,000/- IN HIS RETURN OF INCOME. 3.1. DURING THE FINANCIAL YEAR 2012-13, THE ASSESSE E HAD RECEIVED RS 1,24,65,174/- OUTSIDE INDIA FOR SERVICES RENDERED OUTSIDE INDIA . THE ASSESSEE PLEADED THAT THE ENTIRE FOREIGN ALLOWANCE OF RS 1,24,65,174/- WAS NOT OFFER ED TO TAX IN INDIA AS THE SAME WAS RECEIVED BY THE ASSESSEE OUTSIDE INDIA FOR THE SERV ICES RENDERED OUTSIDE INDIA WHICH DOES NOT FORM PART OF THE TOTAL INCOME U/S 5(2) OF THE ACT. THE ASSESSEE HOWEVER OFFERED THE ENTIRE SALARY RECEIVED IN INDIA OF RS 3 2,82,438/- TO TAX IN INDIA. 3 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE ISSUE UNDER DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE ON THE SIMILAR SE T OF FACTS EXCEPT WITH CHANGE IN COUNTRY AND IN FIGURES IN THE CASE OF DCIT VS SUDIP TA MAITY IN ITA NO. 428/KOL/2017 DATED11.7.2018 WHEREIN THE FACTS AND THE DECISION R ENDERED THEREON ARE AS UNDER:- 4.1. DURING THE FINANCIAL YEAR 2012-13, THE ASSESSE E HAD RECEIVED RS 51,84,489/- OUTSIDE INDIA FOR SERVICES RENDERED OUTSIDE INDIA . THE ASSESSEE PLEADED THAT THE ENTIRE FOREIGN ALLOWANCE OF RS 51,84,489/- WAS NOT OFFERED TO TAX IN INDIA AS THE SAME WAS RECEIVED BY THE ASSESSEE OUTSIDE INDIA FOR THE SERV ICES RENDERED OUTSIDE INDIA WHICH DOES NOT FORM PART OF THE TOTAL INCOME U/S 5(2) OF THE ACT. THE ASSESSEE HOWEVER OFFERED THE ENTIRE SALARY RECEIVED IN INDIA OF RS 6,77,128/ - TO TAX IN INDIA. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED A LE TTER DATED 24.9.2015 WITH REGARD TO EXEMPTION CLAIMED BY HIM TOWARDS FOREIGN ASSIGNMENT ALLOWANCE, WHICH WAS PAID BY CREDITING THE ASSESSEES TRAVEL CURRENCY CARD (TCC) . THE ASSESSEE ALSO FURNISHED A CERTIFICATE FROM IBM INDIA PRIVATE LIMITED STATING THAT THE ASSESSEE HAD RECEIVED RS 51,84,489/- OUTSIDE INDIA FOR RENDERING SERVICES IN SWITZERLAND. IN THE SAID CERTIFICATE, IT WAS ALSO MENTIONED BY IBM THAT TAXES TO THE TUNE OF RS 16,04,063/- WAS DEDUCTED AT SOURCE INCLUDING ON THE PORTION OF FOREIGN ASSIGNME NT ALLOWANCE BECAUSE THE RESIDENTIAL STATUS AS WELL AS THE TAX RESIDENCY OF THE ASSESSEE WAS NOT KNOWN. 4.2. THE ASSESSEE VIDE LETTER DATED 21.12.2015 ELAB ORATED THE MODALITY OF PAYMENT OF FOREIGN ASSIGNMENT ALLOWANCE BY IBM AS UNDER:- .. WE WOULD SUBMIT BEFORE YOUR GOODSELF THAT TH E FOREIGN ASSIGNMENT ALLOWANCE WAS PAID BY IMB INDIA PRIVATE LIMITED, EMPLOYER OF THE CAPTIONED ASSESSEE, TO THE INTERNATIONAL TRAVEL CARD OUTSIDE INDIA (COPY OF TR AVEL CARD STATEMENT ENCLOSED AS ANNEXURE 3). THE SAID CARD IS DENOMINATED IN FOREIG N CURRENCY ONLY AND CAN BE USED ONLY OUTSIDE INDIA. ONCE AN EMPLOYEE IS SENT ON FOR EIGN ASSIGNMENT, A TRAVEL CURRENCY CARD IS ISSUED