TaxTMI 
TaxTMI 
2016 (4) TMI 295
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....anation to section 6(1)(c) is not applicable to the case of the assessee and further even if the assessee is treated as NRI, then also, there is need to analyze the taxability of income as an NRI in the light of section 5 and section 9 of the Income Tax Act, 1961, (hereinafter the Act). The issues involved in all the appeals were argued to be identical. 2. During hearing, of this appeal, the ld. CIT-DR, Shri N.P. Singh, advanced arguments, which is identical to the ground raised by contending that search action u/s 132 of the Act was carried out on 15/05/2008. The ld. CIT-DR also contended that the issue involved in all the assessment years is identical. It was pointed out that assessee is a resident and original passport was never produced by the assessee before the Assessing Officer. It was fairly agreed by the ld. CIT-DR that assessee was frequently going abroad and original passport was claimed to be lost. It was pleaded that there is contravention of Rule 46-A of the Rules by the ld. Commissioner of Income Tax (Appeals) but when questioned by the Bench and also objected by the assessee, it was again agreed that remand report was sought from the Assessing Officer by the ld. ....
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....cument is examined including FEMA conditions, status and the accounts are not opened in a casual manner. Our attention was invited to page-18 of the impugned order by asserting that the addition was deleted based upon the evidence and not in a slip short manner as has been alleged by the ld. CIT-DR. It was explained that the date of arrival and departure are to be excluded while counting the period of stay for which reliance was placed upon the decision in DIT vs Manoj Kumar Reddy Nare (2011) 245 CTR 350 (Karn.); (2011) 12 taxman.com 326 (Karn.) order dated 20/06/2011 and ITO vs Fausta C. Cordeiro (2012) 24 taxman.com 193 (Mumbai) order dated 29th June, 2012. The ld. counsel for the assessee also consented that the issue involved in all the appeals are identical. 2.2. We have considered the rival submissions and perused the material available on record. These appeals contains identical issues, were heard together, therefore, being disposed of by this common and consolidated order for the sake of brevity and convenience. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on reco....
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....he mid of investigation, Mr. Binod Kumar went abroad. 2.3. Before coming to any conclusion, we are reproducing hereunder the relevant finding of the ld. Commissioner of Income Tax (Appeals), contained in the impugned order. The written submissions, though are part of the impugned order, but still we are reproducing the same for ready reference for reaching to a proper conclusion:- "3.The facts as mentioned in the statement of facts and reiterated in the written submissions are as under:- Shri Binod Kumar Singh Slo Late Shri M P. Singh an Indian Citizen was born in India on 14.11.1960. After having completed his Higher Secondary Education at St. Xavier's College, Ranchi, Jharkhand, in 1978, was selected by the public sector undertaking MIs Heavy Engineering Corporation Ltd. Ranchi and sent to Soviet Union for further education. After completing the Russian language course at Lomonosova Institute at Kiev in 1978-79, the appellant secured admission at the "Odessa Polytechnic Institute" Ukraine in 1979, wherein he pursued his studies in Master of Engineering in Radio Technical Engineering. After having passed out from the aforesaid institute in 1984, the appellant did a....
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.... not locate the same. The appellant with a desire to set up and make investments in India started a Pharmaceutical Company under the name and style of "Brahma Drugs Pvt. Ltd which was incorporated in AY 1999- 00. Thereafter "Genom Biotech Pvt. Ltd." was incorporated in 2001-02 having its manufacturing plant at MIDC Sinnar, Nasik (India) and its Registered Office at A- 601 / 602, Delphi, Orchard Avenue, Hiranandani Business Park, Powai, Mumbai. The aforesaid investment as also the investments made in acquiring various real estate properties in India were through remittances from Overseas. The investments in India in the Stock Exchange through Demat Accounts were all classified as non-resident. The Period of stay of the assessee in India as computed and verifiable from the original passports, as presently available, detailed ac under:- A.Y. F.Y. Days outside India Days in India Residential Status Remarks 1995-96 1994- 95 337 28 Non Resident 1996-97 1995- 96 306 59 Non Resident 1997-98 1996-97 337 28 Non Resident 1998-99 1997-98 346 19 Non Resident Passport for perio....
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.... 38, STREET, MOSFILNOVSKAYA, MOSKOW, RUSSIA, 7 010613100001157 (NRE) Bank of India Mumbai Corporate Banking Branch Fort- Mumbai STARSTARONAVODNITSKAYA 6-A, FLAT NO.44, KYIV, UKRAINE. The particulars of all immovable properties purchased and owned by him in India and abroad are detailed as under:- Sr. No. Particulars of Property Date of Acquisition Cost Source of Investment 1 50% share in House Jamuna Apartment, Flat No.92, Boring Road, P.S. S.K. Puri, Patna-13 14/09/1992 2,00,000/- (share of A-Rs 1,00,000/-) Remittance from abroad 2 Flat No.44, House No. N-6A, Staronavodnytskaya Street apt. 44 KYIV Ukraine) 09/06/1995 7500000/- (Seven hundred fifty million karbovantes) 3 50% share in House- Flat No.118, Building No.102, Silver Oaks Apartments,D.L.F Qutub Enclage-1, Gurgaon 18/11/1996 Rs.15,03,260/- Direct Remittance from abroad 4 Flat no.43, House No.N-6A Staronavodnytskaya Street apt. 44 KYIV Ukraine) 25/04/1997 200/two hundred grivnyas 5 B-603/A, & B-603/B Valencia, Hiranandani Gardens, Powai, Mumbai 19/03/1998 B-603/A Rs. 36,76,160, B- 603/B Rs. 22,76,040/- Loan....
