Santanu Sanyal Vs ACIT (ITAT Kolkata)
ITAT Kolkata held that foreign allowance received by a non-resident outside India for services rendered outside India does not fall within the scope of total income under section 5(2) of the Income Tax Act.
Facts-
The appellant filed his return of income declaring taxable income at Rs. 2,55,640/- after claiming a deduction of INR 2,19,372/- under Chapter VI-A of the Act. AO assessed income at INR 1,15,28,610/-.
It is contested that AO has erred in adding the value of stock prerequisite amounting to Rs. 1,59,053/- and further AO has erred in disallowing exemption claimed by the appellant under Article 61 of the India-UK Double Taxation Avoidance Agreement amounting to INR 57,93,857/-.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion-
Held that a non-resident would be taxable in India only in respect of income received/deemed to be received in India or the income accrued / deemed to accrue in India. In the present case the Appellant being a Non-Resident, has received the foreign allowances of INR 48,39,078 in United Kingdom for services rendered in United Kingdom. Hence we are in this view that the foreign allowance of INR 48,39,078 does not fall within the scope of total income under section 5(2) of the Act.