TO THE EMPLOYEE BY AXIS BANK LIMITED . UPON INSTRUCTIONS FROM IBM, AXIS BANK PAYS THE AMOU NT OF FOREIGN ASSIGNMENT ALLOWANCE TO THE INTERNATIONAL TRAVEL CARD OF THE E MPLOYEE OUTSIDE INDIA THROUGH ITS NOSTRO ACCOUNT SITUATED OUTSIDE INDIA. A NOSTRO AC COUNT IS A BANK ACCOUNT HELD IN A FOREIGN COUNTRY BY A DOMESTIC BANK, DENOMINATED IN THE CURRENCY OF THAT COUNTRY. NOSTRO ACCOUNTS ARE USED TO FACILITATE SETTLEMENT O F FOREIGN EXCHANGE AND TRADE TRANSACTIONS. A NOSTRO ACCOUNT IS ALWAYS MAINTAINED OUTSIDE INDIA AND DENOMINATED IN FOREIGN CURRENCY. IN VIEW OF THE SAME, SINCE THE FOREIGN ASSIGNMENT A LLOWANCES ARE PAID FROM NOSTRO ACCOUNT SITUATED OUTSIDE INDIA TO THE INTERNATIONAL TRAVEL CARD OUTSIDE INDIA, THE SAME IS NOT TAXABLE UNDER SECTION 5(2) OF THE ACT IN CAS E OF NON-RESIDENTS. IN THIS REGARD, WE HAVE ALSO ENCLOSED A LETTER ISSUED BY AXIS BANK CON FIRMING THAT THE AMOUNT IS CREDITED TO THE INTERNATIONAL TRAVEL CARD OF THE EMPLOYEES O UTSIDE INDIA THROUGH THE NOSTRO ACCOUNT MAINTAINED OUTSIDE AS ANNEXURE 4 . 4 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 4 THE ASSESSEE FURNISHED A LETTER ISSUED BY AXIS BANK , BANGALORE, ADDRESSED TO IBM, WHEREIN THE DETAILS OF ITS NOSTRO ACCOUNT, VIZ SWIF T CODE, ACCOUNT NUMBER, NAMES OF THE INTERMEDIARY BANK AND THE DENOMINATED CURRENCY WERE LISTED OUT. THE SAID LETTER ALSO CONFIRMED THAT THE ALLOWANCE PAID TO EMPLOYEES OF I BM WHILE ON ASSIGNMENT THROUGH THE NOSTRO ACCOUNT OF AXIS BANK WHICH ARE SITUATED ABROAD. 4.3. THE LD AO ISSUED A SHOW CAUSE TO THE ASSESSEE AS TO WHY THE FOREIGN ASSIGNMENT ALLOWANCE RECEIVED BY THE ASSESSEE THROUGH TCC SHOU LD NOT BE TREATED AS INCOME RECEIVED IN INDIA. IN RESPONSE, THE ASSESSEE REITE RATED HIS SUBMISSIONS MADE EARLIER AND SUMMARIZED THE SAME AS UNDER:- A) WHEN AN EMPLOYEE OF IBM INDIA PRIVATE LIMITED IS SE NT ON INTERNATIONAL ASSIGNMENT, AXIS BANK UPON INSTRUCTION FROM IBM, IS SUES A TRAVEL CURRENCY CARD (TCC) TO AN EMPLOYEE WHO IS SENT TO A FOREIGN ASSIG NMENT. B) IBM MAINTAINS AN EXCHANGE EARNERS FOREIGN CURRENCY (EEFC) ACCOUNT WITH DEUTSCHE BANK , BANGALORE. C) FROM THE EEFC ACCOUNT OF DEUTSCHE BANK, FUNDS ARE T RANSFERRED TO THE NOSTRO ACCOUNT OF AXIS BANK MAINTAINED OUTSIDE INDIA. D) UPON INSTRUCTION FROM IBM, THE FUNDS ARE THEN TR ANSFERRED FROM THE NOSTRO ACCOUNT OF AXIS BANK MAINTAINED OUTSIDE INDIA TO THE AXIS T CC OF THE RESPECTIVE EMPLOYEE. 