Syed Ammar Hussian, Hyd, Hyderabad V. ITO (International Taxation)-I, Hyd, Hyderabad

ITA 841/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6145 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 03-06-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: MANONEET D
• Keywords: Salary income; Revised return
• Section: 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 841/HYD/2016 ASSESSMENT YEAR: 2010-11 SRI SYED AMMAR HUSAIN HYDERABD PAN AGQPS3983A VS. THE INCOME TAX OFFICER (INTERNATIONAL TAXATION)-1 HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANONEET D REVENUE BY : SHRI K.J RAO DATE OF HEARING : 19-01-2017 DATE OF PRONOUNCEMENT : 24-02-2017 ORDER PER P. MADHAVI DEVI, J.M.: THIS IS THE ASSESSEES APPEAL FOR THE A.Y. 2012-13 , AGAINST THE ORDER OF THE CIT(A)-10, HYDERABAD, DATE D 16- 12-2016. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN UPHOLDING THE ASSESSMENT ORD ER DATED 28-01-2013 IN WHICH AN ADDITION OF RS. 4,47,4 54, BEING SALARY PERTAINING TO THE MONTHS OF JUNE & JUL Y OF 2009, WAS MADE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL AND AN NRI, HAS FILED HIS RETURN OF INCO ME FOR THE A.Y 2010-11 ON 13-07-2010 BY ADMITTING A TAXABL E INCOME OF RS. 3,39,700/-. THEREAFTER, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 09-02-2012 ADMITTING TA XABLE 2 ITA NO. 841/HYD/2016 SHRI SYED AMMAR HUSSAIN, HYDERABAD.. INCOME AT RS. 12,33,600. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE A.O DIRECTED THE ASSESSEE TO PRODUCE THE DETAILS OF THE SALARY INCOM E RETURNED BY THE ASSESSEE. FROM THE DETAILS FURNISH ED BY THE ASSESSEE, THE A.O OBSERVED THAT THE ASSESSEE HA S ADMITTED AN AMOUNT OF RS. 4,47,943/- UNDER THE HEAD OF SALARY INCOME, BUT AS PER THE STATEMENT COPY OF THE STANDARD CHARTED BANK ACCOUNT AND ALSO AS PER THE D ETAILS AVAILABLE IN 26 AS, THE ASSESSEE HAS RECEIVED AN AM OUNT OF RS. 8,95,108/- TOWARDS HIS SALARY FROM HIS EMPLOYER STANDARD CHARTERED BANK. THEREFORE, THE ASSESSEES EXPLANATION WAS CALLED FOR. 3. THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD MOV ED FROM INDIA TO AFGHANISTAN ON INTERNATIONAL ASSIGNME NT W.E.F 01-06-2009 AND HENCE, IN THE RETURN OF INCOME FILED, THE SALARY RECEIVED FOR THE MONTHS OF APRIL & MAY 2 009 ALONE WAS ADMITTED AND FOR THE MONTHS OF JUNE & JUL Y 2009 WAS NOT ADMITTED. IT WAS STATED THAT DUE TO D ELAY IN THE RECEIVING THE INFORMATION BY PAYROLL SYSTEM OF THE EMPLOYER, THE SALARY WAS PAID FOR THE MONTHS OF JUN E AND JULY OF 2009 AND ACCORDINGLY, THE TDS WAS ALSO DEDU CTED AND DEPOSITED WITH THE AUTHORITIES. IT IS SUBMITTE D THAT THE SALARY PAID TO THE ASSESSEE WAS AN ERRONEOUS PAYMEN T WHICH HAS SUBSEQUENTLY BEEN RETURNED TO THE EMPLOYE R AND THEREFORE IS NOT TO BE TAXED IN THE HANDS OF HE ASS ESSEE FOR THE RELEVANT A.Y. 3 ITA NO. 841/HYD/2016 SHRI SYED AMMAR HUSSAIN, HYDERABAD.. 