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....e Income Tax Authorities conducted a search operation u/s 132(1) of the Income Tax Act, 1961 on May 15, 2008 while the appellant was abroad. The search was conducted in the names and on the premises detailed under:- (a) Shri Binod Singh, Shri CMP Singh, 2702, Tivoli, Hiranandani Gardens, Powai, Mumbai. (b) Genom Biotech Pvt. Ltd. A-504, 601, 602 & 604 Delphi, Orchard Avenue, Hirandani Gardens, Powai, Mumbai. (c) Genom Biotech Pvt. Ltd. MIDC, Malegaon, Sinnar, Nasik. (d) S/Sh. CMI' Singh, Amit Kumar, Rajesh Soni, Diip Kumar Bhagat, (all Directors of the Company) 4A / 1806, Dreams Co-op. Housing Society, Bhandup (West) near Railway Station, LBS Marg, Mumbai. 2.1 During the course of the search, there was no seizure of assets. However, certain documents were seized though none of them were incriminating and have not been used for making any addition. Notice u/s 153A & 143(2) of the Income Tax Act were issued by the AO and duly served Sr. No. A.Y. Date of issue/Service of Notice u/s 153A Date of Issue/Service of Notice u/s 143(2) 1 2003-04 24/07/2008 17/11/2008 / 18/11/2008 2 2004-05 24/....
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.... explanation to Section 6(1)(c) is not applicable to the appellant. Held that nothing was brought on record to indicate that the appellant is permanently domiciled in UK despite documentary evidence having been filed. Held that the appellant is a resident and ordinarily resident in India liable to pay tax on global income. B. Additions u/s 68 of the Income Tax Act,1961 1 Alleged unexplained deposits in India Bank A/C's through Remittances from abroad. Rs.17,06,95,475 /- 2 Alleged unexplained Remittances from Overseas to Genom Biotech Pvt. Ltd. Rs.93,47,871/- 3 Alleged unexplained deposits in Bank A/c's maintained abroad -Rs.1,72,24,053/- 4 Alleged unsubstantiated liabilities Rs.7,91,604/- Total Rs.19,08,69,003/- The appellant filed combined written submissions for the AY's 2003-04 to 2009-10 along with paper book thereof, copy of which was forwarded to the AO for his comments. The AO furnished his comments by way of Remand Report dated October 17, 2011 and in respect of residential status stated "During assessment proceeding regarding residential status the assessee furnished copies of the passpor....
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....of departure No. of days in India (Passport No) and Remarks No. of days as per assessee F.Y.2006-07 01/04/06 13/04/06 13 Z-1023527 12 22/10/06 06/11/06 16 Z-1023582 15 05/12/06 09/11/07 36 Z-1023582 35 25/02/07 31/03/07 35 Z-1023582 34 120 DAYS TOTAL TO READ 100 DAYS 96 F.Y.2007-08 01/04/07 18/04/07 18 Z-1023582 17 27/04/07 13/05/07 17 Z-1023582 16 08/07/07 11/08/07 35 Z-1023582 34 19/08/07 16/09/07 29 Z-1023582 28 31/01/08 31/03/08 79 (Z-1023582) As per assessee the no. of days of stay in India is 78. However, on calculation it is arrived at 79 178 Days 173 F.Y.2008-09 01/04/08 08/04/08 8 (Z-1023582) assessee arrived in India on 13/01/2008 and left on 08/04/08 7 23.05.08 16.06.08 25 (Z-1023582) As per assessee the no. of days of stay in India is 24. However, on calculation ....
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....uding both the date of arrival and departure which is not in accordance with law. The first issue to be decided is whether the additional evidence filed by the appellant under Rule 46A should be admitted or not. The petition filed by the appellant containing 316 pages was furnished to the AO granting opportunity to examine the same and the AO has submitted his report dated March 22, 2012. The appellant has submitted that due to circumstances beyond his control, the old passports not being readily available with him, the same could not be filed. The appellant being resident abroad could not furnish the requisite information pertaining to the sources of investment in India, as the same was to be obtained from the banker and old information was not easily accessible. The Counsel pleaded that the documents filed by the appellant go to the root of the assessment and are necessary for arriving at a judicious decision. He has cited the following judgments:- CIT Vs Suretech Hospital And Research Centre Ltd (2007) 293 ITR 53 (Born) The rule 46A of the 1962 rules allows the appellant authority to permit production of documents which enable him to dispose of the appeal Tribunal....