4.4. THE LD AO HOWEVER DID NOT HEED TO THE CONTENTI ONS OF THE ASSESSEE AND HELD THAT THE FOREIGN ASSIGNMENT ALLOWANCE WAS RECEIVED BY THE AS SESSEE PURSUANT TO THE EMPLOYMENT CONTRACT ENTERED IN INDIA ; THAT THE FIRST POINT OF RECEIPT OF THE SAME HAPPENS IN INDIA AND THEREAFTER MONIES GET TRANSFERRED BY WAY OF CRE DIT TO TCC ISSUED TO THE ASSESSEE THROUGH THE NOSTRO ACCOUNT OF AXIS BANK. THEREFORE , THE SAID RECEIPT IS TAXABLE IN INDIA AS PER SECTION 5(2) OF THE ACT AND ACCORDINGL Y DENIED THE CLAIM OF EXEMPTION OF THE ASSESSEE IN THE SUM OF RS 51,84,489/-. 5. THE LD CITA DELETED THE ADDITION AND GRANTED REL IEF TO THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD DR ARGUED THAT THE MONIES WERE RECEIVED B Y THE ASSESSEE ONLY PURSUANT TO EMPLOYER EMPLOYEE RELATIONSHIP AND OUT OF EMPLOYME NT CONTRACT WHICH IS ENTERED IN INDIA AND IS ALSO ENFORCEABLE IN INDIAN COURTS. HE ARGUED THAT TCC WAS ISSUED BY AXIS BANK, WHICH IS A PREPAID CARD AND CAN BE LOADED / R ELOADED IN FOREIGN CURRENCY. THE AXIS BANK TCC IS AVAILABLE IN US, AUSTRALIAN, CANAD IAN AND SINGAPORE DOLLARS, EUROS, STERLING POUNDS, SWISS FRANCS AND SWEDISH KR ONER CURRENCY ON VISA PLATFORM . THE US DOLLARS, STERLING POUNDS, EUROS, DIRHAMS AND SAUDI RIYALS VARIANTS ARE ALSO AVAILABLE ON MASTERCARD PLATFORM. ONE CAN USE THE TRAVEL CARD IN ANY COUNTRY WHERE VISA / MASTERCARD HAS ACCEPTANCE. AN INDIVID UAL DOES NOT NEED AN ACCOUNT 5 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 5 RELATIONSHIP WITH AXIS BANK BRANCH OR THE OFFICE OF SELECT FULL-FLEDGED MONEY CHANGERS (FFMC) AND PURCHASE AN AXIS BANK TCC AS HE CAN SIMP LY WALK INTO ANY AXIS BANK BRANCH OR THE OFFICE OF SELECT FFMC AND PURCHASE AN AXIS BANK TCC OVER THE COUNTER. AT THE TIME OF PURCHASE OF SUCH A CARD FOR AMOUNTS EXCEEDING $5000 , THE PURCHASER HAS TO MANDATORILY SUBMIT A COPY OF PASSPORT, COPY OF V ISA ISSUED BY THE COUNTRY OF TRAVEL, COPY OF AIRLINE TICKET AND FORM A2. THE USAGE OF T RAVEL CARD IS TO BE IN STRICT ACCORDANCE WITH THE REGULATIONS OF EXCHANGE CONTROL REGULATION OF THE RESERVE BANK OF INDIA (RBI) AND IN PARTICULAR THE FOREIGN EXCHAN GE MANAGEMENT ACT, 1999 (FEMA). FOR EMPLOYMENT ABROAD, I.E FOR A PERIOD WHO IS PROC EEDING TO WORK ABROAD, THE PRESENT FEMA LIMIT IF $100000 PER FINANCIAL YEAR. HE ARGUED THAT THUS IT IS INDIAN EMPLOYER WHO EXTENDS THIS FACILITY OF TCC BY DEPOSITING MONE Y IN THE CARD ACCOUNT BY PLACING INSTRUCTIONS TO THE BANK. THE CARD NEEDS TO BE PUR CHASED / LOADED /RELOADED FROM THE BANK BRANCH OF THE FFMC OVER THE COUNTER. THE SAID SALARY IS DEPOSITED IN INDIA FIRST AND THE BANK FROM INDIA ISSUES FURTHER INSTRUCTIONS TO LOAN THE SAID CARD WITH THE SAID AMOUNT. THEREFORE, THERE CAN BE NO QUESTION OF REC EIVING THE SALARY AS INCOME OF AN EMPLOYEE IN HIS TCC. