TaxTMI 
TaxTMI 
2014 (4) TMI 739
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....taking the status of the appellant as "Resident" during the year as against the status of non resident claimed in the return accepted by the Department consistently year after year since 1985. That during the year under consideration the appellant's stay in India exceeded 182 days as his passport was illegally seized by the CBI and he was compelled to stay in India for reasons beyond his control and accordingly the doctrine of impossibility of performance is application. 3. Whether while deleting the addition of Rs.17,94,15,000/- being share capital of Universal Business Solutions Mauritius in Claridges Pvt. Ltd., the Ld CIT(A) can direct the Assessing Officer to pursue the reference made to the Govt. of Mauritius and to make fresh reference to the Govt. of Jersey and British Virgin Island to arrive at real facts regarding flor of funds among various entities abroad. 4. Whether the Ld CIT(A) is justified in sustaining on protective basis addition of Rs.16,98,38,020/- being share capital subscribed by Palm Technologies Ltd. Mauritius in Claridges SEZ (P) Ltd. by observing / directing the Assessing Officer to ascertain the real facts by pursuing the reference made to the....
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....ppeal before or at the time of hearing of the appeal. Assessment year: 2008-09: (Assessee's appeal): 1. That the order of the Ld CIT(A), New Delhi dated 22.5.2013 is bad in law and in facts. 2. That on the facts and in the circumstances of the case the Ld CIT(A) has erred in upholding the action the Assessing Officer in taking the status of the appellant as "Resident" during the year as against the status of non resident claimed in the return accepted by the Department consistently year after year since 1985. 2.1. That during the year under consideration the appellant's stay in India exceeded 182 days as his passport was illegally seized by the CBI and he was compelled to stay in India for reasons beyond his control and accordingly the doctrine of impossibility of performance is application. 3. Whether while deleting the addition of Rs. 3,96,87,500/- being share capital of Universal Business Solutions Mauritius in Claridges Pvt. Ltd., the Ld CIT(A) can direct the Assessing Officer to pursue the reference made to the Govt. of Mauritius and to make fresh reference to the Govt. of Jersey and British Virgin Island to arrive at real facts regarding flow of funds a....
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....gies Ltd. Mauritius and the various intermediately companies created for this. 4. On the facts and circumstances of the case the Ld CIT(A) has erred in law in adjudicating the issues involved with certain directions and upheld the addition made by Assessing Officer on protective basis which is beyond the powers of CIT(A) as section 251(1)(a) of the IT Act empowers CIT(A) only to confirm reduce enhance or annul the issues involved in appeal. 5. On the facts and circumstances of the case the Ld CIT(A) has erred in deleting the addition of Rs.1,20,73,114/- made by the Assessing Officer on account of unexplained jewellery found from possession of his wife without appreciating the fact that Smt. Renu Nanda did not have an independent source of income and the source of payment was only Shri Suresh Nanda. 6. The appellant craves leave to add, amend any all the grounds of appeal before or during the course of hearing of the appeal. Assessment year : 2008-09 (Revenue's appeal): 1. The order of Ld CIT(A) is not correct in law and facts. 2. On the facts and circumstances of the case the Ld CIT(A) has erred in deleting the addition of Rs.3,96,87,500/- made by the Assessin....
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....ssport was illegally impounded by govt. agencies and he was unable to travel from India. Assessee submitted that he remained as non resident as he was forced to become resident because of illegal impounding of his Passport. The Ld CIT(A) after going through the submissions of assessee confirmed the order of AO on this issue and held him to be a resident as per literal meaning of the provisions of the Act. He, however, partly deleted the additions made by the Assessing Officer on merits and further upheld certain additions to be added on protective basis. Various grounds of appeals of assessee has been dealt by Ld CIT(A) as under:- a) Regarding Residential status: "5.3 1 have considered the facts and the submissions made. The Hon'ble lTAT, Delhi, in appellant's own case, in ITA Nos.1428, 1429 & 1430/Del/2012 (for A Ys 2001-02, 2002-03 and 2003-04, respectively), have ruled in favour of the appellant and held him to be 'non-resident vide Para-8 of its order dated 24.07.2012. Detailed reasons have been given by the lTAT. Accordingly, and respectfully following the order of Hon'ble ITAT, I have held the appellant to be 'non-resident' for A.Ys 2004-05, 2005....
