Taxontips
No Result
View All Result
Thursday, November 30, 2023
Login/ Register
  • Home
  • Income Tax
    • Income Tax Return
    • Tax Notice/ Personal consultation
    • Compliance Notice
    • Faceless Assessment
  • GST
    • GST Registration
    • GST Consultation
  • News
    • Income Tax News
    • GST news
    • Budget News
    • Business & Other News
  • Q & A
  • About us
  • Contact us
Talk to an Expert
  • Home
  • Income Tax
    • Income Tax Return
    • Tax Notice/ Personal consultation
    • Compliance Notice
    • Faceless Assessment
  • GST
    • GST Registration
    • GST Consultation
  • News
    • Income Tax News
    • GST news
    • Budget News
    • Business & Other News
  • Q & A
  • About us
  • Contact us
No Result
View All Result
Taxontips
No Result
View All Result

Rent earned from property situated outside India by assessee resident in India cannot be taxed in India – Delhi ITAT

Income tax Expert by Income tax Expert
July 25, 2022
in Case Laws, Income Tax News
0
Income tax Appellate Tribunal (ITAT) to not function from 17.03.2020 to 27.03.2020
119
SHARES
1.5k
VIEWS
image_pdfPDFimage_printPrint

The above judgement has been passed by Hon’ble Delhi ITAT in case of Natasha Chopra Vs. DCIT, Circle-17(2), New Delhi ITA No. 6121/Del/2018.

 

Facts of the case:

Assessee is a Director in N&N Chopra Consultants Private limited and has derived salary and rental income from this company

Apart from the Indian Income, the assessee had also earned income from house property situated in Australia and United Kingdom. However, it had shown such foreign Income as not taxable in India

 

Assessee’s contention:

The assessee is a tax resident of India received rental income from the properties outside India held by her in England and Australia and declared the rental income received by her in her return of income filed in Australia and United Kingdom.

Since the income has already been offered to tax in UK and Australia and as per DTAA income cannot be taxed in India again.

 

Revenue’s contention:

The Assessing Officer contended that the amount of the rental income to tax notwithstanding the fact that the assessee has declared rental income from properties situated in England and Australia.

AO relied on the Article 6(1) of DTAA with UK which reads “income from immovable property may be taxed in contracting state in which such property situated”. The AO referred to the Notification No. 91/2008 dated 28.08.2008 and construed the words “may be taxed” as “shall be taxed” and hence assessed that such rent “should only be” charged to tax in India only.

 

Ruling: 

Thus, we find that in the absence of an express provision, the right of the resident country to tax its residents cannot be taken away under the DTAA. Therefore, the expression “may be taxed” cannot be construed to mean “shall be taxable only in the resident state”, unless it is expressly stated. Provisions of Section 90(1)(a)(i) is clearly applicable to the facts of the case.

In the result, both the appeals of the assessee are allowed.

 

Author’s comments on the judgement:

In our humble opinion and with due respect to Hon’ble ITAT we believe that as per the Income Tax Act of India, the resident country has full right to tax the global income of a tax resident, after taking into consideration relevant article of DTAA i.e. Article 6.

 

The judgement/ ruling passed in the above case is incomprehensible as no clear guidance has been provided as to why the Income cannot be taxed in resident country and why appeal of the assessee is allowed.

 

Hon’ble ITAT has mentioned that the word “may” cannot be considered as “shall”, and hence passed on a judgement that if tax has been paid in foreign country no tax needs to be paid in resident country which in our humble opinion is not a correct interpretation of DTAA. Also, the word “may” in any DTAA gives right to both the country to tax the income in their respective country and not just one country and the correct interpretation would be to ask assessee to tax the income in India and allow her the credit of tax paid in foreign country in India, if available.

 

The notification referred to above i.e. Notification No. 91/2008 does not states that the word “may” should be considered as “shall” rather it states that for the purpose of DTAA where the word “may” is used such income “shall be taxed in India” and necessary relief shall be granted and it nowhere states that the income shall be only taxed in India.