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE HAVE GON E THROUGH THE FOLLOWING DOCUMENTS ENCLOSED IN THE PAPER BOOK OF THE ASSESSEE:- A) COPY OF PASSPORT FOR THE RELEVANT PERIOD ENCLOSED IN PAGES 124 TO 128 OF PAPER BOOK. B) CERTIFICATE ISSUED BY IBM INDIA PRIVATE LIMITED EXP LAINING THE ENTIRE FACTS OF PAYMENTS TO ASSESSEE INCLUDING THE DETAILS OF DEDUC TION OF TAX AT SOURCE THEREON TOGETHER WITH ITS PURPOSE ENCLOSED IN PAGE 129 OF PAPER BOOK. C) STATEMENT OF ACCOUNT OF AXIS BANK TCC FOR THE PERIO D 30.11.1999 TO 14.12.2015 ENCLOSED IN PAGES 130 TO 145 OF PAPER BOOK. D) LIST OF VARIOUS NOSTRO ACCOUNTS HELD BY AXIS BANK I N VARIOUS COUNTRIES , OUT OF THIS LIST, THE RELEVANT NOSTRO ACCOUNT FROM WHERE PAYMEN TS WERE MADE TO ASSESSEE HEREIN IS ZURCHER KANTONAL BANK (ZKB) FROM ACCOUNT NUMBER 0700-00037.370 ENCLOSED IN PAGE 146 OF PAPER BOOK. E) SAMPLE INSTRUCTIONS GIVEN BY IBM INDIA PRIVATE L IMITED AUTHORIZING THE AXIS BANK, BANGALORE TO LOAD CURRENCIES TO THE TCC OF ASSESSE E - ENCLOSED IN PAGES 147 TO 148 OF PAPER BOOK. 7.1. FROM THE FACTS NARRATED ABOVE AND ON HEARING T HE LEARNED COUNSELS OF ASSESSEE AS WELL AS FOR THE REVENUE, WE FIND THAT:- 6 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 6 A) THE ASSESSEE IS A NON-RESIDENT INDIVIDUAL AND HA D RENDERED SERVICES OUTSIDE INDIA FOR WHICH HE HAS RECEIVED FOREIGN ASSIGNMENT ALLOWANCE. B) IBM MAINTAINS MONEY IN FOREIGN CURRENCY IN ITS E EFC ACCOUNT MAINTAINED WITH DEUTSCHE BANK, BANGALORE. C) IBM INSTRUCTS AXIS BANK TO ISSUE TRAVEL CURRENCY CARD TO ITS EMPLOYEES WHO ARE SENT ON FOREIGN ASSIGNMENT, WHICH IS LOOSELY CALLED AXIS TCC. D) AXIS BANK HAS MAINTAINED A NOSTRO ACCOUNT WITH I TS CORRESPONDENT BANKER (ZUERCHER KANTONAL BANK, ZURICH). E) IBM TRANSFERS FUNDS FROM ITS EEFC ACCOUNT FROM D EUTSCHE BANK TO THE NOSTRO ACCOUNT OF AXIS BANK (I.E ZUERCHER KANTONAL BANK) F OR THE PURPOSE OF LOADING / RELOADING THE AXIS TCC ISSUED TO THE ASSESSEE WHO I S SENT ON FOREIGN ASSIGNMENT. F) THE EMPLOYEE WHO IS SENT ON FOREIGN ASSIGNMENT U SES THE SAID FUNDS OUTSIDE INDIA OUT OF MONIES TOPPED UP OR CREDITED IN HIS AXIS TCC. HENCE IT COULD BE SAFELY CONCLUDED THAT THE FIRST POINT OF RECEIPT FOR THE ASSESSEE HA PPENS OUTSIDE INDIA. THIS MONEY IS USED BY HIM FOR HIS SUSTENANCE IN SWITZERLAND. BOTH THE ACCRUAL AND RECEIPT OF INCOME HAPPENS OUTSIDE INDIA. HENCE THE SAME IS OUTSIDE TH E AMBIT OF TAX AS PER THE PROVISIONS OF SECTION 5(2) OF THE ACT. THE SERVICES OF THE ASS ESSEE ARE ALSO UTILIZED ONLY OUTSIDE INDIA. G) THIS FOREIGN ASSIGNMENT ALLOWANCE IS DULY SUBJEC TED TO TAX IN THE COUNTRY OF SWITZERLAND AND THE ASSESSEE HAD DULY PAID THE SAID TAX TO THE SWISS GOVERNMENT. H) THE ASSESSEE HAD PAID TAXES IN INDIA IN RESPECT OF SALARY RECEIVED BY HIM IN INDIA, WHICH IS NOT IN DISPUTE. 