4. THE A.O, HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTIONS AND HELD THAT THE SALARY FOR THE MONTHS OF JUNE & JULY OF 2009 HAS BEEN PAID TO THE ASSESSEE I N INDIA AND THEREFORE IS TO BE BROUGHT TO TAX IN INDIA. AGG RIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER OF THE A.O OBSERVING THAT THOUG H THE ASSESSEE HAS RETURNED THE SALARY FOR THESE TWO MONT HS TO THE EMPLOYER IN THE NEXT ASSESSMENT YEAR, THE TDS M ADE BY THE EMPLOYER AND DEPOSITED WITH THE AUTHORITIES HAS NOT BEEN RETURNED BY THE ASSESSEE NOR HAS THE TDS CRED IT TAKEN BY THE EMPLOYER BEEN WITHDRAWN. THEREFORE, ACCORDING TO HIM, THE ASSESSEE IS NOT ELIGIBLE FOR THE RELIEF CLAIMED. HOWEVER, HE DIRECTED THE A.O TO GIVE CRED IT OF TDS U/S 199 OF THE IT ACT. AGGRIEVED BY THE ORDER OF T HE CIT(A) IN TREATING THE SALARY OF JUNE & JULY 2009 AS INCOM E OF THE ASSESSEE, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS BEEN SENT ON AN INTERNATIONAL ASSIGNME NT TO AFGHANISTAN AND THE OFFER LETTER WAS GIVEN TO THE A SSESSEE ON 25-05-2009 TO BE EFFECTIVE FROM 01-06-2009 WHICH WAS FORMALLY ACCEPTED BY THE ASSESSEE IN WRITING ON 13 -07- 2009, (COPIES OF THESE LETTERS ARE PLACED BEFORE US AT PAGES 67 TO 69 OF PAPER BOOK), BUT HE HAD PROCEEDED TO AFGHANISTAN IMMEDIATELY ON RECEIPT OF VISA ON 02-06 -2009 AND HAS DISCHARGED HIS FUNCTIONS IMMEDIATELY THEREA FTER. HE HAS ALSO DRAWN OUR ATTENTION TO THE COPY OF THE AFGHANISTAN VISA GIVEN TO THE ASSESSEE WHICH IS W.E .F 02- 06-2009. HE SUBMITTED THAT UNLESS THE RELEVANT DOCU MENTS 4 ITA NO. 841/HYD/2016 SHRI SYED AMMAR HUSSAIN, HYDERABAD.. SUPPORTING HIS EMPLOYMENT IN AFGHANISTAN ARE NOT SUBMITTED, THE AFGHANISTAN GOVERNMENT WOULD NOT HAV E ISSUED THE VISA. HE FURTHER SUBMITTED THAT ERRONEO USLY THE SALARY FOR THE PERIODS OF JUNE AND JULY WAS ALSO PA ID TO THE ASSESSEE IN INDIA AS THE ASSESSEES MOVEMENT TO AFGHANISTAN WAS UPDATED IN THE PAYROLL ONLY SUBSEQU ENTLY AND THAT THE ASSESSEE HAD RETURNED THE SAME TO HIS EMPLOYER AS SOON AS THE MISTAKE WAS DETECTED AS A R ECOVERY IN APRIL 2010. THEREFORE, ACCORDING TO THE LD. COUN SEL FOR THE ASSESSEE, THIS IS NOT PART OF THE SALARY INCOME ACCRUED TO THE ASSESSEE IN INDIA FOR THE RELEVANT PERIOD. AS REGARDS TDS MADE BUT NOT RETURNED BY THE ASSESSEE, HE SUBMI TTED THAT THE CLAIM OF THE ASSESSEE FOR THE REFUND OF T HE TDS IS PENDING WITH THE DEPARTMENT AND HE GAVE AN UNDERTAK ING THAT THE ASSESSEE SHALL REFUND THE TDS AMOUNT TO TH E EMPLOYER COMPANY AS SOON AS HE RECEIVED THE REFUND FROM THE DEPARTMENT. 6. THE LD. DR WAS ALSO HEARD. 7. AFTER TAKING INTO CONSIDERATION THE RIVAL CONTEN TIONS AND THE MATERIAL ON RECORD, WE FIND FROM THE COPIES OF THE ASSESSEES PASSPORT THAT HE HAD ARRIVED IN AFGHANIS TAN ON 02-06-2009 ITSELF AND THEREFORE THE SALARY OF JUNE & JULY 2009 CANNOT BE SAID TO HAVE ACCRUED TO THE ASSESSEE IN INDIA. FURTHER, WE ALSO FIND THAT THE SALARY FOR T HE MONTHS OF THE TWO MONTHS WHICH HAS BEEN RECEIVED BY THE AS SESSEE IN INDIA HAS ALSO BEEN RETURNED SUBSEQUENTLY AND 5 ITA NO. 841/HYD/2016 SHRI SYED AMMAR HUSSAIN, HYDERABAD.. THEREFORE, IN OUR OPINION, IT CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE IN INDIA.. WE ALSO RECORD TH E UNDER TAKING OF THE ASSESSEE THAT THE TAX REFUND RECEIVED BY THE ASSESSEE SHALL BE RETURNED BY THE ASSESSEE TO THE E MPLOYER AND ASSESSEE SHALL NOT RETAIN SUCH TDS. ACCORDINGLY , THE ASSESSEES APPEAL IS ALLOWED 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED PRONOUNCED IN THE OPEN COURT ON 24 TH FEBRUARY, 2017. SD/- SD/- (B. RAMAKOTAIH) (P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 24 TH FEBRUARY, 2017 KRK 1) SHRI SYED AMMAR HUSAIN, 10-5-3/2/4, MASAB TANK, HYDERABAD 500 028. 2) ITO, INTERNATIONAL TAXATION-I, HYDERABAD 3) CIT(A) -10, HYDERABAD 4) CIT(IT & TP), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE