Sivakarthick Raman Vs ACIT (ITAT Chennai)
ITAT Chennai held that salary income for services rendered in China is not taxable in India. Accordingly, benefit of exemption under Article 15(1) of the DTAA between India-China. Thus, order set aside and appeal allowed.
Facts- The assessee, an employee of BMW India Private Limited (BMW India) was on an assignment/secondment to BMW Brilliance Automotive Limited (BMW China) during the FY 2021-22 and was rendering services/exercising employment with BMW China in China during this period. While on an International assignment with BMW China, the assessee was based in China and was physically present in China and was rendering services in China during the FY 2021-22. The assessee was in India for less than 60 days during the FY 2021-22 and qualified as a Non-Resident in India as per Explanation (b) to Section 6(1) of the Act. The Appellant was present in India for “Nil” days during the FY 2021-22. The assessee qualified as Tax Resident of China for the Calendar Year 2021 and 2022 as per Article 4(1) of India- China Double Taxation Avoidance Agreement (DTAA).
During the period of assignment of assessee to BMW China, assessee’s payroll remained in India for administrative convenience and hence taxes were duly withheld at source by BMW India in respect of salary received by the assessee in India for employment exercised/services rendered in China as evidenced by the revised Form 16 and Updated Form 26AS for FY 2021-22.
