Case Law Details
Amit Laroya Vs ACIT (ITAT Delhi)
The recent decision by the Income Tax Appellate Tribunal (ITAT) in the case of Amit Laroya vs ACIT (ITAT Delhi) has significant implications for the taxation of salary income earned by a Korean resident for services rendered outside India. The key contention revolves around the applicability of Article 15(1) of the India-Korea Double Taxation Avoidance Agreement (DTAA).
Amit Laroya, the appellant, contested the order of the Commissioner of Income Tax (CIT) in appeal dated 29/04/2022 against the order passed by the Dispute Resolution Panel (DRP) under Section 144C(5) of the Income Tax Act for the Assessment Year 2018-19. The primary issue in question was whether the salary income of Rs.5,11,71,307 earned by Laroya in Korea was eligible for exemption under Article 15(1) of the India-Korea DTAA.
The appellant, being a non-resident during the assessment year, filed a return of income declaring total income of Rs.57,69,390. The Assessing Officer (AO), based on Form 26AS, observed that Laroya received Rs.5,40,07,330 as income from salary from an Indian resident company, 3M India Limited. Despite the short stay of 31 days in India during the relevant year, Laroya offered a sum of Rs.29,86,022 as salary proportionate to his Indian stay.
The crucial argument hinged on the interpretation of Article 15(1) of the India-Korea DTAA, which provides an exemption for employment income if the individual is a resident of Korea and the employment is outside India. Laroya met both conditions, rendering his salary earned in Korea non-taxable in India.
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