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.... investments into India, and (c) whether such investments can be taxed in the hands of the appellant or the entities wherein the investments have been brought in. The undisputed facts are that UBS (Universal Business Solutions) is an entity duly incorporated under the law in Mauritius. The said UBS has invested in Claridges Hotels P Ltd. as foreign direct investment (FDI) under the automatic route permissible by the Government of India for the hospitality industry. It has taken all necessary approvals and complied with all new rules and regulations prescribed by the Government in this regard. There is no evidence on record that it has not done so. The ownership of UBSM is known, from the response received from the Govt. of Mauritius, from the additional evidence filed by the appellant, and from the seized documents itself. 20% ownership of UBSM is held by Infotec Services Ltd., a company incorporated in Jersey, wherein the appellant is undisputedly a shareholder. Remaining 80% equity is held by two companies incorporated in the Brit'sh Virgin Islands, which are under the control of one Mr. Hugh Hamilton. equity base of UBSM is USD 2 million. The equity of Infotec invested in UB....
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....3,000,000 and from Y2K SIL (another company in which the appellant holds interest) of USD 431,197. Thus, unlike in the case of UBSM (in Para-6 above), in the present instance there is a backward link between funds transferred from PTL to Claridges SEZ, which have been sourced from entities under the control of the appellant (UBSS & 1SL). However, the moot question is whether money sourced from UBSS and lSL even though the appellant has interest / controlling interest in those companies, can be treated as income of the appellant? I find that, on present facts, it cannot be so held unless there is evidence to indicate that the resources and incomes of these two entities are nothing but incomes accrued or arising to the appellant. It is undisputed, having been mentioned in the assessment order, that UBSS had substantial resources and incomes generated through its activities as reflected in its accounts. There is no evidence yet to establish that money brought into Claridges SEZ as FDI by UBSS was directly attributable to the personal income / assets of appellant. But, as mentioned earlier, unlike in the instance discussed in the previous ground of appeal in this instance the funds did....
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....business of the appellant abroad and in India and the availability of anytime anywhere banking 1 ATM facilities. The AO has been fair in treating Rs..13,35,000/- as explained. The addition is sustained u/s 69 A. There is no merit in this ground of appeal and is, accordingly, dismissed. e) Regarding Investment made on account of renovation of Sonali Farms from assessee's Overseas Bank Accounts. 4. The submissions filed on behalf of the appellant in this regard are as under:- ''The Assessing Officer made an addition of Rs.28,47,533/- being investment made in Sonali Farms from overseas bank account. According to the Assessing Officer the appellant is a resident of India and the payments made from abroad in favour of consultants for construction of Sonali F'arms have to be added as unexplained investment since the details of valuation, bank account from which these payments have been made have not been furnished. It is respectfully submitted that the assessee is a non-resident. The payments made from abroad have been sourced out of the Bank account, Singapore and the said fact was placed before the Assessing Officer. The AO has made the addition in pursuance of....
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.... of appeal is devoid of any merit and is, therefore, dismissed. The addition is sustained as unexplained credits I deposits / expenditure in the bank account of the appellant and also his income not disclosed in his tax returns chargeable to tax u/ss 68 or 69 or 69A or 69C, as may be applicable. g) Regarding unexplained cash found during search on 28.2.2007. 11. The ninth ground of appeal (renumbered) is against addition of Rs..23,66, 190/- as unexplained cash found during the course of income-tax search u/s 132 on 28.02.2007. The submission of appellant is reproduced in Para-8.l above. Facts are that from the residence of the appellant and his wife, and two bank lockers held by him/wife/son, total cash amounting to Rs..45,47,800/- was found out of which Rs..32,71,300/- was seized. During assessment, appellant claimed total bank withdrawals of Rs...60,45,610/-. The AO held that explained cash, in view of personal expenses estimated at Rs..1.50,000/- per month and cash of Rs...20,64,OOO/- found earlier on 10.10.2006 in the CBI search, was Rs..38,64,000/- and the balance cash of Rs..23,66,l90/­remained unexplained. He, therefore, made an addition of Rs..23.66,190/- as unexp....