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....28. The Hon'ble members have relied upon the decision of the Hon'ble Delhi High Court in the case of Praveen Kumar v Sunder Singh Makkar. The Hon'ble High Court referred to Section 9 of the General Clauses Act and held "if the word from is used then the first day in the series of days will stand excluded and if the word to is used then it will include the last day in a series of days or any other period of time". The Hon'ble Members observed that the period is to be counted from the date of arrival of the assessee in India to the date he leaves India. Thus, the word "from" and "to" are to be inevitably used for ascertaining the period though, these words are not mentioned in the statute. Accordingly, we hold that first day of each visit shall be excluded" I have considered the submissions of the appellant and the order of the AO. The facts as mentioned in the case of the appellant are filly covered by the judgment as mentioned above which states that while the computing the period of stay of a person in India, the date of arrival is to be excluded. Accordingly, I hold that the period of stay in India of the assessee for the assessment years 2007-08 to 20....
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....s his home and part of his family (Parents) in India. The business empire run by him is totally based in India. The Company's major activity of manufacturing and export activity is fully controlled by the Indian Territory. The assessee has no other source of Income except the business activity carried out by him from India. Therefore, the interpretation of the term "being outside India, comes on a visit to India" is relevant 'in the light of the facts. The assessee has not submitted any evidence to prove why he is being outside India and comes on a visit in India." In Para E at Page 24 of the order mentions as under "The assessee has furnished copies of certain documents ........school certificates of Ms. Trisha Singh (Daughter), Master Vyom Singh (Son), electricity bills, club cards, property documents . ...... how these documents are relevant for his claim of NRI status. The assessee has furnished a resident permit by UK in March 2009 .............assessee has not furnished any detail to prove that he was domiciled in UK from FY 2002-03 to 2008-09. It is also noticed that for the previous year 2004-05, the information furnished by the assessee regarding the no....
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....atus of NON-RESIDENT which have been accepted and stand assessed as such. The attention was drawn to the fact that section 6 (1)(c) has cumulative condition with respect to presence in India in 365 days in four preceding years AND 60 days or more in that year. In the case of an Indian Citizen / PIO the period of 60 days is substituted by 182 days. Thus, in case the period of stay is less than the stipulated no. of days, the other condition becomes irrelevant as both the conditions have to be satisfied. The AO has while interpreting the provisions of section 6(1)(a)/6(1)(c) read with explanation b has admitted that the relaxation of extended time of 182 days is available to a citizen of India / person of Indian origin provided the said person is residing abroad and comes on a visit to India. He has despite furnishing evidence of residing abroad since over 20 years including evidence that every travel after 2002 commenced and ended in UK, foreign bank accounts specifying the address on which KYC was done, borrowing abroad, earning abroad, concluded that in the absence of satisfactory proof / evidence of the domicile of the appellant being abroad having been established, the ....
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....eparture from India leaves India with the purpose of employment, then the status is to be determined under clause (c) by computing the following:- Been in India for 365 days or more in four years preceding the year of departure OR In India for a period of 182 days or more In case of persons falling under category (b), the Explanation (b) to Section 6(l)(c) is applicable after an assessee having become non-resident in an earlier year resides / settled abroad. Thus, the determination of residential status of an individual under section 6(1) may be summarized as follows:- If individual has stayed in India for a period of 182 days or more in any previous year he is a resident in India in that previous year OR If he has stayed in India for a period of 60 days or more during any Previous year and 365 days or more during the four preceding previous years, he is a Resident in India in that previous year. If both the above two conditions are not satisfied, he is a Non- Resident in India in that previous year. Exceptions to Section 6(1) An individual, who is an Indian citizen, leaves India for the purposes of employment outside India; or An individual who is an Indian Ci....
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.... period of 90 days or 60 days was too short, especially for those who had to supervise their investments in India. In order to enable the non-resident Indians to stay in India for a longer period for looking after their investments without losing their 'non-resident' status, clause (b) of the Explanation to clause (c) of sub-section (1) of section 6 has been amended. The period of 90 days provided there under has been increased to 150 days. The amended provision will apply not only to a citizen of India but also to a person of Indian origin within the meaning of Explanation to clause (e) of section 115C of the Income-tax Act. The effect of the amended provision is that, subject to the other conditions prescribed in Section 6 of the Income-tax Act, such person can stay in India on a visit for 149 days as against 89 days earlier in the case of citizens of India and 59 days earlier in the case of those who were not citizens of India during a previous year without losing their 'non-resident' status. Thereafter, amendment was again made by the Finance Act, 1994 and were clarified in Circular No. 684 dated 10.06.1994 Relevant extract is reproduced hereunder:- ....