7.2. WE FIND THAT THE LD DR HAD ARGUED THAT THE FOR EIGN ASSIGNMENT ALLOWANCE GIVEN TO THE ASSESSEE IS NOTHING BUT SALARY AND THAT THE SA ME IS FIRST DEPOSITED IN INDIA AND THEREAFTER IT GETS LOADED INTO THE TCC BY AXIS BANK AS INSTRUCTED BY IBM. IN THIS REGARD, WE FIND FROM THE ACCOUNT STATEMENT OF TCC E NCLOSED IN PAGES 130 TO 145 OF PAPER BOOK FOR THE PERIOD 30.11.1999 TO 14.12.2015 , THAT THE ASSESSEE IS SENT OUTSIDE INDIA WITH A TCC CONTAINING ZERO BALANCE AND THE SA ME IS LOADED/RELOADED PERIODICALLY AS PER THE REQUIREMENT . THIS LOADING OR RELOADING OF FUNDS IN TCC HAPPENS WHEN THE ASSESSEE WAS RENDERING SERVICES OUTSIDE INDIA AND W AS STAYING OUTSIDE INDIA. HENCE THE FUNDS GET DEPOSITED / LOADED / RELOADED IN TCC FOR THE FIRST TIME OUTSIDE INDIA. THEREAFTER THE ASSESSEE WITHDRAWS THE MONIES FOR HI S SUSTENANCE OUTSIDE INDIA . HENCE THE FIRST POINT OF RECEIPT OF THESE FUNDS LOADED / RELOADED IN TCC FOR THE ASSESSEE IS OUTSIDE INDIA. WE FIND THAT THIS SUBMISSION OF THE LD DR IS FACTUALLY INCORRECT AND IS NOT BORNE OUT FROM THE FACTS NARRATED ABOVE. 7.3. WE FIND THAT THE ASSESSEES CASE SQUARELY FALL S UNDER THE PROVISIONS OF EXPLANATION TO SECTION 5(2) OF THE ACT WHICH ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER:- 7 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 7 EXPLANATION 1 INCOME ACCRUING OR ARISING OUTSIDE INDIA SHALL NOT BE DEEMED TO BE RECEIVED IN INDIA WITHIN THE MEANING OF THIS SECTIO N BY REASON ONLY OF THE FACT THAT IT IS TAKEN INTO ACCOUNT IN A BALANCE SHEET PREPARED IN I NDIA. EXPLANATION 2 FOR THE REMOVAL OF DOUBTS, IT IS HE RBY DECLARED THAT INCOME WHICH HAS BEEN INCLUDED IN THE TOTAL INCOME OF A PERSON ON TH E BASIS THAT IT HAS ACCRUED OR ARISEN OR IS DEEMED TO HAVE ACCRUED OR ARISEN TO HIM SHALL NOT AGAIN BE SO INCLUDED ON THE BASIS THAT IT IS RECEIVED OR DEEMED TO BE RECEIVED BY HIM IN INDIA. 7.4. WE FIND THAT THE RELIANCE PLACED BY THE LD AR ON THE CO-ORDINATE BENCH DECISION OF JAIPUR TRIBUNAL IN THE CASE OF ADIT (INTERNATIONAL TAXATION) VS SRI KARTIK VYAS IN ITA NO. 375/JP/2012 DATED 31.12.2014 IS DIRECTLY ON THI S POINT WHICH WAS RENDERED IN THE CONTEXT OF AN IBM EMPLOYEE UNDER SIMILAR CIRCUMSTAN CES. IT WAS HELD AS UNDER:- 5. AT THE OUTSET, THE LEARNED AR FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE APPELL ANT IS AN EMPLOYEE OF IBM INDIA PVT. LTD., WAS SENT ON AN INTERNATIONAL ASSIGNMENT TO NE THERLANDS DURING THE PREVIOUS YEAR 2007-08. THE APPELLANT RECEIVED FOREIGN ALLOWANCES OF RS. 17,27,360/- OUTSIDE INDIA FOR THE SERVICES RENDERED IN NETHERLANDS. AS THE APPELL ANT, QUALIFIED