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....en credit for taxes paid on income accruing or arising outside India in terms of the Double Taxation Avoidance Agreement / Treaty with the respective countries. In these circumstance and legal position of the matter, the status of the appellant is held as 'resident for every A Y wherein he has stayed in India for 182 day or more, including the current A.Y. (as 1 have already held in appellant's own case for A.Y. 2007-08 in Appeal NO.82/11-12 vide order dated 18.3.2013). i) Regarding addition in the hands of assessee on account of investment made by Universal Business Solution in Claridges Hotels (P) Ltd. 6.3 I have considered the assessment order, submissions made and the records relevant to the matter in issue here. In fact there are several aspects of the matter (a) whether income accrued or arose to the appellant in India which was not disclosed by him for tax purposes, (b) whether such income was received by him abroad and routed as investments into India and (c) whether such investments can be taxed in the hands of the appellant or the entities wherein the investments have been brought in. The undisputed facts are that UBSM (Universal Business Solutions) is an en....
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....Palm Technologies into Claridges SEZ. 7.5 I have considered the assessment order and reports of the Revenue, various documents and the submissions made on behalf of the appellant. The undisputed facts arc that investment as share capital has been brought into Claridges SEZ by Palm Technologies Limited (PTL), a company duly registered in Mauritius. The ownership of PTL is known, from the response received from the Govt. of Mauritius, from the evidence filed by the appellant, and from the seized documents itself. The appellant is not a shareholder in PTL, which is owned by one Mr. LA. Haltlland. The appellant is, however, 99% shareholder / owner of Universal Business Solutions FZC (UBSS), an entity duly incorporated under the law in Sharjah. Dividend declared by USSS, and payable to the appellant, was invested in Infotec Services Ltd. (ISL), Channel Islands, and Mideast Consortium, SA (MCSA), British Virgin Islands, at the instruction of appellant. Appellant has controlling interest in ISL. The equity base of PTL is USD 1001 only. The investment of PTL in Claridges SEZ is seen to be emanating & from loan / borrowings from UBSS of USD 3,000,000 and from Y2K SIL (another company in ....
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....ve considered the matter in detail. This decision is in consonance with the decision of Hon'bIe ITAT as above. The addition is sustained on protective basis as unexplained investments u/s 69 in the hands of the appellant. k) Regarding foreign remittance. 8. The sixth ground of appeal is against addition of Rs..8,45,288/- being unexplained receipt of GRP 10,000 in appellant's bank account. I am unable to find any explanation / justification with regard to this ground of appeal in the submissions made before me. Accordingly, this addition made by the revenue is confirmed. l) Regarding jewellery found in possession of his wife. "I have considered the assessment order the submissions made and appeal order dated 30.5.2011 in the case of Smt. Renu nanda in Appeal No. 423/09-10 for A.Y. 2007-08. The same addition was under consideration in that order, wherein it was held by the CIT(A) that the jewellery found during search was less than the jewellery disclosed in various wealth tax returns of the appellant, his wife, son and daughter in law. As the same jewelleries were held to be explained in the case of appellant's wife and for good reasons, I do not find any cau....
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....ounded on account of unfounded and wild suspicion of receiving commission to assessee in Barak missiles case. These unfounded allegations no longer exist because the CBI has already filed a closure report stating lack of evidence to press any alleged charges in FIR. It is submitted that entire basis for impounding of passport was illegal from beginning to end and assessee was thus forced to stay in India against his will for more than 182 days in these years due to illegal action of CBI. It was argued that in these circumstances the period of forced stay cannot be used for determination of assessee's residential status under income tax, as the stay in India was under compulsion and not voluntarily; it was against his wishes and for reasons beyond his control. 7. Ld counsel to explain his case cited an example that suppose Mr. Bill Gates, who earns world wide income, visits India and due to some violation of law is held in India and his stay exceeds 182 days, as his passport is impounded. He challenges the impounding in court of law. The issue of impounding of passport take 2-3 years to be decided finally by Supreme court declaring the impounding of passport to be illegal. In....