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.... who has left India for employment outside India he should be treated as resident of India only if he was in India during the relevant period / year for 182 days or more. In other words, if an individual has spent less than 182 days in India during a previous year and was outside India for the purposes of employment, then regardless of his being in India for 365 days or more during 4 preceding previous years, he cannot be treated as a resident of India. Vijay Mallya V/s, ACIT 263 ITR 41 (Cal.) The Lordships while analyzing the provisions of Section 6(1')(c) read with both the Explanation (a) & (b) have held "clause (a) of Explanation covers cases where a citizen of India leaves India for the purpose of employment outside India, then he would be a nonresident, if he is a India for less than 182 days. Now having been employed outside India, he comes to India for a visit, the Explanation (b) would be attracted. V. K. Ratti Vs. CIT 299 1TR295 (P&H) The lordship has held that physical presence in India has been indicated to be the basis for determination of residence. CIT vs Ramaswamy (K.S.)(1980) 122 ITR 217(SC) Section 6(1) applies to all individuals: Section 6(1....
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.... Income Tax Act, by recording a finding that the assessee is not domiciled in U.K. and no evidence thereof has been adduced. It has been brought on record that the appellant is (a) residing in U. K. in residential house owned by him (b) the children are undergoing education in U.K. (c) the period of stay in U.K. can be confirmed from the Passports, which would indicate he is domiciled in U.K. (d) the resident permit granted by U.K. is only issued after a person is domiciled in U.K. beyond a certain period of time (e) the Banking Accounts in the name of the assessee were opened after due verification, compliance with KYC norms and all classified as non-resident, bearing the permanent address of UK (f) assessee has filed tax returns in UK for 2007-08 to 2009-10. Further the provisions of Section 6 for determining the residential status are based on physical presence in India for determining the period of stay in India. In case an assessee satisfies the same or otherwise the status is determined accordingly. The appellant states that, Circular No.684 of 1994 issued by the Central Board, being binding on the AO, the AO ought not to have ignored the same to conclude on alleged ground....
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....001-21/01/08 4 Z-1023527 UKRAINE/KYIV 14/05/2003-21/01/08 5 Z-1023582 UKRAINE/KYIV 23/08/2006-10/08/16 An embassy is a diplomatic office established in one country by another country with which diplomatic relations have been established. A consulate is the regional branch of a country's main embassy. Technically the embassy building and its property are part of the embassy's country. The following services are provided by the Indian Embassy abroad relating to the passport. Issue emergency passport in case you lose your passport Renewal of passport, issuing a new/ duplicate passport Validity extension of current passport, additional booklet, getting a passport for a minor. Hence, the issue of Indian Passport by the Ukraine and London Embassy to the appellant is not wrong and in fact shows that the appellant at that point of time was in that country. The Consulate General of India, Birmingham located at 20 Augusta Street, Jewellery Quarter, Hockley Birmingham B18 61L has the following guidelines for the issue of new passports: Indian passports are now normally issued with a validity of 10 years (except iii the case of children up t....
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....assessee is subjected to tax in UK for the years 2007-08 to 2009-10. Copies of returns filed. The assessee was assessed to tax in India for the A.Y. 2005-06 in a scrutiny assessment in of non-resident and no evidence has been found which would suggest that the -'said status was determined fraudulently. The banking accounts in India are all Non Resident External accounts bearing addresses abroad. The said accounts were opened after due diligence of "Know Your Customer (K)" norms laid down by Reserve Bank of India. Thus the learned counsel argued that in view of the aforesaid the Findings of the AO that assessee is not settled abroad are opposed to facts and need to be reversed. Now, it is pertinent to analyze the section 6 of the Income Tax Act, 1961. The residential status is crucial in determining the taxes an assessee is required to pay. Section 6 of the Income Tax Act defines the following categories liable to pay tax in India: Non- Resident Indian (NRI) Resident Resident, but not ordinarily resident (RNOR) NRIs and RNORs are liable to pay tax only on their "Indian income" while tax payers who are resident in India as per Income Tax Act are taxed on t....
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.... residential status has been properly determined by the Assessing Officer or not. Under the circumstances, even when the Assessing Officer accepts the claim of assessee and decides that the assessee is a 'non-resident' under section 2(30), then also he is duty-bound to record the reasons as to why he is not holding the assessee as a 'resident' in India either under the provisions of section 6(1)(a) or under section 6(l)(c). Recently, the Hon'ble High Court of Karnataka decided the question whether the period of visit by NRI preceding his return to India should be excluded from the total stay of NPJ. The Hon'ble Karnataka High Court in Manoj Kumar Reddy Nare (2011) 12 taxmann.com 326 (Kar) has held that the period of visit by a Non Resident shall be excluded for counting the number of days of stay in a year for the purpose of determination whether he/she is resident in India in that year. In this case, the issue before the Karnataka High Court was to determine the residential status of an individual assessee for assessment year 2005-06 (previous year 2004-05). The assessee who was an employee of an Indian company was deputed to Chicago, USA with effect fro....
