TaxTMI 
TaxTMI 
2016 (4) TMI 295
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....icable 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. Commissioner of Income Tax (Appeals). Ou....
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....ns, 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 record, assertions made by the ld. respective co....
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....t 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 short stint of working in a trading Pharma Company i....
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.... 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 period 1st Sep. 1998 to 18th June, 2001 not traceable at present. No. of days computed for the period 1st April 1998 to 31st August 1998. 1999-00 1998-99 N.A. N.A. Passport for period 1st Sep....
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....f 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 from HDFC Bank Ltd. Rs. 50,00,000/- balance Direct Remittance from abroad 6 Residential house in U K at 3 Civic Way, Ilford, IG6 1HF in joint name of Binod Singh & Mrs. Sheila Singh 02/09/2007 (correct dated is 31/03/2003 1,44,995/- GBP (Rs.1.25 crores approx) Partly thru loan by mortgage (Addition made in 2008-09 is incorrect 7 Tivoli, Flat No. A-2702, B-2702, C-2702, D 2702 (amalgamated) Hiranandani Gardens Near Hiranandani Busin....
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....r 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 24/07/2008 17/11/2008 / 18/11/2008 3 2005-06 24/07/2008 17/11/2008 / 18/11/2008 4 2006-07 24/07/2008 17/11/2008 / 18/11/2008 5 2007-08 24/07/2008 17/11/2008 / 18/11/2008 6 2008-09 24/07/2008 17/11/2008 /18/11/2008 7 2009-10 NIL 27/04/2010 / 12/05/2010 The period of stay of appellant in India as computed and verified from original passports for A.Y.'2007-08 to 2009-10 as accepted by the AO in the Original assessment order is as under:- Date of arrival -Dt. of departure as per immigration seal Previous Year No. of days in India Page no. in the Origi....
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....0 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 passport along with the details of no. of days of stay in India. The Assessing Officer have already discussed residential status of the assessee in details in the Assessment Order which reveals that the status of the assessee is "resident and ordinarily resident' and not as 'nonresident' as claimed by the assessee. No further verification is required in the above ground". That during the course of appellate proceedings the appellant filed the petition for additional evidence on November 11,2011 in terms of Rule 46A of the Income Tax Rules, 1962, along with a paper book containing 75 pages, constituting the additional evidence. The said additional evidence, inter alia contained evidence in respect of:- Stay in UK comprising of telephone/utility/credit card statement of UK, children, undergoing education abroad Copy of tax return filed in UK relating to rental income....
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....8/04/08 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 it is arrived at 25 days 24 02/11/08 13/11/08 12 (Z-1023582) As per assessee the no.of days stay in India is 11. However, on Calculation, it is arrived at 12 days 11 13/12/08 04/01/09 23 (Z-1023582) As per assessee the no.of days stay in India is 22. However, on Calculation, it is arrived at 23 days 22 20/03/09 31/03/09 12 Z- 1023582 11 Total 75 The appellant filed his written reply to the Remand Report submitting what he had stated during course of hearing on March 26, 2012, in which Shri U.N. Marwah, FCA counsel of the appellant and the AO were present. Shri Marwah pointed out that the statement of the AO that the appellant had not produced the original passport nos. Z-1023527, A-1280977 was incorrect and in presence of the AO the original passports were again produced. The AO accepted this fact as he stated that he was referring to non-production of the original passports bearing nos.Z-1023582 and U925873. The pointed out that the passport no. Z-1023582 was produced in the assessment proceeding....
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.... which enable him to dispose of the appeal Tribunal found that the documents produced were necessary for disposal of the appeal on the merits. However, before admitting the additional evidence, the CIT(A) has to give opportunity to the Assessing Officer to consider or cross examine or rebut the additional supporting evidence furnished by the assessee. In the following cases, the Courts had occasion to consider under what circumstances, the additional evidence can be entertained by the Appellate Authorities. Electra (Jaipur)(P) Ltd Vs Inspecting Assistant Commissioner (Delhi) 26 lTD 236 Whether if evidence produced by assessee is genuine ,reliable and proves assessee's case ,then assessee should not be denied opportunity of it being produced even if he first time produces before appellant authority-held yes. Smt .Prabhavati S.Shah Vs CIT (Born) 2311TR 1 Production of additional evidence -Assessee taking loans from 2 creditors -ITO treating loans as Income from undisclosed sources as summons could not be served on creditors - ITO treating loans as income from undisclosed sources as summons couldn't be served on creditors -Assessee wanting to genuineness of loan by relying....