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.... 2001-02, 2002-03 & 2004-05 has held the status of assessee as non resident on the basis of number of days stay in India on a totally different issue and facts. In this respect our attention was invited to paper book pages 857 to 905. 10. The Ld DR interrupted at this juncture and invited our attention to the Tribunal order cited by Ld AR and submitted that the Tribunal has held the assessee as non resident on the basis of number of days of his stay in India. Therefore this Tribunal judgment is against the assessee by drawing our attention to relevant paper book pages where the relevant provisions are reproduced. 11. The Ld AR resuming the arguments contends that in those years the issue of stay is on altogether different footing, In earlier years the pertinent issue was as to whether the provisions of section 6(1)(c) were applicable or provisions of section 6(1)(c) along with explanation (b) to the assessee's case. Highlighting the difference between section 6(1)(c) as read individually and as read with Explanation (b) it was submitted that period of stay ordinarily is sixty days in the case of all individuals whereas in the case of citizens of India or for a person of I....
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....preme Court may not have accepted such concession unless it was within the four corners of law. Thus the stay as envisaged in the Income Tax Act by a harmonious interpretation and applying the concept of reading down of legal provisions, means stay without force. 3. CIT v. J.H. Gotla 156 ITR 323 (SC) for the proposition that if result of plain reading of a section of an Act is absurd and not be intended then construction that results in equity rather than injustice is to be preferred. In assessee's case this interpretation is leading to a totally absurd and unintended result. 4. K.P. Verghese v. ITO & Anothers 131 ITR 597 (SC) with the proposition that if the literal construction leads to manifestly and unreasonable and absurd consequences then though the suggested construction cannot alter the meaning of statutory provision but it can certainly help to fix its meaning. In this respect it was also submitted that it is a well recognized rule of construction that a statutory provision must be so construed so that absurdly and mischief is best avoided. 5. C.W.S. (India) Ltd. Etc. v. CIT 208 ITR 649 (SC) for the proposition that if literal approach leads to results absurd ....
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....eliance is placed on the doctrine of Force Majeure which refers to events beyond the control of parties inhabiting them to fulfill their duties and obligations under the agreement. In this respect counsel relied upon the case law of Global Steel Philippines v. STC of India decided by the Hon'ble High Court in I.T.A. No.4615 & 5316/2009 and the decision of Hon'ble Apex Court in the case of State of Tamilnadu v. NK Kandaswamy 26 SCC 191 with the proposition that in interpreting the provision where a construction which would defeat its purpose and obliterate it from the statute book should be excluded. 14. The Ld AR also relied upon rule of beneficial interpretation of legal provisions as an aid of construction in case of doubt and unintended consequences. This rule propounds that in case of varying results flowing from statutory interpretation, benefit of doubt in a taxing statute should always be given to the tax payer. 15. The Ld AR invited our attention to the legal opinions sought by the assessee from of Justice VN Khare, Former Chief Justice of India and Shri S.R Wadhwa an eminent Income tax consultant. After independent examination of the assessee's case they ....
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....er for further verification and in case the ground of residential status is decided in favour than all other grounds of appeal become in fructuous as the additions were made holding the assessee to be a resident in India. Without prejudice to other arguments it was argued that Ld CIT(A) even otherwise deleted the additions by holding that the moneys did not belong to assessee. 19. The Ld AR also argued that as a legal course of appeal proceedings, once ld CIT(A) held that incomes did not belong to assessee there is no justification to retain additions on protective basis as it amounts to self contradictory findings. It is contended that assessee has been put to undue harassment by the income tax department in proceeding against him in a vindictive and arbitrary manner, causing severe hardships and sufferings. In this situation suitable cost may be awarded against department by ITAT by using its powers in this behalf. 20. The Ld DR, on the other hand, in reply to assesses contentions on ground No.2 submitted that Ld CIT(A) while deciding the appeals has considered all these arguments and contentions and dealt with them in details. ITAT in assessee's own case has while inte....
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....ident in India. It is submitted that having stayed for more than 180 days in these years, the Ld AR fails to appreciate the fundamental principle of interpretation whereby a taxing statue is to be strictly construed and is very clear that rely upon the case law of Commissioner Customs v. Top Ten Promotions (1969) 3 All ER 39HL page 90. It is argued that deducing meaning of a taxing act one has to look merely at what is clearly said. Further reliance is placed upon the case law of CWT v. Modi Sugar Mills AIR 1961 (SC) 1047 wherein it was held that while interpreting a taxing statute equity or equitable consideration are entirely out of consideration and therefore taxing statute cannot be interpreted on any presumption or assumption and courts including ITAT cannot look beyond the words of statute. 24. Replying to assessee's arguments regarding principle of performance of impossibility, the ld DR submitted that this principle is not applicable because law does not force that one person should reside at a particular place. During the course of stay how assessee can say that had passport been not impounded, he would have necessarily gone abroad and for a specified number of days....