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....d of stay in India. Thus, the period of the assessee's visit (from 18th August 2004 to 6th September 2004) was held to be excludible from his stay in India during the relevant previous year. The Hon'ble Karnataka High Court held as under "The material on record would clearly show the fact that the assessee was to work in U S.A., though be an employee of the company in India, on the basis of the letter of Deputation. However, a concurrent finding by the Assessing Officer, the Appellate Authority and the Tribunal that excluding the time during which he was visiting India, the requisite number of days, that is 60 days during the current year, the assessee was not in India and therefore, he is to be treated as non-resident and cannot be taxed as a resident under section 6(1)(c). The said finding of fact is arrived at on the basis of the material on record. The Tribunal and the Appellate Authority have relied upon a certificate issued by Warton Residential, the employer, which is dated 18-1-2008. In the certificate it is stated that the assessee was resident of River North Park Apartments from 20th March, 2004 until 9th April, 2005 and that during the said period, he resided ....
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....continuing to be a nonresident is available if the NIRI comes to India for a visit. What is a visit is not explained. Generally if he comes to India (for any purpose), and goes back, it should be considered as a visit to India. This can have an impact in the year in which a person returns to India. The Word 'visit' has not been defined in the Income Tax Act. However, the definition of the word 'visit' is as under Vis.it Verb\vi-zet\ Vis.it.ed:vis.it.ing Definition of Visit Transit verb 1 a archaic: comfort -used of the Deity b (1) afflict (2): inflict, impose C: avenge d: to present itself to or come over momentarily 2 to go to see in order to comfort or help 3 a : to pay a call on as an act of friendship or courtesy b : to reside with temporarily as a guest C: to go to see or stay at (a place) for a particular purpose (as business or sightseeing) d to go or come officially to inspect or oversee intransitive verb 1 to make a visit; also: to make frequent or regular visits 2 chat, converse Examples of VISIT She is visiting her aunt in New York. When are you comin....
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....that he was resident in this country. A similar decision was given in IRC v. Lysaghat (1928) AC 234, where the facts were not so strongly in favour of the crown; in that case a citizen of the Irish Free State came to English company, and stayed in hotels for a week on the occasion of each visit. The Special Commissioners found as a fact that he was resident in the United Kingdom, and the House of Lords (Viscount Cave L. C. dissenting) refused to interfere with their finding. This case shows that the motive of presence here is immaterial; it is a question of quality which the presence assumes. The foreign income of every resident even when it is not brought into the country is chargeable to tax except when the resident is 'not ordinarily resident' in India. For an individual including a resident in order to be 'not ordinarily resident' so as to escape tax on his foreign income, it must be shown that the position is covered by clause (a) of sub-section (6) of section 6 of Act. When an individual has been a resident in India for nine out often preceding years, then in order to escape tax on his foreign income, he must not have been in India for seven hundred t....
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....eaning or their popular or commercial sense as distinct from their scientific or technical meaning unless a contrary intention appears. The Supreme Court of India in the case of Tarlochan Dev Sharma vs State of Punjab has held on July 25, 2001 that even the meaning of the words not defined in the Statutes should be assigned after reading the same into the context." 2.4. Before coming to any conclusion, we are analyzing the background of the assessee (as is evident from statement of facts filed before the ld. Commissioner of Income Tax (Appeals) by the assessee through letter dated 09/02/2011- available on record). The assessee was born in India on 14/11/1960 and after completing his higher secondary education at St. Xavier College Ranchi, Jharkhand, he was selected by Heavy Engineering Corporation Ltd. and in 1978 he went to Soviet Union for further education. During the period from 1978 to 1984 he did his masters in Engineering in Radio Technology in systems and also did post graduation in Russian language. From 1984 to 1986, he worked in trading pharma company in USSR and from 1986 and 87, he did his business management from Sweden and from 1987 to 1989 again worked i....
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....was not controverted by the Revenue. In view of this factual finding, we are not agreeing with the argument of the ld. CIT-DR, that original passport was not produced by the assessee. From the facts, it is clearly oozing out that the assessee in fact produced the passport along with their validity so, the allegation of the Assessing Officer which were identically argued by ld. CIT-DR are not substantiated, therefore, on the basis of finding recorded by the ld. Commissioner of Income Tax (Appeals) and examined by us clearly indicates that the passport were in fact produced by the assessee. 2.7. Now, so far as, status of the assessee is concerned which is to be identified by his stay in India, is concerned, it is summarized as under:- Previous year Previous year A.Y. Days outside India Days in India Consequent Residential status Remarks 1994-95 1995-96 337 28 Non- Resident 1995-96 1996-97 306 59 Non Resident 1996-97 1997-98 337 28 Non-Resident 1997-98 1998-99 346 19 Non-Resident Passport for period 1st Sept. 1998 to 18th June 2001 not t....