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....007-08 to 2009-10 shall be 96, 173 and 75 days respectively as against 100 days, 178 days & 80 days determined by the AG. 5. Ground No. l: "1.1 That on facts and in law the Learned AO erred in framing an assessment u/s 143(3)1153.4 determining the status of the appellant as "resident" as against "non-resident" declared by the appellant and accepted as such in earlier years. 1.2 While determining the status of the appellant as "resident", the Learned A 0 has erred in..- (i) Holding that clause (b) of explanation to Section 6(1)(c) is not applicable to the appellant. (ii) Holding that the appellant has failed to discharge its onus of establishing that his stay in India during the year was less than 182 days. (iii) Holding that the appellant was in fact permanently residing in India and undertook visits abroad. (iv) Holding that nothing was brought on record to indicate that the appellant was permanently settled abroad. 1 7 That while determining the status of the appellant as "resident and ordinarily resident' the Learned A. 0. has failed to consider the period of stay of the appellant in India in the preceding nine / seven years, nor appreciate the provisions of Se....
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....ut in the above said letter. (See at point no.3 of para no. 20(c) of this order). The assessee has only furnished the date of departure from India but has not furnished the date of arrival in India."In view of this, it is concluded that the assessee has failed to substantiate his claim of Non-Resident status. Therefore, the assessee claim is rejected and he is treated as Resident and Ordinarily Resident for the purpose of this AY. Thus in brief (i) AO analysed the provisions of section 6(1)(c) and held that if a person stayed in India for more than 182 days or in preceding years the person is in India for more than 365 days and in that year for 60 days or more the individual will be treated as resident. The AO did not have complete details in respect of the period of stay for financial year 2002-03, 2001-02, 2000-2001 and 1999- 2000 and hence NRI status cannot be granted. The AO also invited intention of the appellant to explanation B of section 6(l)(c). The AO also held that the word Visitor means who comes and goes or meets a person but a person who has a residence and place of work in India cannot be treated as a visitor. The appellant has residence, place of work, parents st....
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....riod of stay of the appellant during AY 2007-08 to 2009-10 is less than 182 days in each of the years , the issue for adjudication on the basis of the aforesaid are:- Whether the provisions of Explanation (b) of Section 6(1)(c) applicable in the case of the assessee for the A.Y.'s 2007-08 to 2009-10 and can it be said that the assessee is entitled, on merits, for the benefit of 182 days as stipulated in the said explanation. Whether determination of Status can be considered in reassessment u/s 153A, in absence of any incriminating material found during course of search which would warrant a change thereof? Section 6(1) is reproduced as under: An individual is said to be resident in India in any previous year, if he:- Is in India in that year for a period or periods amounting in all to one hundred and eighty two days or more; or Having within the four years preceding that year been in India for a period of periods amounting in all to three hundred and sixty five days or more, is in India for a period or periods amounting in all sixty days or more in that year. Explanation-In the case of an individual:- Being a citizen of India, who leaves India in any previous year [as a m....
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....of Indian origin, comes on a visit to India. In other words, if any of the above three categories of individuals stay in India for less than 182 days in the relevant previous year he shall be regarded as a non-resident in India in that previous year and the test of stay in India for 365 days or more in the four preceding previous year as laid down in Section 6(l)(c)shall not apply to him. The special benefit of extended stay upto 182 days is given for all Indian Citizens/PIO, whereas all Non-Indian Citizens are governed by the restricted number of days as specified in 6(1)(a)-182 days or 6(l)(c)-365 days in four preceding years and 60 days in that year. The legislative amendments to Section 6 have been made by The Direct Tax Laws (Second Amendment) Act, 1989 - New Explanation has been substituted in Section 6(1)(c) for the then existing Explanation, with effect from 1st April, 1990, i.e. for and from Assessment Year 1990-91. On a comparison of the two Explanations, it may be seen that clause (a) of the new Explanation is, in substance, the same as clause (a) of the then existing Explanation. Clause (b) of the new Explanation also takes within its ambit a person of Indian origin....
