Section 115H relief denied where foreign earnings were converted into rupees and invested after residential status changed.

Foreign earnings converted into Indian rupees and invested in fixed deposits after an assessee becomes resident do not retain the character of assets brought from abroad for section 115H relief. On the admitted facts, once the required declaration was filed on becoming resident, the deposit and interest earned on it could not qualify for the statutory benefit intended for foreign assets. The benefit under section 115H was therefore denied, and the legal position was resolved against the assessee.

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Issues: Whether an assessee who had earlier been a non-resident, became a resident, and had invested foreign earnings in fixed deposits was entitled to the benefit under section 115H of the Income-tax Act, 1961.

Analysis: The Court noted that the assessee had brought foreign exchange into India, invested it in a bank fixed deposit, converted it into Indian rupees, and earned interest thereon. On the admitted facts, once the assessee filed the declaration required on becoming a resident, the amount invested in fixed deposit could not continue to be treated as an asset brought from abroad for the purpose of claiming the statutory benefit. The Tribunal was therefore right in holding that the assessee was not entitled to the relief claimed.

Conclusion: The assessee was not entitled to the benefit under section 115H of the Income-tax Act, 1961, and the question of law was answered against the assessee.

Ratio Decidendi: Where foreign earnings have been converted into Indian currency and invested after the assessee becomes a resident, the statutory benefit intended for assets brought from abroad cannot be claimed.

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