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.... 24/04/1998 8 39 1999-00 CIT(A) order of A.Y. 2003-04 Pages 12 & 13 10/071998 to 17/07/1998 8 29/12/1998 to 20/01/1999 23 8/4/1999 to 19/4/1999 11 123 2000-01 CIT(A) order of A.Y.2006-07 Pages 7 & 8 28/6/1999 to 1/9/1999 65 18/10/1999 to 25/10/1999 7 16/12/1999 to 10/1/2000 25 13/3/2000 to 28/3/2000 15 5/10/2000 to 24/10/2000 19 57 2001-02 27/12/2000 to 23/1/2001 27 5/3/2001 to 16/3/2001 11 03/07/2001 to 19/09/2001 68 150 2002-03 CIT(A) order of A.Y. 2003-04 Pages 10 & 11 19/10/2001 to 24/10/2001 5 18/11/2001 to 13/01/2002 56 03/03/2002 to 24/03/2002 21 03/05/2002 to 22/05/2002 20 179 2003-04 01/07/2002 to 28/08/2002 58 09/09/2002 to 02/11/2002 53 17/11/2002 to 30/11/2002 13 17/12/2002 to 21/01/2003 35 02/04/2003 to 04/04/2003 2 162 2004-05 CIT(A) order of A.Y.2004-05 Pages 13 & 17 05/07/2003 to 02/09/2003 59 01/10/2003 to 29/12/2003 89 02/02/2004 to 11/02/2004 9 28/03/2004 to 31/03/2004 3 ....
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....ordinary resident (refer note (ii) 2007-08 2006-07 96 Non-Resident Not applicable 2008-09 2007-08 173 Non-Resident Not applicable 2009-10 2008-09 75 Non-Resident Not applicable The assessee before the authorities put the following notes:- i. The assessee is an individual, citizen of India/person of Indian Origin, who comes on a "visit to India", the provision of sub-clause (c) shall apply in relation to any year as if for the words "sixty days" the word "one hundred and eighty two days" has been substituted, therefore, in terms section 6 (1)(c), even if assessee is within India for a total of 365 days in four years preceding the relevant year, then also the person is to be considered as "Resident" for a particular year as he has to be in India for 182 days are more in that year. ii. During A.Y. 2006-07, the assessee was in India for more than one eighty two days, therefore, he is a resident in India for that year. However, keeping in view, the aforesaid history of the assessee, he is "not ordinarily resident" as in all the ten previous year preceding F.Y. 2005-06, the assessee is a "non-resident". ....
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....ntrolled wholly or partly from India (a) Income from profession/business set up in India. In case of a "resident assessee", the income arising in India and "foreign income" are taxable in India. 2.9 So far as, the contention of the ld. CIT-DR that there is violation of Rule-46A of the Rules and further no opportunity was provided to the Assessing Officer is concerned, we note that the details, filed by the assessee, were examined by ld. Commissioner of Income Tax (Appeals) along with the contention of the Assessing Officer, who was very much present before the ld. Commissioner of Income Tax (Appeals) during first appellate stage proceedings as is evident from the impugned order (page-1) that Shri Vijendra Ojha Addl. CIT and Shri Amit Singh ACIT both were present, therefore, the contention of the ld. DR that opportunity was not provided to the assessee is not substantiated. It is also noted from the impugned order (page-13) that the contention of the Assessing Officer has been duly incorporated in the impugned order, wherein, the assessee furnished certain copies of documents, evidencing that during F.Y. 2002-03 to 2008-09, he was domiciled in U.K. The documents relates to sch....
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....additional evidence in support of the remittances, which are as under:- (a) copy of HSBS Bank India FIRC in support of remittance of Rs. 13,57,72,439/-, received in India, in NRE Account of the assessee from a foreign bank account (b) copy of confirmation of Rs. 2,01,03,572/-, received from M/s Selesta Hoing Ltd. against the amounts owed by M/s Biogenetica ltd. (subsidiary of M/s Selesta Hoing Ltd.) to the assessee along with funds transfer advice from bank of Cyprus and FRIC issued by HSBC Bank, India. (C) copy of FRIC, issued by Axis Bank, India, in support of remittance of Rs. 18,08,83,727/-, received in India from foreign bank account of the assessee (Shri Vinod Singh). 3.3. It is noteworthy that aforesaid evidence was forwarded for examination by the Assessing Officer and report, no comments were offered except saying that evidence should not be admitted. So far as, admission of additional evidence is concerned, we are of the view, that the ld. Commissioner of Income Tax (Appeals) is empowered to admit the additional evidence and sought remand report from the Assessing Officer. The amount of Rs. 31,66,56,166/- was received in bank accounts of the assessee through r....
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....ch receipts but once it is discharged, no addition can be made u/s 68 of the Act. Even otherwise, if the Assessing Officer was still not satisfied with the explanation of the assessee, then the onus shifts to the Revenue to prove otherwise, consequently, we find no merit in the argument of the Department with respect to the impugned ground. The stand of the ld. Commissioner of Income Tax (Appeals), on this issue, is affirmed. 4. The next ground raised by the Revenue pertains to deleting the addition of Rs. 15,44,72,906/- made u/s 68 of the Act. The crux of argument advanced on behalf of the Revenue is in support to the addition made by the ld. Assessing Officer, whereas, the ld. counsel for the assessee defended the conclusion arrived at in the impugned order. 4.1. We have considered the rival submissions and perused the material available on record. The ld. Assessing Officer made the addition u/s 68 of the Income Tax Act, for the amount of Rs. 15,44,72,906/- ($ 32,86,657 at the rate of Rs. 47 per dollar at the relevant time) which was found deposited in the account maintained by the assessee with HSBC Bank USA. The addition was made by the ld. Assessing Officer on the ground....