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....nd eighty-two days. This is because the non-resident Indians, who have made investments in India, find it necessary to visit India frequently and stay here for the proper supervision and control of their investments. The Finance Act, therefore, has amended clause (b) of the Explanation to Section 6(1)(c) of the Income Tax Act, in order to extend the period of stay in India in the case of the aforesaid individuals from one hundred and fifty days to one hundred and eighty-two days, for being treated as resident in India, in the previous year in which they visit India Thus, such non-resident Indians would not lose their 'non-resident' status if they stay in India, during their visits, upto one hundred and eighty-one days in a previous year." The judicial authorities have had occasion to consider the implications of Section 6 of the Income Tax Act read with various Explanations which are as under: CIT Vs Avtar Singh Wadhwan, 247 ITR 260 (Born.) "Section 6 indicates the meaning of residence in India. Section 6 lays down that for the purpose of the Income Tax Act an individual is said to be resident in India if he is in India for a prescribed period. Therefore section 6 emphasi....
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....slims, Parsis and other irrespective of the personal law governing them. CIT v Dhote (B.K.) (1967) 66 ITR 457 (SC) Also see Moosa S. Madht & Azam S. Madha v. CIT 89 ITR 65 (SC). Onus to prove stay in India with department: The onus of proving that the assessee was in India during the four years preceding the previous year for a period or periods in the aggregate of not less than 365 days, and was in India for at least 60 days during the previous year, lies on the department. Pradip J Mehta Vs CIT (2008) 300 ITR 231(SC) Interpretation of taxing statutes - Where 2 interpretations possible- Court will adopt that in favour of taxpayer. Dhruv Choudhrie, Appeal No. 90/0809. A. Y. 2005-06 The Commissioner of Income Tax (Appeals) -XXIX, New Delhi vide Order dated 03.07.2009 on facts which are similar to that of the appellant has after due analysis of the provisions of Section 6 of the Income Tax Act recorded a finding that residential status is determined on the basis of physical presence of an assessee in India. Sudhir Sareen Appeal No. 490/09-10 CIT (A)-1, New Delhi. Order dated 31.03.2011 Held, on identical facts "Para 1.9" The Legislature has been granting the benefit of extende....
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....t in the case of Keshavji Ravji & Co. reported in 183 ITR Pg. 1 at Page 17 has observed as under; "However, circulars beneficial to the assessees and which tone down the rigour of the law issued in exercise of the statutory power under Section 119 of the Act or under corresponding provisions of the predecessor Act are binding on the authorities in the administration of the Act." Navnit Lal C. Javeri 56 ITR 198 (SC), Navnit Lal Amba Lal vs. CIT 105 ITR 735 (Born.), Dattatraya Gopal Shette vs. CIT 150 ITR 460 (Born.), CIT V. T.V. RAMANAIAB & SONS (1986) 157 ITR 300, 307 (A.P) Circulars are binding on all Officers and persons employed in the execution of the Income Tax Act. Even if the Circular may amount to a deviation of a point to law conferring benefit to a assessee the same is binding on the department. Relying on the aforesaid judgments, the appellant submits that the Assessing Officer erred in rejecting the appellant's claim based on the Circular No. 684 of 1994 explaining section 6(1)(c) r.w. Explanation to Clause (e) to section 115C of the Income Tax Act, 1961. The status of the appellant, therefore, should have been considered as Non Resident. The decision of the Ass....
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....new passport can be issued on final expiry or up to one year before final expiry of any passport issued for 10 years. Following are required:- Application form duly filled in (click here to download form) Original passport (current/ expired) including any additional booklets issued Latest identical coloured passport size photographs (four). There is a coin-operated Photo Me machine installed in the Public Hall of the Consulate building (1st floor) which gives photographs of the required size at a charge of GBP3.50. This facility is open to public on all working days of the Consulate during the public hours. Self-addressed special delivery envelope (in case return of passport is desired by post) Fees The above clearly shows that passport could be issued to an Indian National by Indian Embassy in any country. Accordingly, the appellant was issued such passport by Indian Embassy 'in Kyiv, Ukraine and from London. This shows that the appellant was not in India at that point of time and was in Ukraine and United Kingdom. The learned counsel in order to establish that the appellant was settled abroad has filed and pleaded:- That the appellant was initially residing in Ukraine i....