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.... the investment made was from assessee's sources only. It was submitted that Ld CIT(A) failed to appreciate that even otherwise also the addition was required to be deleted from Mrs. Renu Nanda hands as the jewellery found was held to have been acquired out of income of assessee only. Therefore, deletion in the hands of assessee's wife was inconsequential because the Ld CIT(A) was required to decide the issue on stand on alone basis. In view of the above, it was prayed that Assessing Officer's order in this respect be restored more so when the assessee has specially not disputed the finding of Assessing Officer that it was the assessee who had invested his own income in jewellery. 29. Regarding deletion of addition of Rs.17.94 crores on account of investment in Claridges Hotel Pvt. Ltd., the Ld DR relied on various documents referred to in assessment order and argued that UBBS had no income of its own and effectively this company was used as conduit pipe to channelize unaccounted income of Mr. Nanda because of the less stringent exchange norms there. It was argued that Assessing Officer had highlighted various issues of investment into Claridges Hotel Pvt. Ltd. and L....
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.... and ATM facilities are available at all places. Therefore, the ld CIT(A) has wrongly deleted the addition. 32. As regards the deletion of addition of Rs. 28.47 lakhs qua investment in Sonali Farms, the Ld DR submitted that despite various queries, the Assessing Officer was not supplied the information on the bank account from which the payment as reflected in the seized documents were made. Therefore, Ld CIT(A) ignored that assessee failed to explain the source of expenditure on Sonali Farms and even if the amount originated from Singapore/foreign bank account no evidence was adduced in this behalf. By failure to file required evidence before lower assessee failed to discharge his burden in support of his claim, therefore, ld. CIT(A) erred in giving this relief. 33. Regarding addition of Rs. 5.10 crores being deposit in Deutsche Bank, the Ld DR submitted that Ld CIT(A) had upheld the addition taking note of the fact that in terms of section 132(4)(a)/292C primary onus of explaining the nature of transaction and source of amounts recorded in documents seized was not discharged. He further submitted that Ld CIT(A) has rightly endorsed the Assessing Officer's view that even....
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....dia being more than 180 days as per the provisions of section 6. Per contra the claim of the assessee is that he was illegally forced to stay in India because his Passport was illegally impounded and he was compelled to stay in India against his wishes or free will. The Ld AR has forcefully argued that assessee has been a non resident since a long time and was earning only passive income in India for which he was filling regular income tax returns in India and was assessed accordingly. The ITAT order dated 24.7.2012 holding the assessee as non resident for assessment year 2001-02, 2002-03 & 2003-04 on the basis of number of days of stay in India is in totally different context. It has been confirmed by Hon'ble Delhi High Court in I.T.A. No. 85,87 & 100/2013 vide judgment dated 25.2.2013 placed at paper book pages 688 to 695. 40. Following the same ITAT vide another order dated 21.2.2014 for assessment year 2004-05, 05-06 & 06-07 has also held the assessee to be a non resident. The details of sources of income of assessee as placed in the form of a chart at paper book page 906 depicts that from assessment years 2001-02 to 2007-08 the assessee earned only passive income from h....
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....physically released consequent to Supreme Court order, the Passport Authorities again impounded the passport on 25.3.2008 under some other provisions. Against the later order of Pass Port Authorities the assessee again approached Hon'ble Delhi High Court against impounding of passport vide order dated 5th October, 2010 was pleased to order for release of Passport with a condition that assessee will take permission of the Trial Court before seeking to travel abroad. 44. The assessee then filed application for permission to travel abroad for two months which was dismissed by the Trial Court vide its order dated 25th October, 2010. Against this order, the assessee again approached Hon'ble Delhi High Court and Hon'ble Court vide order dated 21.9.2011 directed the Trial Court to permit the assessee to go to London for a period of two weeks on furnishing of security of Rs. 50 crores. A query was raised by the Bench as to whether consequent to any earlier order by CBI or other courts order prior to 21-9-2011, whether the passport was physically released to assessee. Ld AR stated at the Bar that passport was never handed over to assessee prior to 21- 9-2011 order, a fact whi....