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....on it is manifest that the same empowers the Income-tax Officer to enforce the attendance of any person and examine him on oath. That power has been exercised by the Assessing Officer in the assessment proceeding. It is contended by Mr. Shrivastava that when a witness has been examined by the Assessing Officer and his statement has been pressed into service, the assessee should have been allowed to cross-examine, more so, when, he had filed an affidavit retracting from his earlier statements." 4.5. In P.S. Abdul Majeed v. Agricultural ITO and STO , the High Court of Kerala took note of the order of reassessment which was made without any reference to inspection records and made on the basis of the strength of the entries in the auctioneers' records. In that context, it was held that reliance on the auctioneer's records and treating them as if they were conclusive did violence to the principles of natural justice when the petitioner had prayed for an opportunity to cross-examine the auctioneers. It was ruled therein that when such a request was made it was incumbent on the officer to afford an opportunity to the assessee to crossexamine the authors of those books. 4.6.....
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....ne the analyst who had prepared the test report the order of assessment was vulnerable. Against the order of the Tribunal the Revenue approached Hon'ble High Court, wherein, while dismissing the appeal, filed by the Revenue, has held as under (page 108): "There is no doubt that even if the strict rules of evidence may not apply, the basic principles of natural justice would apply to the facts of the case. The Assessing Officer placed reliance upon the report of the Shri Ram Institute for Industrial Research for deciding against the assessee. The report cannot be automatically accepted particularly since there is a challenge to it and the assessee had sought permission to cross-examine the analyst making the report. Since the Assessing Officer did not permit the correctness or otherwise of the report to be tested, there is a clear violation of the principles of natural justice committed by him in relying upon it to the detriment of the assessee. As observed by the Constitution Bench in C.B. Gautam v. Union of India , that, 'The observance of the principles natural justice is the pragmatic requirement of fair play in action'." 4.10. In the case at hand Mohd. Rashi....
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....dition has been made on the foundation of his deposition. In the result, we answer the reference in the affirmative in favour of the assessee and against the Revenue. There shall be no order as to costs." Since, the assessee is a non-resident during the year, the amount found deposited in the foreign bank cannot be held to be taxable in India, hence, in view of the foregoing decisions and the uncontroverted factual matrix, we find no infirmity in the conclusion drawn by the ld. Commissioner of Income Tax (Appeals), on this issue, and affirmed the same. 5. The next ground raised by the assessee pertains to deleting the addition of Rs. 2,76,410/- on account of unsubstantiated liability by considering the additional evidence in contravention of Rule-46A of the Rules. The crux of argument advanced on behalf of the Revenue is identical to the ground whereas, the ld. counsel for the assessee defended the conclusion arrived at in the impugned order. 5.1. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in ....
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....in respect of addition u/s 69 of the Act relating to Residential House at 3 Civic Way, Ilford. (GBP 284000)-Rs.1,25,00,000/- has submitted that the Assessing Officer has without verification on facts, framed the assessment without application of mind, in a hazard manner, made the impugned addition ignoring the critical fact that the property was purchases in A.Y. 2003-04 as evidenced by copy of sale Deed placed on record, which has also available with the Assessing Officer. Thus, this addition is wholly opposed to facts and law. In any case the assessee has also placed on record the source of investment made out of earning and saving thereof abroad and being Non Resident the same is not taxable in India. The appellant in respect of Property at 9 HZ, Hadrian Way, Chilworth, Southampton, U.K (GBP 7,75,000) - Rs. 7,00,00,0001- purchased on 30.8.2007 has submitted that the same was purchased out of (i) Loan of GBP 4,80,0001 from banks against hypothecation of the Property at 9 HZ, Hadrian Way, Chilworth, Southampton, U.K. (ii) Loan of GBP 2,11,200 from banks against hypothecation of Property at 29, Rushden pardens Ilford, Essex, U.K- (iii)Ba1ance of GBP 83....
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.... consistency also, the assessee is having a case in its favour as consistency has to be maintained. So far as, the date of arrival and departure are concerned, both these dates are to be excluded while counting the stay in India, for which we are fortified by the decision from Hon'ble Karnataka High Court in 245 CTR 350 (Karnataka) DIT(IT) vs Manoj Kumar Reddy (2011) 201 taxman 30(Kar)-(2011) 12 taxman.com326 (Kar) and ITO vs Fausta C. Cordeiro (2012) 24 taxman.com 193 (Mum.). So far as, the issue of consistency is concerned, it has to be followed, for which, we have fortified by the following decisions. i. Parshuram Pottery Works Ltd. vs ITO 106 ITR 1 (SC) ii. Security Printers 264 ITR 276(Del.) iii. CIT vs Neo Polypack Pvt. Ltd. 245 ITR 492 (Del.) iv. CWT vs Allied Finance Pvt. Ltd. 289 ITR 318 (Del.) v. Berger Paints India Ltd. vs CIT 266 ITR 99 (SC) vi. DCIT vs United Vanaspati (275 ITR 124) (AT)(Chandigarh ITAT) vii. Union of India vs Kumudini N. Dalal 249 ITR 219 (SC) viii. Union of India vs Satish Pannalal Shah 249 ITR 221 ix. B.F.Varghese vs State of Kerala 72 ITR 726 (Ker.) x. CIT vs Narendra Doshi 254 ITR 606 (SC) xi. CIT vs Shivsagar Esta....
