TaxTMI 
TaxTMI 
2013 (1) TMI 17
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....ight in law in holding that the sum of Rs.78 lakhs advanced to P.Maniammal of Maniammal Textiles Pvt. Ltd., was unexplained investment under Section 69 of the Income Tax Act, 1961 assessable as undisclosed income in the block assessment ? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is correct in law in holding that the amount of Rs.78 lakhs being the gifts by demand drafts from the appellant's mother and brothers in Singapore was taxable under Section 5(1)(a) of the Income Tax Act 1961 and Section 5(1)(c) cannot be invoked in the appellant's case to take shelter under the proviso in respect of the income accrued in Singapore in view of the status of the appellant as "Not Ordinarily Reside....
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....ut of this sum. 3. Since there was no material indicating the source of the said amount ., the Assessing Officer pointed out that the assessee had not made any substantive proof to show the source of the above funds and in the absence of any material regarding the source the amount would be treated as undisclosed income. It is seen from the assessment order that enquiries were made with the Revenue Authorities in Singapore and it was found that none of the donors had sufficient income to make the gift. Even in respect of two of the so called donors who were found to be assessed to tax, the income shown was not sufficient to make a gift of Rs.13 lakhs by each one of the donors. Thus, based on the information and in the absence of substantiv....
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....ribunal held that the assessee had failed to prove the sources of such sums and creditworthiness of the parties who had given such amounts. 5. The assessee took an alternative contention before the Tribunal that the amounts were not taxable in India by reason of proviso to Section 5(1)(c). Since the assessee's status in India is one of "Not Ordinarily Resident" the Tribunal pointed out that the proviso could be applied only if the assessee is able to prove that being "Not Ordinarily Resident" in India, such income had accrued or arisen outside the country and it is not an income earned in India. In the absence of any proof that the said amount was the income earned outside India, the Tribunal confirmed the order of the Assessing Officer. ....
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....ndia. 8. There is no denial of the fact that the assessee's status is of a person "Not Ordinarily Resident" in India. While in the case of a resident, income that accrues to him outside India during such year is included in the total income, in the case of a person "Not Ordinarily Resident" in India within the meaning of sub-section (6) of section 6, if the income accruing or arising to the assessee outside India is an income derived from a business or a profession set up in India, then the same shall stand included as his total income. In other words, in respect of the business/profession set up in India, if there is no income arising/accruing to the assessee outside India, there could be no inclusion of the same in his total income. The ....