Sri Balamurhu Kadiresan, Coimbatore V. ITO, CHENNAI

MA 212/CHNY/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5401 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 20-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 16-08-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Keywords: Services rendered outside India; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , ! ' , # $% & [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ] M.P. NO.212/MDS./2016 ( I.T.A.NO.353/MDS./2016, ASSESSMENT YEAR : 2011-1 2 ) SRI BALAMURHU KADIRESAN , 40, SUBA DHARSAN, III STREET, INDRA GARDENS, UPPLIPALAYAM POST, COIMBATORE 641 015. VS. THE ITO, INTERNATIONAL TAXATION -1(1), CHENNAI. [PAN AIAPB 3420 H ] ( '( / APPELLANT) ( )*'( /RESPONDENT) / APPELLANT BY : MR.NAGESWAR RAO, ADVOCATE /RESPONDENT BY : MR.SUPRIYOPAL, ADVOCATE / DATE OF HEARING : 20 - 01 - 201 7 / DATE OF PRONOUNCEMENT : 10 - 02 - 201 7 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS MISCELLANEOUS PETITIONS IS FILED BY THE ASS ESSEE PRAYING FOR RECALL OF THE ORDER OF THE TRIBUNAL IN ITA NO.3 53/MDS./2016 FOR THE ASSESSMENT YEAR 2011-12 DATED 29 TH APRIL, 2016. 2. IN THIS CASE THE ASSESSEE CAME IN APPEAL BEFORE US CHALLENGING THE TAXABILITY OF FOREIGN ALLOWANCES RE CEIVED BY THE ASSESSEE AT ` 32,25,164/-, THOUGH CLAIMED EXEMPTION U/S.5(2) OF THE MP NO.212/16 :- 2 -: ACT. THE TRIBUNAL AFTER CONSIDERING THE ENTIRE FACT S AND CIRCUMSTANCES OF THE CASE AND ARGUMENT OF THE ASSESSEES COUNSEL, DISMISSED THE APPEAL OF ASSESSEE BY GIVING AN FINDINGS AS FOLLOW S:- 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS REMAINED AS AN EMPLOYEE OF IBM INDIA P VT. LTD. THE SALARY WAS ADMINISTRATED UNDER HOME LOCATE D SALARY PLAN AS PER WHICH THE SALARY WOULD BE PAID I N HOME LOCATION COUNTRY TO ASSESSEES HOME LOCATION BANK A ND THE IBM INDIA PVT. LTD. HAD DEDUCTED TDS ON ENTIRE SALA RY PAID TO THE ASSESSEE. MORE SPECIFICALLY, THE ALLOWANCES HAD BEEN DEPOSITED IN AXIS BANK ACCOUNT NO. 009040101361652, WHERE THE BANK IS LOCATED IN NO.9, MG ROAD, BANGALORE-560001. CONTRARY TO THIS, THE ASSE SSEES COUNSEL TOOK A PLEA THAT THE PAYMENT OF FOREIGN ALL OWANCES WAS RECEIVED BY THE ASSESSEE THROUGH NOSTRO ACCOUNT OF AXIS BANK BY IBM INDIA PVT. LTD. SUBSEQUENTLY, FUN DS ARE REMITTED FROM NOSTRO ACCOUNT TO IBM BRANCH AS PER T HE INSTRUCTION OF IBM INDIA PVT. LTD. AS SUCH, IT IS TO BE ACCRUED/RECEIVED OUTSIDE INDIA. ON FACTUAL EXAMINA TION OF THE RECORD, AS WE OBSERVED EARLIER, THE AMOUNTS HAV E BEEN CREDITED TO THE ASSESSEES ACCOUNT IN INDIA I.E. AX IS BANK ACCOUNT NO.009040101361652 FOR THE PERIOD FROM 1.4.2010 TO 31.3.2011. HOWEVER, IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS REMAINED AS AN EMPLOYEE OF IBM IND IA PVT. LTD. AND THE LAW OF LAND WOULD REMAIN APPLICAB LE TO THE ASSESSEE AND FURTHER, SALARY WAS CONTINUED TO B E PAID UNDER HOME LOCATION SALARY PLAN. AS THE SALARY WAS PAID TO ASSESSEES HOME LOCATION BANK, TDS WAS RIGHTLY DEDU CTED MP NO.212/16 :- 3 -: BY IBM INDIA PVT. LTD. ACCORDINGLY, FORM 16 WAS IS SUED TO THE ASSESSEE. 