Case Law Details
Devi Dayal Vs DCIT (ITAT Delhi)
Introduction: The case of Devi Dayal Vs DCIT, adjudicated by ITAT Delhi, pertains to the taxation of salary earned by a non-resident outside India. This article delves into the detailed analysis of the case, examining the legal provisions and ultimately presenting the conclusion reached by the tribunal.
Detailed Analysis: The case revolves around the assessment years 2016-17 and 2017-18, where the Assessing Officer (AO) made additions to the assessee’s income due to salary and allowances received from M/s Datamatics Global Services Ltd. While the assessee filed a return of income declaring an amount, the AO initiated proceedings under sections 147/148 of the Income-tax Act, 1961, alleging non-disclosure of various allowances.
The central issue was the taxability of the salary paid by an Indian company to a non-resident employee, stationed abroad for a project. The Assessing Officer contended that the salary and compensatory allowances were taxable in India, as the assessee did not furnish a tax residency certificate (TRC).
However, the tribunal examined the provisions of Sections 5, 9, and 15 of the Income Tax Act, 1961, to determine the scope of total income and the taxability of income earned by a non-resident in India. Section 9(1)(ii) specifies that income under the head “Salaries” is taxable in India if earned in India.
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