HIGH COURT OF KARNATAKA
Director of Income Tax, International Taxation, Bangalore
Manoj Kumar Reddy Nare
AND RAVI MALIMATH, JJ.
IT APPEAL NO. 431 OF 2009
JUNE 20, 2011
1. This appeal is filed by the revenue being aggrieved by the order dated 3-4-2009 passed by the Income-tax Appellate Tribunal, Bangalore Bench ‘A’ (hereinafter called as ‘Tribunal’ for brevity) bearing 1TA No. 1020/Bang/08 for the assessment year 2005- 06.
2. The assessee is an employee of M/s. IBM Global Services India Pvt. Ltd. The employer issued a Deputation Letter to the assessee on 23-1-2004 directing him to work with designated IBM Global Services Customers on specified projects and the location was decided in Chicago, USA. As per the Deputation order, it was mentioned that the assessee will continue to be an employee of IBM Global Sendees India Pvt. Ltd. While assessing income-tax of the assessee for the assessment year 2005-06, the Assessing Officer relied on Paragraph 3 of the Deputation Order and assessed the status of the assessee as a ‘non-resident’ as per the provisions of section 6(1) of the Income-tax Act, specifically, section 6(1)(c) of the Act, Being aggrieved by the same. Revenue filed appeal before the Appellate Authority and the Appellate Authority, by order dated 17-6-2008, confirmed the order passed by the Assessing Officer.
3. Being aggrieved by the same, appeal was filed before the Income-tax Appellate Tribunal, which has allowed the appeal partly by holding that for determining the status of the assessee as to whether he has to be assessed as a ‘resident’ or as a ‘non-resident’ of India, the period spent towards visit to India has to be deducted. The Tribunal held that the assessee was not in India for the requisite number of days under section 6(1)(c) and accordingly held that the assessee’s status has to be treated as non-resident, and remitted the matter to the Assessing Officer to pass appropriate orders accordingly. Being aggrieved by the said order of the Tribunal, this appeal is filed contending that admittedly the assessee was in India for more than the requisite number of days, that is under section 6(1)(c) and this appeal should be considered by raising the substantial question of law as to,
“Whether the Tribunal was correct in holding that the assessee should be treated as a non-resident and not liable to tax in India as per the provisions of the Income-tax Act, read with DTAA between India and USA, without taking into consideration the fact that the assessee was on deputation and had been a resident in India for 78 days daring the current assessment year and more than 385 days during the past 4 years and his entire income was liable to tax as a resident of India, both under the Income-tax Act as well as DTAA between India and USA?
4. We have heard the learned counsel appearing for the appellants. The learned counsel reiterated the averments made out in the appeal and submitted that the assessee was in India for a period of 78 days during the current assessment year and more than 365 days during the past four years and therefore, his status is to be treated as a resident of India for assessment, in view of section 6(1)(c) of the Act.
5. We have given careful consideration to the contention of the learned counsel appearing for the appellants and scrutinized the material on record.
6. The material on record would clearly show the fact that the assessee was to work in U.S.A., though he continued to be an employee of the company in India, on the basis of the letter of Deputation. However, there is a concurrent finding by the Assessing Officer, the Appellate Authority and the Tribunal, that excluding the time during which he was visiting India, the requisite number of days, that is 60 days during the current year, the assessee was not in India and therefore, he is to be treated as non-resident and cannot be taxed as a resident under section 6(1)(c). The said finding of fact is arrived at on the basis of the material on record. The Tribunal and the Appellate Authority have relied upon a certificate issued by Warton Residential, the employer, which is dated 18-1-2008. In the certificate, it is stated that the assessee was resident of River North Park Apartments from 20th March, 2004 until 9th April, 2005 and that during the said period, he resided at 320 W, Illinois St. #801, Chicago. It is held by the Tribunal that it is a fact that the assessee was on deputation from April 2004 to January 2005 and his stay in India from 18th August, 2004 to 6th September, 2004 was in respect of a visit to India and this period is to be excluded while considering the applicability of section 6(1)(c). By holding so, the Tribunal accepted the alternative contention of the assessee and held that for the purpose of computing the period of 60 days as mentioned in section 6(1)(c), the period of visit to India would be excluded and assessment shall be done considering his status as ‘non-resident’.
7. The abovesaid finding of fact, cannot at all said to be perverse and arbitrary as it is well-founded and all the material available have been taken into consideration by the Appellate Authority and the Tribunal. Therefore, no substantial question of law arises for consideration in this appeal. Accordingly, appeal is dismissed.