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....of tax sops extended to NRIs, an individual must satisfy the following criteria A person who has been in India for 60 days or more during a financial year and 365 days or more during the preceding four financial years qualifies as a 'Resident' of India. This has been relaxed and can be extended to 182 days. Not meeting this criterion qualifies the individual for a "non-resident" status. NRIs based outside India can continue to enjoy non-resident status in India if their presence in India is more than 60 days but less than 182 days, even if their stay in India during the past four financial years is 365 days or more Having been deputed overseas for over 6 months also qualifies an individual for NRI status. The relaxation to 182 days applies to: Indian crew members sailing overseas on Indian ships - their stay abroad is treated as employment outside India In the case of Indian citizens as well as in the case of "Persons of Indian Origin" who are settled abroad but visit India for personal reasons. The concession of extended stay is available only to Indian citizens or to "persons of Indian origin" A "Person of Indian origin" is a person who is not an Indian citizen, bu....
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....d the days of his visit to India from 19th August 2004 to 6th September 2004.The assessee came back permanently to India on 31st January 2005. The assessee was held to be resident as his stay during the relevant previous year exceeded 60 days and stay during the four years immediately preceding the relevant previous year was more than 365 days. During the course of proceedings before the ITAT, an alternative contention was raised on behalf of the assessee. It was contended that period of 60 days referred to in section 6(1)(c) of the Act should exclude the period of stay in India while on a visit and that non-acceptance of this contention would lead to an absurd result Two examples were given in this regard: Example A: A person (citizen of India / PIO) who comes on a visit to India and stays in India for 120 days would be treated as non-resident, as the threshold in his case for being treated as resident in India would get extended to 182 days instead of 60 days by virtue of clause (b) of the Explanation. Example B: If a person (citizen of India /P10) comes on visit and stays in India for 90 days and returns abroad and later on comes back to India permanently and he stays in India....
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....c). By holding so, the Tribunal accepted the alternative contention of the assessee and held that for the purpose of computing the period of 60 days as mentioned in section 6 (1) (c), the period of visit to India would be excluded and assessment shall be done considering his status as 'non-resident'. The above said finding of fact, cannot at all said to be perverse and arbitrary as it is well-founded and all the material available have been taken into consideration by the Appellate Authority and the Tribunal. Therefore, no substantial question of law arises for consideration in this appeal. Accordingly, appeal is dismissed. It is now relevant to understand the meaning of the word 'visit' and the context in which the same has been used in the explanation (b) to section 6(1)(c). As per Income Tax Act, first it should be determined whether a person is a resident or a non-resident. If a person is a nonresident, then one has to see whether a person is an NRI or not. Graphically, the position can be explained as under Person Resident or Non-resident NRI OR Non-NRI As per the income tax act - section 6(1), it is the number of days which determine the residen....
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....d to VISIT Synonyms: call (on or upon), drop in (on), see Antonyms: avoid, shun In the instant case, the AG has held that the visit to India cannot be for the purpose of looking after his business and stay at his own home/residence in India. However, in the absence of the definition being provided of the word 'visit' in the Indian Income Tax Act, 1961, the above definition can be adopted. The above definition covers the business, social, inspection, temporary visits. Therefore, it can safely be said that the purpose of visit is immaterial as far as the Income Tax Act is concerned. In the case of Pradip J. Mehta vs CIT (2002) 175 CTR 394 (Guj) it was held on 3 May, 2002, as under: "From the condition of not being resident in India in nine out often preceding years laid down in sub-section (6) of section 6, it does not automatically follow that for being ordinarily resident in India, one should be resident in India for eight years. A resident in India will be an ordinarily resident in India unless he qualifies to be a 'not ordinarily resident in India' under section 6(6)(a). Ordinary residence is the country where a person normally lives or makes habitual visits....
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....that he should not have during the seven years preceding that-year, been in India for a total period of seven hundred thirty or more days. The Tribunal has found as a fact that the assessee was a resident in India for eight years out often preceding years and his case, therefore, cannot fall under the first part of clause (a) of subsection (6) of section 6 of the Act. His case will also not fall in the second part of that clause, because, in the seven years preceding the relevant previous year, the assessee had been in India for o ze thousand four hundred and two days, i.e., much more than seven hundred thirty days being the upper limit referred to in that clause. For the above reasons, we are of the opinion that the Tribunal was justified in holding that the status of the assessee for the year in question was not that of "not ordinarily resident" as claimed by him, and that it has not committed any error in interpreting the provisions of section 6(6) of the Act. The question No. I referred to us is therefore answered in the affirmative in favour of the revenue and against the assessee and the question No. 2 is answered in the negative in favour of the revenue and against the a....