AS A NON-RESIDENT DURING THE RELEVANT ASSESSMENT YEAR AND FOREIGN ALL OWANCES RECEIVED BY THE APPELLANT IS NOT LIABLE TO TAX U/S 5(2) OF THE ACT. THE APPEL LANT HAD DISCLOSED TOTAL INCOME OF RS. 3,27,910/- EXCLUDING THE FOREIGN ALLOWANCES AND AGA INST THIS INCOME, THE TAX OF RS. 48,790/- WAS PAID BY THE APPELLANT. THE EMPLOYER DE DUCTED TDS WRONGLY AT RS. 6,36,484.65 AND APPELLANT ALSO PAID SELF ASSESSMENT TAX AT RS. 4,653/- ON ACCOUNT OF HIS INTEREST INCOME FROM BANK DEPOSITS. THEREFORE, THE APPELLANT HAD CLAIMED REFUND OF RS. 5,92,305/- BY FILING THE RETURN. THE LEARNED ASSESS ING OFFICER SUBMITTED THAT THE AMOUNT OF RS. 17,27,360/- WAS RECEIVED BY THE APPELLANT IN NETHERLANDS FROM HIS EMPLOYMENT ON ACCOUNT OF FOREIGN ALLOWANCES, FOR WHICH HE PROD UCED CERTIFICATE FROM THE EMPLOYER. THE EMPLOYER WAS NON-RESIDENT DURING THE YEAR AND P ROVISIONS OF SECTION 6(1) OF THE ACT IS APPLICABLE. THEREFORE, FOREIGN ALLOWANCES RE CEIVED BY HIM OUTSIDE THE INDIA FOR SERVICES RENDERED OUTSIDE INDIA ARE NOT LIABLE TO B E TAXED IN INDIA U/S 5(2) OF THE ACT. HE ALSO RELIED ON THE VARIOUS CASE LAWS, WHICH WERE RELIED UPON BEFORE THE LEARNED CIT(A), THEREFORE, HE PRAYED TO CONFIRM THE ORDER O F THE LEARNED CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE APPELLANT WAS NON-RESIDENT DURING THE Y EAR UNDER CONSIDERATION AND ALLOWANCES WERE RECEIVED BY HIM IN NETHERLANDS. THE EMPLOYER WRONGLY DEDUCTED TDS, THE APPELLANT HAD CLAIMED REFUND ON IT. THE INDIAN INCOME HAS BEEN CONSIDERED BY THE APPELLANT AS TAXABLE BUT THE ALLOWANCES PAID OUTSI DE THE INDIA ARE NOT TAXABLE U/S 5(2) OF THE ACT IN THE CASE OF NON-RESIDENT. THE CASE LA W RELIED UPON BY THE LEARNED CIT(A) ARE SQUARELY APPLICABLE IN THE CASE OF THE ASSESSEE , THEREFORE, WE CONFIRM THE ORDER OF THE LEARNED CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 7.5. WE FIND THAT THE LD DR PLACED RELIANCE ON THE CO-ORDINATE BENCH DECISION OF CHENNAI TRIBUNAL IN THE CASE OF SRI BALAMUTHU KADIR ESAN VS ITO IN ITA NO. 353/MDS/2016 DATED 29.4.2016 IN SUPPORT OF HIS CONT ENTIONS. WE FIND THAT THE SAID 8 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 8 DECISION IN PARA 9.1. OF THE ORDER HAD CONSIDERED T HE DECISION OF JAIPUR TRIBUNAL IN THE CASE OF ADIT(INTERNATIONAL TAXATION) VS SRI KARTHIK VYAS IN ITA NO. 375/JP/2012 DATED 31.12.2014 AND OBSERVED THAT THE JAIPUR TRIBU NAL DECISION IS FACTUALLY DISTINGUISHABLE WITH THE FACTS BEFORE THE CHENNAI T RIBUNAL. HENCE THE RELIANCE PLACED ON THE DECISION OF CHENNAI TRIBUNAL SUPRA DOES NOT COME TO THE RESCUE OF THE ASSESSEE HEREIN. 