 

Hence, in our humble opinion the judgement passed should not be used as a precedent for claiming exemption of any foreign income by tax resident in India if no specific relief is available in Income tax Act or DTAA.

 

Section Article 6 and section 90
DTAA/Country India- UK and Australia
Court ITAT-Delhi
Date of Decision 30.06.2022

 

To download the judgement CLICK ME.

 

Article authored by:

 

 

 

 

 

CA Naman Maloo (C.A., B.Com)
He is currently working as Partner – Direct Tax with a renowned firm in Jaipur having experience in dealing Assessments, Tax Audit, International Taxation, Tax planning for NRI, Business planning and consultation.
E-mail: naman.maloo@jainshrimal.in | LinkedIn: Naman Maloo

 

Disclaimer: The views presented in the above article are personal views of the author and has no legal binding. For any legal opinion consult a tax professional.

 

Connect with us on: LinkedIn, Telegram, Instagram, Facebook, Twitter and Youtube for regular Updates.

image_pdfPDFimage_printPrint
Tags: income tax case lawIncome tax updatesITAT judgementlatest income tax case lawtaxontips
Previous Post

Simplified regulatory framework for e-commerce exports of jewellery through courier mode

Next Post

Time limit for verification of ITR reduced from within 120 days to 30 days of filing of ITR electronically

Related Posts

Due date for Tax audit for A.Y. 2019-20 extended from 30th September to 31st October
Income Tax News

What is discard return? How to discard Income tax return? FAQ on discard return

November 29, 2023
CBDT issues circular for detailed explanation on TDS deduction u/s 192 of the Income tax act
Income Tax News

Inoperative PAN resulting in TDS notice to deduct TDS at the rate of 20%. Here’s why?

November 16, 2023
Calculation sheet for comparison of tax payable under new and old tax regime for individual and HUF – 115BAC
Income Tax News

Comparison between Section 115BAC before and after AY 2024-25

November 15, 2023 - Updated on November 16, 2023
Tax rate of domestic companies slashed/ reduced to 15% and 22% – What’s the truth? – A Summary
Income Tax News

Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 10-IC for Assessment Year 2021-22

November 7, 2023
GST registration
Income Tax News

GST revenue collection for October 2023 is second highest ever, next only to April 2023, at ₹1.72 lakh crore

November 6, 2023
Guidelines for manual selection of returns for Complete Scrutiny during the financial-year 2019-20-
Income Tax News

ITR V showing invalid due to non-verification for income tax return filed by audited entities [AY 2023-24]

November 2, 2023
Next Post
Who can sign/ e verify your Income tax return?

Time limit for verification of ITR reduced from within 120 days to 30 days of filing of ITR electronically

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Google Custom search

Recent Posts

  • Advisory for the procedures and provisions related to the amnesty for taxpayers who missed the appeal filing deadline
  • What is discard return? How to discard Income tax return? FAQ on discard return
  • CGST Delhi East busts a syndicate of 48 fake firms availing fraudulent ITC of over ₹199 crores in “Operation Clean Sweep”, 3 arrested
  • ITC reversal on account of Rule 37(A) by the recipient
  • Inoperative PAN resulting in TDS notice to deduct TDS at the rate of 20%. Here’s why?

Recent Comments

  • Srinivasan Venkatasubramanian Venkatasubramanian on GST turnover limit for services increased to Rs. 40 lakh by CBIC?
  • Notification under PMLA by Ministry of Finance which could affect CA, CS and CMA - Taxontips on CA, CS and CMA now under PMLA. KYC of clients required
  • ITR 4 is now available on e-filing website for FY 2022-23 i.e. AY 2023-24 | File ITR with experts on Taxontips – Taxontips on Businessman with turnover below 1 crore and having profit below 8% need to compulsorily get books of accounts audited: Let’s find out
  • Can a person earning income from speculative business transaction file return u/s 44AD of Income tax act - Taxontips on How to calculate turnover in case of intra day and future and option trading for Income Tax purpose?
  • Extension of last date for updation of Member’s Profile with GSTIN at Self Service Portal – Till 23rd April, 2023 - Taxontips on Updation of Member’s Profile at Self Service Portal with GSTIN to get GST credit till 15.04.2023

