TaxTMI 
TaxTMI 
2007 (4) TMI 393
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....cals formulations. He filed a return for the assessment year under consideration declaring income of Rs. 7,77,000. In the return, the assessee claimed that the status was that of a resident. In respect of the interest income of Rs. 3,07,328, he claimed exemption under section 10(15)(fa) of the I.T. Act. The interest arose from a fixed deposit in foreign currency. While completing the assessment, the Assessing Officer rejected the claim for exemption on the following grounds : (a)The assessee has claimed the status of resident, whereas the exemption is available only to an assessee who is a non-resident or "not ordinarily resident". (b)The fixed deposit in the bank was in Indian rupees and not in foreign currency. 3. The assessee appealed....
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....appeal. Section 6(6)(a) of the I.T. Act is as under : (6) A person is said to be "not ordinarily resident" in India in any previous year if such person is-- (a )an individual who has not been resident in India in nine out of the ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more; or (b)a Hindu undivided family whose manager has not been resident in India in nine out of ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more". 6. The word "re....
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....lso by the Authority for Advance Ruling AAR No. P5 of 1995, In re [1997] 223 ITR 379 . No doubt, a contrary view has been expressed by the Gujarat High Court in Pradip J. Mehta v. CIT [2002] 256 ITR 647. However, the view propounded in the other judg-ments cited above has held the field for a very long time commencing from the Indian Income-tax Act, 1922 and is also in conformity with the speech of the Finance Member in the Central Legislative Assembly while introducing the relevant amendment Bill and has further been adopted by a circular dated 15-12-1962 by the CBDT. The circular is as under : "CIT, WB's Circular letter No. J/28320/4A/10/5/58-59, dated the 5th December, 1962, addressed to the Secretary, Indian Chamber of Commerce, Calcut....
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....ssible are-- (1)An individual is resident and ordinarily resident in any previous year only if-- (a)He has been a "resident" [as per section 6(1)] in nine out of ten previous years preceding that year; and (b)He has been in India for period or periods amounting in all to 730 days or more during the seven years preceding that year. (2)An individual, though resident, is "not ordinarily resident" in any previous year-- (a)Either where he has not been resident, i.e., has been a non-resident in nine out of ten previous years preceding that previous year; (b)Or where he has not been in India (i.e., has been absent from India) for 730 days or more during the seven previous years preceding that year. It will be seen that, if we apply the fir....
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....ue the definition as providing that a person will become resident and ordinarily resident only if (a) he has been "resident" in nine out of the ten preceding previous years, and (b) has been in India for at least 730 days in the seven preceding previous years and that he will be treated as resident but not ordinarily resident if either of these conditions is not fulfilled. The applicant is, therefore, right when he says that he will be having the status of a resident but not ordinarily resident for the assessment years 1996-97 to 2004-05. It is on this assumption that his questions have to be answered and the answers are restricted to the assessment years in respect of which he will be a resident but not ordinarily resident mentioned above.....
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....n is satisfied. As per the details given by the CIT (Appeals) the seven years' period will be the FYs 1993-94 to 1999-2000 and during these years the assessee was physically present in India for a period aggregating to 1486 days. However, since the assessee has fulfilled only one of the two conditions for being "resident and ordinarily resident", he becomes "resident but not ordinarily resident" within the meaning of section 6(6)(a ) of the I.T. Act. 11. The above section has been amended by the Finance Act, 2003, with effect from 1-4-2004 on the lines of the view expressed by the Gujarat High Court in Pradip J. Mehta's case (supra). The department's circular No. 7 of 2003 which explains the new section says that the amendment was made in ....