TaxTMI 
TaxTMI 
2014 (3) TMI 537
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....m any services rendered from which he could drive any income. The return of income was filed on 30.07.2006 declaring income at Rs.47,54,087/- for Assessment Year 2006-07. Thus, for the year under consideration, the assessee was tax resident of India. The assessee claimed that he has received US $ 14,67,000 during the financial year 2005-06 in his bank accounts which was a fee received from services rendered in setting up Voyager Fund and arranging investors etc. The Assessing Officer's took the amount as US $ 1800000 from Voyager Fund Mauritius Ltd. and held that this was deemed income to accrue and arise in India as per section 9(1)(vii)(c) of Income-tax Act, 1961 and made an addition of Rs.8.10 crores to the income of the assessee. The CIT (A) confirmed the action of the Assessing Officer. 3. Now, the assessee is in appeal before us by taking the following grounds of appeal :- "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in holding that the income of Rs.8,10,00,000/- has arisen and accrued from services rendered in India and has further erred in confirming the addition of R....
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....as no evidence that services were rendered by assessee outside India and in any case, the amount was received in India and the same was chargeable to tax in India. Ld. AR further submitted that during the relevant period when the income was earned the assessee was a resident but not ordinary resident and when the assessee is not the ordinary resident then the income earned and received out side India is not chargeable to tax in India in terms of section 9(1)(vii)(c) of the Income-tax Act, 1961. Ld. AR further submitted that assessee was a not ordinary resident and the services for which the amount was received was rendered outside India. He also pleaded that the assessee has received the amount in question outside India in his bank account and which has been later on remitted to India, therefore, in no circumstances, it can be said that the amount was received in India. He further pleaded that the amount was received for services rendered abroad and was not in the nature of technical services. It was for mobilizing fund for setting up an investment fund in Mauritius and these services were rendered prior to June 2004 only, when the mutual fund was set up in Mauritius for the same a....
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....not ordinarily resident in India in any previous year if such person is an individual who has been a non-resident in India in nine out of ten previous years preceding that year or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less. The assessee has submitted a working of days for which he has stayed in India from the previous year 1995-96 to 2004-05 which has been reproduced in the paragraph 2 at page 2 of this order. It is clear from the chart that the assessee has been in India for 331 days for seven preceding years which is less than 729 days as stipulated in section 6 (6) of the Income-tax Act, 1961 for a status of not ordinarily resident. Thus, it is an established fact that the assessee status was of a "Not Ordinarily Resident" (NOR) in India during the relevant period. This fact has been also recorded by CIT (A). Once the status of the assessee is established as "not ordinarily resident" (NOR), then the next issue come for decision is whether the amount in question represented the income which accrued or arose to him in India or it is derived from business controlle....
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....s controlled in or profession setting up in India. Therefore, we hold that the assessee's case is covered by the proviso to section 5(1) of the Income-tax Act, 1961 and the income is not chargeable to tax in India. We would also like to mention that this amount was received by the assessee in his bank account maintained outside India and it has been transferred to India only after receiving the same first outside India. The contention of the revenue that it was transferred in a short period to bank account of the assessee in India would not change the basic character of the receipts in the bank account of the assessee held outside India. As held by the Hon'ble Supreme Court in the case of Keshav Mills vs. CIT - 23 ITR 230 (SC), the word "received" shows that the point of first receipt has to be seen. Hon'ble Madras High Court in the case of CIT vs. A.P. Kalyanakrishnan - 195 ITR 534 (Mad.) has held that what is contemplated u/s 5(1)(a) of the Income-tax Act, 1961 is that the amount received in India after having received in another country was not assessable in India. In the assessee's case, it is a matter of fact that the amount in question was received in various ....