Categories

  • Budget News
  • Business & Other News
  • Case Laws
  • GST news
  • Income Tax News
  • News

Browse Topics by Date

November 2023
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930  
« Oct    
  • GSTR 9/ 9C extended : AGAIN

    GSTR 9/ 9C due date to be extended to 31.10.2020 | E-invoicing will be voluntary in the beginning

    6458 shares
    Share 2583 Tweet 1615
  • How to pay Membership and COP fees of ICAI for 2020-21 |

    6358 shares
    Share 2543 Tweet 1590
  • Code/ Nature of payment 6CR updated by NSDL in challan 281 for paying TCS on sale of goods

    5753 shares
    Share 2301 Tweet 1438
  • Are all the due dates of tax audit and Income tax return for FY 2019-20 extended to 31.03.2021 by the bill presented in Lok sabha Dt. 18.09.2020

    4772 shares
    Share 1909 Tweet 1193
  • SFT transaction mentioned in Form 26AS | What does it mean? | Who reports it? | SFT codes transaction type

    4000 shares
    Share 1600 Tweet 1000

Recent Notification

Data of GST website under comparison of liability declared and ITC claimed tab not available

Advisory for the procedures and provisions related to the amnesty for taxpayers who missed the appeal filing deadline

November 30, 2023
Due date for Tax audit for A.Y. 2019-20 extended from 30th September to 31st October

What is discard return? How to discard Income tax return? FAQ on discard return

November 29, 2023

RSS Taxontips

  • Advisory for the procedures and provisions related to the amnesty for taxpayers who missed the appeal filing deadline
  • What is discard return? How to discard Income tax return? FAQ on discard return
  • CGST Delhi East busts a syndicate of 48 fake firms availing fraudulent ITC of over ₹199 crores in “Operation Clean Sweep”, 3 arrested
  • ITC reversal on account of Rule 37(A) by the recipient
  • Inoperative PAN resulting in TDS notice to deduct TDS at the rate of 20%. Here’s why?
  • Comparison between Section 115BAC before and after AY 2024-25
  • Advisory for the procedures and provisions related to the amnesty for taxpayers for filing appeal under GST
  • Statutory Compliance Calendar for November 2023 | Income tax, GST and various other laws
  • Advisory for Pilot Project of Biometric-Based Aadhaar Authentication and Document Verification for GST Registration
  • Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 10-IC for Assessment Year 2021-22

Categories

  • Budget News
  • Business & Other News
  • Case Laws
  • GST news
  • Income Tax News
  • News

Site menu

  • Home
  • Income Tax
    • Income Tax Return
    • Tax Notice/ Personal consultation
    • Compliance Notice
    • Faceless Assessment
  • GST
    • GST Registration
    • GST Consultation
  • News
    • Income Tax News
    • GST news
    • Budget News
    • Business & Other News
  • Q & A
  • About us
  • Contact us
Taxontips

TaxOnTips provides you all tax related solutions in easy way and update you with its regular updates & notifications Visit us for details.
We are based in Jaipur, India

© 2019-2023 Taxontips.com - Tax assistance at your Fingertips

No Result
View All Result
  • Login/Signup
  • Income Tax
    • Income Tax Return
    • Tax Notice/ Personal consultation
    • Compliance Notice
    • Faceless Assessment
  • GST
    • GST registration
    • GST Consultation
  • News
    • Income Tax News
    • GST news
    • Budget News
    • Business & Other News
  • About us
  • Contact us
  • Ask an expert/ Talk to an expert
  • Q & A
  • Privacy Policy
  • Terms of use

© 2019-2023 Taxontips.com - Tax assistance at your Fingertips

Book Phone consultation with expert

Sitting home or at your office and don't have time to visit CA's office or don't know where to consult CA. Book your consultation with an expert practicing Chartered Accountant and get your query solved.

Book a phone consultation for 30 minutes with our expert at a very basic cost.

Book consultation

No thanks, I'm not interested!