ITO, Bangalore v. Shri Ivan Benn, Bangalore

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE DR. O.K. NARAYANAN VICE PRESIDENT AND SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER ITA NO.1044(BNG)/09 (ASSESSMENT YEAR : 2006-07) INCOME TAX OFFICER WARD 1(1) INTERNATIONAL TAXATION BANGALORE. VS. SHRI IVAN BENN NO.712 I B CROSS 8 TH BLOCK KORAMANGALA BANGALORE. APPELLANT. RESPONDENT. APPELLANT BY : SMT. V.S. SREELEKHA ADDL. COMMISSIO NER OF INCOME TAX. RESPONDENT BY : SHRI NARENDRA SHARMA ADVOCATE. O R D E R PER DR. O.K.NARAYANAN : THIS APPEAL IS FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2006-07. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF THE CO MMISSIONER OF INCOME TAX (APPEALS)-IV BANGALORE DT.31.8.2009 AND ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX AC T 1961. 2. THE ASSESSEE WORKING AS A MARINE ENGINEER WITH A SHIPPING COMPANY WAS A NON RESIDENT DURING THE PREVIOUS YEAR RELEVAN T TO THE ASSESSMENT YEAR UNDER APPEAL FOR THE PURPOSES OF ASSESSMENT. HE H AD RECEIVED A SALARY OF RS.12 20 832 OUTSIDE INDIA FOR SERVICES RENDERED AL SO OUTSIDE INDIA. THE SAID AMOUNT WAS BROUGHT TO INDIA AND KEPT IN HIS BANK AC COUNT. THE ASSESSING OFFICER TREATED THIS SALARY OF RS.12 20 832 AS PART OF ASSESSEES TAXABLE INCOME ITA NO.1044(BNG)/09 - 2 - OVER-RULING THE CONTENTION OF THE ASSESSEE THAT HE BEING A NON-RESIDENT AND INCOME HAVING ARISEN OUTSIDE THE TERRITORIAL JURISD ICTION OF INDIA HE WAS NOT LIABLE FOR TAX AS FAR AS THAT SALARY IS CONCERNED. IN THE FIRST APPEAL THE CONTENTION OF THE ASSESSEE WAS ACCEPTED AND THE ASS ESSING OFFICER WAS DIRECTED TO EXCLUDE THE SAID AMOUNT FROM THE COMPUTATION FOR THE TAXABLE INCOME OF THE ASSESSEE THE REVENUE IS AGGRIEVED AND THEREFORE TH E APPEAL BEFORE US. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS T HAT THE CIT(A) HAS ERRED IN HOLDING THAT THE SALARY AMOUNT WAS NOT TAXABLE IN I NDIA. 4. THIS ISSUE WAS CONSIDERED BY ITAT BANGALORE B BENCH IN THE CASE OF ITO VS. MR.PRAHLAD VIJENDRA RAO VIDE ORDER DT.26.6. 2009 PASSED IN ITA NO.1137/BANG/08. AFTER CONSIDERING THE FACTS AND A PPLICABLE LAW THE TRIBUNAL CAME TO THE CONCLUSION THAT THE SALARY INCOME OF T HE ASSESSEE COULD NOT BE HELD AS ACCRUED OR ARISEN IN INDIA UNDER SECTION 5(2)(B) OF THE INCOME TAX ACT 1961. THE TRIBUNAL ALSO RELIED ON A DECISION OF ITAT CAL CUTTA BENCH IN THE CASE OF RANJIT KUMAR BOSE VS. ITO REPORTED IN 25 TTJ 368 WH ERE AGAIN IT WAS HELD THAT UNDER SIMILAR CIRCUMSTANCES THE SALARY WOULD N OT BE TAXABLE. 5. FOLLOWING THE ABOVE ORDERS OF THE TRIBUNAL WE H OLD THAT THE SALARY AMOUNT TAXED IN THE HANDS OF THE ASSESSEE IS TO BE EXEMPTED AS THE SAID AMOUNT CANNOT BE TREATED AS ACCRUED OR ARISEN IN INDIA. T HAT IS A FOREIGN INCOME IN THE ITA NO.1044(BNG)/09 - 3 - HANDS OF NON-RESIDENT. THAT IS NOT TAXABLE IN IND IA. THE CIT(A) IS JUSTIFIED IN HIS ORDER. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THURSDAY THE 1 ST DAY OF APRIL 2010 AT BANGALORE. SD/- SD/- (SHAILENDRA KUMAR YADAV) (DR.O.K.N ARAYANAN) JUDICIAL MEMBER VICE PRESIDENT BANGALORE DT.01/04/2010. COPY TO : 1. THE ASSESSEE. 2. THE ASSESSING OFFICER. 3. CIT(APPEALS) 4. CIT 5. DEPARTMENTAL REPRESENTATIVE ITAT BANGALORE. 6. GUARD FILE ITAT BANGALORE. 7. GUARD FILE ITAT NEW DELHI. 8. * GPR BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.