ANIRUDDHA BOSE,J. - (1.) The appellants are legal heirs of the original assessee, who passed away intestate on 10th April 2013. The assessee was a marine engineer and the subject of dispute of this appeal is taxability of a substantial portion of his income earned during the previous year relevant to the assessment year 2010-11. The total sum involved is Rs.14,79,598/-, and this was earned by the appellant as salary from two concerns, Great Offshore Limited and Bibby Ship Management (Singapore) Pte. Ltd. The appellant in his return had declared total income of Rs.3,95,099/-. The aforesaid sum was added to his disclosed income in scrutiny assessment. Admitted position is that during that year, the assessee had the status of non-resident under Section 6 of the Income Tax Act, 1961. The assessee had received the said sum from his two employers in a Non-Resident (external) bank account, commonly referred to NRE account.
(2.) The appeal of the assessee against the aforesaid order failed before the Commissioner of Income Tax and the Income Tax Appellate Tribunal also sustained the finding of the Assessing Officer, rejecting contention of the assessee that the said income was exempted, having been received from outside India in foreign currency. The basic reasoning of the Revenue for including the aforesaid sum to income chargeable to tax was that the said sum was received by him in the NRE account directly from his employers and this constituted receipt of the said sum in India. Revenue's stand is that the said sum attracts Section 5(2)(a) of the Act.
(3.) We had admitted the appeal on 11th July 2017 on the following question:- "Whether on the facts and in the circumstances of the case and in law, income by way of salary which became due and has accrued to the assessee, a non-resident, for services rendered outside India and which is not chargeable to tax in India on the "due" or "accrual" basis, can be said to be chargeable to tax on the "receipt" basis merely because the foreign employers, on the instructions of the assessee, have remitted a part of amount of salary to the assessee's NRE bank account in India?" ;