2015 (6) TMI 1284 - AT - Income Tax

Residential status and counting of days: arrival day with less than full-day presence may be excluded, affecting tax residency.

Clarifies that for determination of tax residential status the day of arrival may be excluded from the computation of days in India if physical presence ... Residential status of assessee - counting of number of days available in India - dispute is with regard to the one clear day whether the assessee was present in India or he was in India for few hours - examination of fraction of day - arrival into India for less than a full day Assessee had himself claimed his status as resident in the return of income - assessee moved an application u/s 154 with the submissions that the assessee inadvertently mentioned the residential status as resident whereas he has raised the claim of exemption u/s 10 as NRI and claimed refund related to TDS on salary. HELD THAT:- In the instant case, the assessee has placed the photocopy of the passport, which is bearing the stamp of Hong Kong immigration authorities of 25/10/2008. In this stamp, time was not given but the date is available as 25/10/2008 beside the flight number AI 315. From the details of the flight, available on page 3 of the compilation, we find that the flight reaches Delhi at 9.10 P.M. Therefore, if the flight was in time, it could have reached Delhi at 9.10 P.M. from Hong Kong on 25/10/2008. Therefore, the assessee was in India on 25/10/2008 is only for less than three hours. Thus, the date 25/10/2008 cannot be treated as complete day and should be excluded while computing the number of days in India. These factors were taken into account by CIT(A) while holding the assessee to be non-resident. We, therefore, do not find any infirmity in his order and accordingly confirm the same. Appeal of the Revenue stands dismissed. Issues: Whether the assessee was a resident or a non-resident for the relevant year for income-tax purposes, and whether the CIT(A) was correct in treating the assessee as non-resident by excluding 25/10/2008 from the count of days in India.Analysis: The dispute concerned the counting of days of physical presence in India and whether a day on which the assessee arrived late in the evening after being outside India for most of that day should be treated as a whole day in India. The Tribunal examined passport immigration stamps and the flight schedule showing arrival at about 9:10 P.M., and applied the principle that fractional days of presence are to be examined (fractional day rule) when determining residential status. The available record showed the assessee was outside India for 183 clear days and that on 25/10/2008 the assessee had been outside India for the greater part of the day, with arrival into India for less than a full day, supporting exclusion of that date from the count of days in India. The Tribunal found no infirmity in the CIT(A)'s reliance on the evidence and reasoning to treat the assessee as non-resident.Conclusion: The CIT(A)'s conclusion that the assessee is a non-resident is confirmed; the Revenue's appeal is dismissed.