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....oted that for A.Y. 2003-04, the status of the assessee was non-resident and was accepted by the Department. 10.1 So far as C.O. No.212/Mum/2013 (against the ITA No.5530/Mum/2012) is concerned, it was not pressed by the ld. counsel for the assessee, therefore dismissed as not pressed. 11. Identical is the situation for the appeal of the Revenue in ITA No.5531/Mum/2012 (A.Y. 2004-05), therefore, on the same reasoning, we find no merit in this appeal also, therefore, dismissed. 11.1 Identically, C.O. No.213/Mum/2013 (A.Y. 2004-05) was not pressed by the ld. counsel for the assessee, therefore, it is dismissed as not pressed. 12. The appeal for A.Y. 2005-06 (ITA No.5532/Mum/2012), being on identical ground, is also deserves to be dismissed on the same reasoning. 13. C.O. No.214/Mum/2013 (A.Y. 2005-06) was not pressed by the ld. counsel for the assessee, therefore, dismissed as not pressed. 14. Now, we shall take up ITA No.6143/Mum/2012 (A.Y. 2006-07), wherein, the grounds are identical. However, in this case, the first issue pertains to resident but not ordinarily resident as defined u/s 6(6)(a) of the Act ignoring the report of the Assessing Officer as the assessee w....
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....or more. Although the change is there in the phraseology, there is no change in the prescriptions. Section 4B(c) of the 1922 Act, which did not make any distinction between a "resident" and "resident but not ordinarily resident", in the case of a company, firm or other association of persons, finds no place in the 1961 Act. In the facts of Dr. Surmukh Singh Uppaz v. CIT [(1983) 144 ITR 191 (Punj)], a case under the 1922 Act provisions it was held that the status of the assessee was correctly taken as 'resident but not ordinarily resident' negativing assessee's contention that his status should be taken as 'non-resident'. Enquiry is necessary only if the assessee has been found to be a resident. The enquiry whether or not an individual or a Hindu undivided family is "ordinarily resident" or "not ordinarily resident" is needed only after it is found that he or it is "resident" within the meaning of section 6(1) or 6(2), as the case may be. If it is ascertained, on facts, that the assessee is non-resident, no such enquiry is needed at all. The only difference in the incidence of income-tax on a "resident and ordinarily resident" assessee on the one hand a "re....
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....treated as resident but not ordinarily resident if either of these conditions is not fulfilled [Advance Ruling Application No. P-5 of 1995, In re, (1997) 223 ITR 379, 385 (AAR)]. In the facts of that case, it has been held that the applicant will have the status of a resident but not ordinarily resident for assessment years 1996-97 to 2004-05. Also see, Advance Ruling Application No. P-12 of 1995, In re, (1997) 228 ITR 61,66 (AAR). In Morgenstern Werner v. CIT [(1998) 233 ITR 751, 755 (All), affirmed in CIT v. Morgenstern Werner, (2003) 259 ITR 486 (SC)], the petitioner, a foreign technician has been held to be 'not ordinarily resident'. It is pertinent to note that the proposed abolition (w.e.f. 1-4-1999) of the special category of 'not ordinarily resident' by the Finance (No. 2) Bill, 1998, has been withdrawn by the Finance Minister on 17-7-1998 while introducing in Lok Sabha Notice of Amendments to the Finance (No. 2) Bill, 1998. Thus, such special category has been retained. In Pradip J. Mehta v. CIT [(2002) 256 ITR 647, 654, 656- 57 (Guj), special leave petition granted by the Supreme Court: (2002) 257 ITR (St.) 35 (SC)], it has been held that secti....
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....ding years, and (2) he had been in India for at least 730 days in the previous seven years. Effect of the substitution (w.e.f. 1-4-2004) of section 6(6) by the Finance Act, 2003.-Section 6(6) has newly been substituted (w.e.f. 1-4-2004) by the Finance Act, 2003 (32 of 2003) [for the text of so-substituted section 6(6), see, ante]. On a comparison of the phraseology employed in the then existing section 6(6), and the newly substituted section 6(6), the following points of difference emerge: Sl. No. Section Existing Provision Substituted (1) 6(6)(a) Has not resident Has been a non-resident (2) 6(6)(a) Has not during Has during (3) 6(6)(a) Seven hundred and thirty days or more Seven hundred and twenty nine days or less (4) 6(6)(b) Has not been resident Has been a non-resident (5) 6(6)(b) Has not during Has during (6) 6(6)(b) Seven hundred and thirty days or more Seven hundred and twenty nine days or less To put it differently, according of section 6(6)(a), an individual is said to be 'not ordinarily resident' in India in any previous year if he- -(upto assessment year 2....