The Mumbai Bench Income Tax Appellate Tribunal ( ITAT ) has held that the credit of Dutch tax paid are allowable under Section 90 of the Income Tax Act 1961.
Assessee, Ashok Madhav Rao who was an individual citizen of India and for, was on deputation to Netherlands by his employer A.Y. 2018-19 . During the year, assessee was a resident and ordinarily resident and income earned by the assessee from Netherlands was chargeable to tax in India. The assessee filed his return of income on 30th August, 2018, which was revised on 30th March, 2019. In the revised return of income assessee declared the salary received in Netherlands and claimed relief under Section 90 of the Income Tax Act, 1961 but the same was denied to the assessee as per assessment order passed under Section 143(1) of the Income Tax Act.
Section 90 is intended for granting relief with reference to any of the following relevant situations that may occur: Income on which tax has been paid both under Income Tax Act, 1961 and Income Tax prevailing in that country or definite territory.
Ketan Ved who appeared for the assessee contented that the correct tax had been paid on assessment by Dutch tax authorities. He contended that salary received by him from Netherlands was the amount of withholding tax paid by him through his employers in Netherlands.
Ujjawal Chavan SR who appeared for the revenue, contented that the assessee had submitted the certificate of his employer and without submitting any detail of the payment of taxes in Netherlands and the assessee also had not furnished proof of deduction of tax and where such tax was deducted. The assessee had merely furnished the certificate from his employer who certified that the tax liability of the assessee for A.Y 2018-2019 was paid in Netherlands.
A single Bench of Prashant Maharishi, (Accountant Member) held that the assessee was entitled to tax deduction under Section 90 of the Income Tax Act 1961, observing that “the form no.67 of furnished by the assessee also clearly shows what is the amount of salary received by him from Netherlands and what is the amount of withholding tax paid by him through his employers in Netherlands. Now the fiscal report 2017 on behalf of the assessee is also available which is also placed at page no.30 to 37 of the Paper Book.”
The Bench fallowed the appeal directing Assessing Officer to grant credit of Dutch tax paid by the assessee after proper verification and obtaining necessary information from the assessee.
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