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....n released after first order of spl. Judge CBI court, the assessee would have travelled abroad thus maintaining his NRI status, it is only the wrongful impounding of passport which is the cause of preventing the assessee from excercising his lawful right of travelling abroad. In the light of above legal hurdles, facts and circumstances, the Ld AR argued that for the purpose of determination of residential status of assessee the period of impounding of passport which resulted in forced/compelled stay in India should be excluded while counting the days of stay in India. 48. The application of strict meaning of provisions in this behalf by lower authorities, leads to manifestly absurd results which cannot be the intention of legislature. It cannot be intended to deny the NRI status in cases of illegal criminal charges and impounding of passport despite repeated requests to allow the subject who is NRI since last 2 decades, to go out of India as usual. Ld. counsel has relied upon a number of case laws for the proposition that where application of strict and literal meaning to provisions of Act gives absurd results, the courts can interpret the language suitably by applying the aids ....
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....T (1994) 208 ITR 649 (SC) wherein the Hon'ble Supreme Court has observed as under:- "Where the language of the statute in the ordinary meaning and grammatical construction, leads to manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdly which can hardly have been intended a construction may be put upon it which modifies the meaning of the words and even the structure of the sentence, this may be done by departing from the rules of grammer, by giving an unsual meaning to particular words, or by rejecting them altogether on the ground that the legislature could not possibly have intended what its words signify and that the modifications made are mere corrections of careless language and really give the true meaning., Where the main object and intention of the statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used. Lord Reid has said that he prefers to see a mistake on the part of the draftsman in doing his revision rather than a deliberate attempt to introduce an irrational rule, the cano....
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....itions, which cannot be held to be covering the issues in question. The issue of literal or strict interpretation and these peculiar facts about untenable impounding of passport and restrain on travel out of India was not at all present in earlier years. Thus a judgment which has no parity of facts or issues cannot be applied to present case. These issues cannot be summarily held to be covered against assessee on assumptions and presumptions as is being canvassed by the revenue. 55. After careful consideration of the facts we are inclined to agree with ld. counsel for the assessee that facts and legal issues before us and earlier years are significantly different. In earlier years the ITAT was concerned with a totally different set of facts i.e. the assessee though not physically present in India for more than 182 days was assumed to be resident on the plea that if assessee carries on business from India then he becomes a resident even without physical presence of 182 days in India. This assumption and interpretation of department was dislodged and rejected by the ITAT in earlier years, which has been confirmed by Hon'ble High court. Thus we are of the view that assessee'....
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....gles the assessee was restrained by govt. from traveling abroad, compelled to stay in India for more than 180 days. The circumstances were beyond assessee's control and no fault can be attributed to assessee in this behalf. 58. In our considered view these facts and circumstances create a peculiar situation. Due to initiative on the part of govt. agency which is held to be untenable, it became impossible for the assessee to go out of India. If only a strict and legal meaning is assigned to relevant provision it leads to a manifest absurdity thereby denying a lawful entitlement to an assessee by an action of a govt. agency which is held to be untenable by courts and the FIR is ultimately closed by CBI. Assessee did not sit idle and pursued legal remedies requesting release of passport to enable him travelling out of India to look after his world-wise business. Thus the assessee was diligent in protecting his legal rights. The assessee's over stay in India is neither attributable to his volition nor free will and is a result of untenable actions of impounding his passport by executive orders which are quashed by highest court. In our considered view in these circumstances,....
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....and whose passport was untenably impounded and released after a long winding and apparently tiring spat of legal proceedings. In our considered view the literal meaning and strict interpretation cannot be applied to decide the NRI status in the peculiar facts of this case. The literal meaning manifestly leads to unintended absurdities and undue hardship on an assessee who is not found to have violated the law. Untenable impounding of passport and restriction on freedom of movement to travel abroad and thereafter adverse tax consequences cannot be the intention of legislature. In these circumstances it is desirable to apply appropriate rules of interpretation of statutes. Our view is fortified by Hon'ble Supreme court judgments in the cases of J H Gotla, K P Verghes, C W S (India) ltd., Mysore Mineral, and Bharat Cement Works (all supra). 61. In our considered view in the facts and circumstances, the rules of interpretation of "reading down of statutory provision" and "harmonious construction" will provide most appropriate interpretation and meaning to the relevant provisions for determining the NRI status. Applying these rules of interpretation relevant rules are to be read ....