7.6. WE ALSO FIND THAT THE HONBLE KARNATAKA HIGH C OURT IN THE CASE OF DIT (INTERNATIONAL TAXATION) VS PRAHLAD VIJENDRA RAO RE PORTED IN 198 TAXMAN 551 (KAR) AND HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS AVTAR SINGH WADHWAN REPORTED IN 247 ITR 260 (BOM) HAD HELD THAT IN THE CASE OF A NON-RESIDENT, WHEN SERVICES ARE RENDERED OUTSIDE INDIA , THE ACCRUAL OF INCOME THER EON HAPPENS OUTSIDE INDIA AND HENCE THE SAME CANNOT BE BROUGHT TO TAX IN INDIA AS PER S ECTION 5(2) OF THE ACT. AS STATED ABOVE, WE FIND THAT THE ASSESSEE WAS ABLE TO GET CO NTROL OVER THE FUNDS IN HIS TCC FOR THE FIRST TIME ONLY IN SWITZERLAND AND NOT IN INDIA AND FIRST POINT OF RECEIPT ALSO HAPPENS ONLY IN SWITZERLAND. HENCE IT COULD BE SAFELY CONC LUDED THAT BOTH ACCRUAL AND RECEIPT OF FUNDS HAPPENS OUTSIDE INDIA THEREBY MAKING THE S AID RECEIPT TO STAY OUTSIDE THE AMBIT OF TAXABILITY U/S 5(2) OF THE ACT. 7.7. WE ALSO FIND THAT IDENTICAL CLAIM OF EXEMPTION OF THE ASSESSEE WAS ALLOWED BY THE LD AO FOR THE ASST YEAR 2014-15 U/S 143(3) OF THE ACT DATED 10.12.2016 AFTER DETAILED EXAMINATION OF THE SAME AND BY GIVING PROPER FINDIN GS IN THE ASSESSMENT ORDER VIDE PARA 5.02 AND 5.03. 7.8. IN VIEW OF THE AFORESAID FINDINGS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRECEDE NTS RELIED UPON HEREINABOVE, WE HOLD THAT THE LD CITA HAD RIGHTLY DELETED THE ADDITION M ADE ON ACCOUNT OF DISALLOWANCE OF CLAIM OF EXEMPTION IN RESPECT OF FOREIGN ASSIGNMENT ALLOWANCE RECEIVED BY THE ASSESSEE OUTSIDE INDIA . HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CITA IN THIS REGARD. ACCORDINGLY, THE GROUNDS RAISED BY THE REVE NUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED IN ALL THE THREE CASES. 5. IN VIEW OF THE AFORESAID FINDINGS IN THE FACTS A ND CIRCUMSTANCES OF THE CASE AND BY RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRECEDE NTS RELIED UPON HEREINABOVE, WE HOLD THAT THE LD CITA HAD RIGHTLY DELETED THE ADDITION M ADE ON ACCOUNT OF DISALLOWANCE OF CLAIM OF EXEMPTION IN RESPECT OF FOREIGN ASSIGNMENT ALLOWANCE RECEIVED BY THE ASSESSEE 9 ITA NO.656 /KOL/2017 SUBHANKAR SEN A.YR.2013-14 9 OUTSIDE INDIA. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CITA IN THIS REGARD. ACCORDINGLY, THE GROUNDS RAISED BY THE REVE NUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 01.0 8.2018 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.08.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. DCIT(IT), CIRCLE-2(1), KOLKATA, AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY, KOLKATA-700107. 2. MR. SUBHANKAR SEN, 6, SUKANTA SARANI, 3 RD LANE, P.O.-NONACHANDANPUKUR, BARRACKPORE, KOLKATA-700122. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S