9.1 IT IS ALSO AN ADMITTED FACT THAT THE SALARY REC EIVED BY THE ASSESSEE FOR THE SERVICES RENDERED OUTSIDE I NDIA AND THE SERVICES ARE UTILISED IN INDIAN COMPANY FOR GEN ERATION OF INCOME IN INDIA. IT IS ALSO AN ADMITTED FACT THA T THE SALARY WAS CREDITED IN BANK ACCOUNT AS INR. CONTRA RY TO THIS, THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THE TRIBUNAL IN THE CASE CITED SUPRA. THERE IS QUALITA TIVE DIFFERENCE BETWEEN THE FACTS OF THE PRESENT CASE AN D THE CASE RELIED ON BY THE LD. AR. IN THAT CASE, THE NO N-RESIDENT RECEIVED SALARY AND ALLOWANCES IN NETHERLANDS AND A LSO THE ASSESSEE HAD PAID TAXES ON SALARY AND ALLOWANCES RE CEIVED IN NETHERLANDS IN THE CONCERNED PERIOD AND HENCE, I T IS NOT TAXABLE IN INDIA. FURTHER, WHEN THE SALARY RECEIVE D BY THE ASSESSEE IS TAXABLE IN INDIA, ON THE SAME PROPOSITI ON, THE ALLOWANCES RECEIVED BY THE ASSESSEE WAS INEXTRICABL Y LINKED TO THE SALARY. IN VIEW OF THE FUNCTIONS OF THE ASS ESSEE IN ABROAD, THE ALLOWANCES RECEIVED BY HIM CANNOT BE GI VEN SEPARATE TREATMENT THAN SALARY, WHEN THE ASSESSEE W AS CONTINUED TO WORK UNDER THE CONTROL AND SUPERVISION OF IBM INDIA PVT. LTD. HENCE, WE ARE OF THE OPINION THAT THE LOWER AUTHORITIES HAVE TAKEN A CORRECT VIEW OF THE FACTS SO AS TO HOLD THAT SEC.5(2) OF THE ACT IS APPLICABLE IN THIS CASE. ACCORDINGLY, WE ARE INCLINED TO CONFIRM THE ORDERS OF THE LOWER AUTHORITIES. 3.1 THE LD.A.R POINTED OUT THAT THE ISUSE OF DEDUC TION OF TAXES BY IBM WAS NOT DISCUSSED DURING THE COURSE OF HEARING BEFORE THE MP NO.212/16 :- 4 -: TRIBUNAL AND HENCE, THE OBSERVATION MADE BY THE TRI BUNAL IS CLEARLY ERRONEOUS. FURTHER, LD.A.R SUBMITTED THE FOLLOWING ADDITIONAL EVIDENCE PRODUCED BY ASSESSEE AT THE TIME OF HEARING OF APPE AL CLEARLY SHOWS THE FOLLOWING:- A) PARAGRAPH 4 OF THE RBI APPROVAL GRANTED TO IBM I NDIA PVT LTD.(ATTACHED WITH ADDITIONAL EVIDENCE APPLICATION DATED 23.04.2016) CLEARLY INDICATES THAT PERMISSION GRANTED IS CONFIN ED TO UTILIZATION OF TRAVEL CURRENCY CARD OUTSIDE INDIA. B) PURSUANT TO ABOVE PERMISSION AXIS BANK WAS INSTR UCTED BY IBM INDIA PVT LTD. TO TRANSFER ALLOWANCES TO ASSESSEES OVERSEAS TRAVEL CURRENCY CARD ACCOUNT NO.009040101361652 HELD WITH JP MORGAN CHASE BANK, FRANKFURT GERMANY. A COPY OF LETTER DA TED MARCH 13, 2016 FROM AXIS BANK CONFIRMING DETAILS OF ITS NOSTR O ACCOUNTS IS ALREADY PART OF RECORD AS ADDITIONAL EVIDENCE. C) FACTUALLY INCORRECT ASSUMPTION WAS MADE THAT ACC OUNT NO.009040101361652 IS AN ACCOUNT OF ASSESSEE WITH A XIS BANK AT BENGALURU, BY REFERRING TO INDIAN ADDRESS MENTIONED ON STATEMENT OF AXIS TRAVEL CURRENCY CARD AND IGNORING OTHER MATERI AL ON RECORD. ASSESSEE SUBMITS THAT ACCOUNT NO.009040101361652 IS AN ACCOUNT WITH JP MORGAN CHASE BANK, FRANKFURT, GERMANY. THE REFORE, CONCLUSION THAT MONIES WERE RECEIVED IN INDIA BY AS SESSEE IS GROSSLY INCORRECT. MP NO.212/16 :- 5 -: D) THE CURRENCY IN AXIS TRAVEL CURRENCY CARD IS DEN OMINATED IN EUR WHICH IS CLEARLY REFLECTING IN STATEMENT SUBMITTED WITH YOUR HONOURS ON APRIL 23 RD 2016. E)FURTHER LETTER ISSUED BY ASSESSEES EMPLOYER M/S. IBM INDIA PVT LTD. WHICH IS PLACED AT PAGE 88 OF THE PAPER BOOK CLEARL Y INDICATES THAT THE FOREIGN ALLOWANCES WERE PAID OUTSIDE INDIA. F) REFERENCE TO CITIBANK ACCOUNT IN INDIA WHICH IS PLACED AT PAGE 59 OF THE PAPER BOOK, WOULD SHOW THAT SALARY WAS RECEIVED IN INDIA. THIS AMOUNT HAS ALREADY BEEN OFFERED TO TAX BY THE ASSES SEE, ALTHOUGH THE SAME IS TOWARDS SERVICES RENDERED OUTSIDE INDIA. 