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ITAT case on salary earned by the non resident outside India – Devi Dayal vs DCIT, 2024, Delhi ITAT

CA Adityavikram Banka

ITAT case on salary earned by the non resident outside India

Devi Dayal vs DCIT, 2024, Delhi ITAT (ITA Nos. 835 & 836/Del/2023)

Facts:

1. The Appellant was deputed to work in a project awarded by a client based in Vienna, Austria and was stationed in Austria. Hence, the Apellant was a Non Resident.

2. He had received salary and compensatory allowances in Vienna from the Indian company.

3. The Assessing Officer made additions pertaining to salary and compensatory allowances. The additions were upheld by the Dispute Resolution Panel.

Notes:

1. Section 5(2) of the Income Tax Act:
Income of a non resident is taxable in India if it is received or is deemed to be received in India or accrues or arises or is deemed to accrue or arise in India.

2. Section 9(1)(ii) of the Income Tax Act:
Salary income of a non resident is deemed to accrue or arise in India if it is earned in India.

3. Section 15 of the Income Tax Act:
Income is chargeable under the head ‘Salaries’ if it is due to such employee in India.

ITAT Delhi held as below:

1. During the assessment year under consideration, the Appellant had not rendered services in India and hence, had not earned any income in India.

2. On a conjoint reading of sections 5, 9 and 15 of the Act, it is very clear that the salary/allowances received by the non resident Assessee outside India were not taxable in India as services were rendered outside India.

CA Adityavikram Banka
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