Case Law Details
Tapas Kr. Bandopadhyay Vs Deputy Director of Income-tax (ITAT Kolkata)
Introduction: The case of Tapas Kr. Bandopadhyay vs. Deputy Director of Income-tax, Kolkata, revolves around the taxation of the remuneration received by a non-resident individual, a Marine Engineer, for services rendered outside India. The key issue is whether the salary, directly remitted from a foreign company to the assessee’s Non-Resident External (NRE) account in India, is taxable in India.
Background: For the assessment year 2010-11, the assessee, a non-resident individual engaged in marine engineering, declared his total income and claimed exemptions for the remuneration received from two foreign companies, M/s. Great Offshore Ltd. and M/s. Bibby Ship Management (Singapore) Pte. Ltd. The Income Tax Department raised concerns about the taxability of the salary remitted to the NRE account.
Legal Proceedings: The Assessing Officer (AO) issued a show cause notice, asserting that the amount received in India is taxable as per Section 5 of the Income-tax Act. The assessee contended that as a non-resident, his salary income received outside India in foreign currency is exempt under Section 5 of the Act.
The AO, rejecting the assessee’s claim, added the remitted amount to the taxable income, emphasizing that the location of the first control over the funds was in India.
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