3.2 IN VIEW OF THE ABOVE FACTS I.E. (A) TO (F), TH E INFERENCE BY TRIBUNAL THAT FOREIGN ALLOWANCES WERE ALSO RECEIVED IN INDIA IS CONTRARY TO FACTS AND DOCUMENTS AVAILABLE ON RECORD. THE MI STAKE APPARENT ON THIS VITAL ASPECT BEING CRITICAL TO FINAL OUTCOME I N APPEAL, DESERVES TO BE CORRECTED, FOR WHICH THE LD.A.R CONTENDED THAT O RDER OF TRIBUNAL TO BE RECALLED. 3.3 FURTHER, LD.A.R SUBMITTED THAT THE ABOVE CONC LUSION OF FACTS IN PRESENT CASE BEING DIFFERENT FROM FACTS IN CASE OF ADIT V SHRI KARTIC VYAS, UDAIPUR IN ITA 375/ JP/ 2012 DARED 31/12/2014 IS AL SO AFFECTED BY THE ABOVE ERROR AND PRESUMPTION THAT FOREIGN ALLOWANCES IN CA SE OF THE PRESENT APPELLANT WERE RECEIVED IN INDIA. IF ABOVE ERROR RE LATING TO RECEIPT OF FOREIGN ALLOWANCE IS CORRECTED, IT WOULD BE FOUND THAT IN B OTH THE CASES FOREIGN MP NO.212/16 :- 6 -: ALLOWANCES WERE RECEIVED THROUGH THEIR AXIS TRAVEL CURRENCY CARD FROM THE VERY SAME EMPLOYER OUTSIDE OF INDIA FOR SERVICES RE NDERED IN NETHERLANDS.. 3.4 ACCORDING TO LD.A.R., IN THE PRESENT CASE, THE ASSESSEE HAD PAID THE TAXES ON SALARY RECEIVED IN INDIA AND SEEKING EXEMP TION FOR ALLOWANCES RECEIVED IN NETHERLANDS CANNOT BE A BASIS FOR TAXAT ION OF FOREIGN ALLOWANCES WHICH WERE CLEARLY HELD TO BE NON-TAXABLE BY THE EA RLIER DECISION OF COORDINATE BENCH OF THE TRIBUNAL. HENCE, THE LD.A .R PRAYED THAT THE CONCLUSION REACHED BY THE TRIBUNAL IN PRESENT ASSES SEES CASE IS CLEARLY ERRONEOUS DUE TO MISTAKES APPARENT FROM RECORD AS D ETAILED HEREINABOVE. THE LD.D.R RELIED ON THE ORDER OF TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ARGUMENT OF THE LD.A.R MADE AS ABOVE WAS ALSO MADE AT THE TIME OF HEARING THE APPEAL, WHICH WERE DULY CONSIDERED BY T HE TRIBUNAL AND GIVEN THE FINDINGS. NOW CONSIDERATION OF THE SAME ARGUENT BY THIS TRIBUNAL ONCE AGAIN, AMOUNTS TO REVIEW OF EARLIER TRIBUNAL ORDER FOR WHICH THE TRIBUNAL HAS NO POWER. THE LD.A.R HAS GIVEN MUCH FORCE TO SAY THAT TRAVEL CURRENCY CARD ACCOUNT IS NOT AN INDIAN ACCOUNT. IT IS AN ACC OUNT WITH JP MORGAN CHASE BANK, FRANKFURT GERMANY AND DEPOSITING THE MO NEY INTO THAT ACCOUNT IN THE FORM OF EURO CANNOT BE CONSIDERED AS AN INLAND REMITTANCE SO AS TO BRING THE SAME INTO TAXATION. IN OUR OPINION, THE AXIS BANK TRAVEL CURRENCY CARD IS A PRE PAID FOREIG N CURRENCY CARD, WHICH IS AVAILABLE IN THE DENOMINATIONS OF US $, GB P, EURO, CAD, MP NO.212/16 :- 7 -: SGD, CHF, SEK, JPY, AED AND SIR. BECAUSE IT WAS PA ID THROUGH TRAVEL CURRECNY CARD IN INDIA CANNOT BE SAID THAT IT WAS N OT PAID IN INDIA. BEING SO, IN OUR OPINION, THE ARGUMENT PUT FORTH BY THE ASSESSEES COUNSEL IS NOT AT ALL FRESH ARGUMENT AND THE SAME A RGUMENT WAS DULY CONSIDERED BY THIS TRIBUNAL ON EARLIER OCCASION. HE NCE, WE DO NOT FIND MERIT IN THAT SO AS TO RECALL OUR ORDER CITED SUPRA . 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI ELD BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 10 TH FEBRUARY, 2017, AT CHENNAI. SD/ - SD/ - ( . . . ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! ' ) (CHANDRA POOJARI) # / ACCOUNTANT MEMBER / CHENNAI ! / DATED: 10 TH FEBRUARY, 2017. K S SUNDARAM ' #$$%&'$(' / COPY TO: $ 1 . / APPELLANT 3. ' $' )$* / CIT(A) 5. '+,$%%-. / DR 2. / RESPONDENT 4. ' $' ) / CIT 6. ,/0$1 / GF