Salary from a foreign employer for services rendered outside India is not taxable if the assessee has stayed outside India for more than 182 days

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH : SMC-1 : NEW DELHI
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER

ITA No.9232/Del/2019
Assessment Year: 2011-12

Ashish Bhardwaj,
Ch. No.206-207, Ansal Satyam,
RDC Rajnagar,
Ghaziabad.
PAN: AMWPB4194J
(Appellant) 

Vs 

ITO,
Ward-36(4),
New Delhi.
(Respondent)

Assessee by : Shri Akhilesh Kumar, CA
Revenue by : Ms Rano Mukherjee, Sr. DR

Date of Hearing : 17.03.2021
Date of Pronouncement : 14.06.2021

ORDER

This appeal filed by the assessee is directed against the order dated 27th September, 2019 of the CIT(A)-2, New Delhi, relating to assessment year 2011-12.

2. Facts of the case, in brief, are that information was available on record that the assessee had purchased an immovable property amounting to Rs.49,97,152/- during the financial year 2010-11 relevant to A.Y. 2011-12. The AO, therefore, after recording the reasons, reopened the assessment u/s 147 of the Act and notice u/s 148 was issued on 31.03.2018. In response to the same, the assessee filed his return of income on 5th October, 2018 declaring the total income at Rs.2,910/-. The assessee declared interest income only in the status of NRI. During the assessment proceedings, the AO noted that the assessee is maintaining a bank account with HDFC Bank, C-9/4, Ground Floor, Back Portion, Model Town-3, Delhi – 110 009 wherein salary amounting to Rs.19,25,067/- has been credited being salary from foreign enterprises i.e., ANGLO Eastern Ship Management Ltd., 23RD Floor, CEF Life Tower, 248, Queen’s Road East, Wanchai, Hong Kong. On being questioned by the AO, it was submitted that the assessee has NRI status during the period under consideration and, during the year, the assessee had stayed outside India for more than 187 days and, therefore, is not liable to tax on the salary income earned abroad from a foreign employer. However, the AO was not satisfied with the arguments advanced by the assessee. He referred to the provisions of section 6 of the IT Act and held that the assessee was resident in India and salary income earned by him was taxable in India. He also referred to the definition of non-resident u/s 2(30) of the IT Act and noted that the assessee had spent more than 60 days in India and fulfilled the conditions envisaged under Clause (c) of section 6(1) of the IT Act, 1961. He rejected the explanation of the assessee that his income was not taxable in India by virtue of clause (a) of section 6(1). Rejecting the various explanations, the AO made addition of Rs.19,25,067/- under the head ‘Income from salary.’

2.1 Further, the AO noted that an amount of Rs.3,50,000/- has been spent towards the stamp duty for purchase of the property. On being questioned by the AO, it was explained that an amount of Rs.3,66,700/- was debited by M/s Landcraft Developers Pvt. Ltd., against purchase of stamp papers. However, in absence of any satisfactory explanation given by the assessee, the AO made addition of Rs.3,50,000/- as unexplained investment u/s 69A of the IT Act. The AO accordingly determined the total income of the assessee at Rs.22,77,980/-. 

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