Case Law Details
Pralay Pradyotkanti Gosh Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that income is not taxable in India merely because the overseas employer paid salary into NRE account of the assessee in India.
Facts- The assessment order was passed u/s. 143(3) of the Act on 18-12-2018 accepting the income declared in the return of income filed with the assessee. However, the Principal CIT initiated 263 proceedings by observing that the assessee had filed return of income for assessment in 2016-17 declaring income of Rs. 1,16,700/- and assessee had shown Rs. 66,70,790/- as exempt income in return of income. Thereafter, the case of the assessee was selected for scrutiny to examine the “claim of large exempt income” claimed by the assessee in the return of income. During the course of assessment, the assessee had given categorisation of this exempt income and submitted that out of total income of Rs. 66,70,790/-, a sum of Rs. 45,66,800/- is salary income received by the assessee from his employer “Oceaneering International GmbH”. The assessee claimed the said income as “exempt” income because of his non-residential status and the salary earned is for working in international waters. However, the Principal CIT was of the view that AO did not conduct cogent enquiries during the course of assessment proceedings.
The assessee is in appeal before us against the aforesaid order passed by the Principal CIT under section 263 of the Act.
Conclusion- It is a well settled proposition that simply because the overseas employer paid salary into NRE account of the assessee in India, would by itself, not imply that the income is taxable in India. Further, the fact that TDS was deducted by the project office of the overseas company in India, using TAN registered at Mumbai, India also is not a determinative factor in ascertaining whether a person/the assessee was a non-resident or not and whether his income was exempt “from Taxation in India”.
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