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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the appellant was a person resident outside India during the relevant period and, if so, whether the charge of contravention of section 8(1) of the Foreign Exchange Regulation Act, 1973 was sustainable.
Analysis: The evidence showed continued business activity outside India, including establishment and operation of business concerns in the USA and Hongkong, residence and business facilities in the USA, and documentary material indicating no return to India for good. The existence of foreign business operations and the nature of the remittance supported the conclusion that the appellant continued to carry on business abroad. On that footing, the finding that the appellant had become a person resident in India during the relevant period was not justified.
Conclusion: The appellant was held to remain a person resident outside India during the relevant time, and the alleged contravention of section 8(1) was held to be untenable.
Final Conclusion: The penalty order was set aside and the appeal succeeded, with consequential relief directed in respect of the pre-deposit and passport.
Ratio Decidendi: For the purposes of foreign exchange regulation, a person is not treated as resident in India where the record shows continued foreign business activity and no intention to return to India for good.
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