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....aced before us a passage from Broom's Legal Maxims (p. 162) 10th Edn. Where the doctrine of impossibility of performance (lex non cogit ad imporsibilia) has been discussed, it has been indicated therein that however mandatory the provisions may be, where it is impossible of compliance that would be a sufficient excuse for non compliance, particularly when it is a question of the time factor. Keeping the attendant circumstances of this case in view, we find it difficult to hold that the time taken by the State Govt. can amount to withholding of the representation which resulted in non compliance of sec. 10 of the Act so as to vitiate the detention." 64. Similar were the findings in the case law of Standard Chartered Bank v. Directorate of Enforcement (2005) 275 ITR 81 (SC), wherein the Hon'ble Apex Court held as under:- "It is an acceptable legal maxim that law does not compel a man to do that which cannot possibly be performed (impotentia excusat legem). This principle can be found in Bennion's Statutory Interpretation,m 4th Edn. At p/969 "All civilized systems of law import the principles that lex not cogit ad impossibilia...". As patternson, J. said the law comp....
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....ssibility of performance and 'force majeure' . In view of the above facts and circumstances we hold that for calculation of stay in India for these years the same should be calculated after exclusion of days of wrongful impounding of passport which constitutes forced stay in India. Thus period for which assessee could not travel outside India in above facts and circumstances i.e. from 10.10.2006 to 21-9-2011 i.e. till the passport was finally handed over to assessee and allowed to travel outside India should be excluded. Consequently assessee's residential status is held to be as 'non resident' for the years before us. Therefore, ground No.2 in both the years is allowed. 68. We may hasten to add that this conclusion is based on consideration of peculiar facts and circumstances in the present cases and it cannot be used as a general precedent. 69. Vide ground No.3 the assessee has challenged that Ld CIT(A) was not justified to direct the Assessing Officer to pursue the reference made to Govt. of Mauritus, Govt. of Jersey and British Islands to arrive at real facts regarding funds involved in various entities abroad. We find that this direction given to Asse....
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....ed. 71. Ground No.5 in A.Y. 2007-08 relates to addition of Rs. 7,29,0000/- confirmed by ld CIT(A) on account of excess cash found at the time of search. The assessee had submitted his explanation vide letter dated 14.1.2009 along with cash flow statement placed at paper book page 261. The Assessing Officer has made the addition by rejecting the opening balance of cash in the cash flow statement and also estimated Rs. 1,50,000/- per month as household expenses against Rs. 75,000/- per month claimed by the assessee. The Ld AR has argued that without considering opening balance and arbitrarily estimating household expenses, the Ld CIT(A)'s action in confirming the action of Assessing Officer is not justified. It is pleaded that assessee has explained the cash flow along with opening balance before AO who has not considered the same. After hearing the parties we are of the view that interest of justice will be served if this issue is setaside to AO with a direction to consider the cash flow statement and explanation of the assessee and readjudicate this issue after giving a reasonable opportunity of being heard regarding opening balance of cash and regarding justification of dra....
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....ident or a non resident. In case he is regarded as a resident then obviously this addition would have to be made. But, if he is regarded as a non resident then this addition will have to be deleted. This is exactly what the Tribunal has done. The Tribunal considered the case of the revenue as well as that of the respondent/assessee and determined that the respondent/assessee was a non resident and therefore the said addition has --------. In view of the fact that the Tribunal has correctly decided that the respondent/assessee was not a resident in India in the years in question, it is axiomatic that the addition of Rs..10,51,20,000/- u/s 68 would have to be deleted because it was a transfer from the respondent/assessee's foreign account to the domestic account. Hence, the matter is squarely covered since it is the same bank account which has already been considered and adjudicated upon by the Hon'ble High Court. 75. In these two years we have already held the assessee to be a non resident for the purpose of income tax. Therefore, this ground is squarely covered in favor of assessee. In view thereof the above, ground No.7 in A.Y. 2007-08 is allowed. 76. Ground No.8 ....