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.... he shifted to England but his business interest continued in Ukraine, Russia and CSI countries. Thereafter, the assessee acquired further properties in UK, the addresses of which are provided in para 1.3 of the said letter. Thereafter, the assessee continued his business in Ukraine and his primary source of income was business ventures/investment made in Ukraine, USSR and CSI countries and Cyprus. 2.5. Now, we shall deal with the allegation of the Department that original passport was never produced by the assessee. As is evident from the record and the remand report sought by the ld. Commissioner of Income Tax (Appeals) from the Assessing Officer, it is evident that in fact, the assessee produced the original passport before the Assessing Officer and also before the ld. Commissioner of Income Tax (Appeals), the details of which are summarized hereunder along with their validity:- Sr. No. Passport No. Place of issue Validity 1. R-691005 KIEV /UKRAINE 30/06/1994 to 31/08/1998 2. A-1280977 KYIV/UKRAINE 19/06/2001 to 21/01/2008 3. Z-1023527 KYIV/UKRAINE 14/05/2003 to 21/01/2008 4. Z-1023582 KYIV/UKRAINE 23/08/2006 to 10/08/2016 5. H-3291213 L....
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....port 2003-04 2004-05 261 104 Non- Resident (As per Section 6(1)(c) read with explanation 'b) Period computed from Original Passport. Stayed in India for less than 182 days for each previous Year & Continuously resident abroad 2004-05 2005-06 187 178 2005-06 2006-07 223 142 2006-07 2007-08 265 100 2007-08 2008-09 188 177 2008-09 2009-10 288 77 It is noteworthy that during the search operation and thereafter also, the assessee was never confronted by the Assessing Officer with the help of any relevant material, seized during search, justifying the change of status of the assessee from non-resident to resident. The details of period of stay, in India, by the assessee is tabulated hereunder (as is evident from record) for ready reference:- Date of Arrival & Departure No. of days in India Grand Total no. of days Relevant A.Y. Reference 26/12/1994 to 23/01/1995 28 28 1995-96 Commissioner of Income Tax (Appeals) order for A.Y. 2003-04 Page- 10 31/03/1995 to 04/04/1995 5 59 1996-97 07/04/1995 to 14/04/1995 7 24/10/1995 to 02/11/1995 9 21/12/1995 to 18/01/1996 28 09/....
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.... to 04/01/2009 22 20/03/2009 to 31/03/2009 11 Based upon the above details, relevant to provisions of the Act, the year wise residential status/position of the assessee is summarized hereunder:- A.Y. F.Y. No. of days in India during the year Status in terms of section 6(1)(a) and 6(1)(c) If resident whether covered by section 6(6)(a)( Yes/No) "Not ordinarily Resident 1995-96 1994-95 28 Non-Resident Not applicable 1996-97 1995-96 59 Non-Resident Not applicable 1997-98 1996-97 28 Non-Resident Not applicable 1998-99 1997-98 19 Non-Resident Not applicable 1999-2000 1998-99 39 Non-Resident Not applicable 2000-01 1999-00 123 Non-Resident Not applicable 2001-02 2000-01 57 Non-Resident Not applicable 2002-03 2001-02 150 Non-Resident Not applicable 2003-04 2002-03 159 Non-Resident Not applicable 2004-05 2003-04 162 Non-Resident Not applicable 2005-06 2004-05 174 Non-Resident Not applicable 2006-07 2005-06 209 Resident Yes resident but not ordinary resident (refer note (ii) 2007-08 2006-07 96 Non-Resident Not applicable 2008-09 2007-08 173 ....
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....on to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of subclause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted. 29[Explanation 2.-For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.] If the factual position and the aforesaid provision of the Act are kept in juxtaposition, the incidents of tax depend upon the residential status of the assessee in India. In case of "Non-resident" only "income arose in India" i.e. income received or deemed to be received in India are taxable in India. "Foreign income" is not taxable in India. Business income in case of business, which is controlled 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 taxab....
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....he Assessing Officer. On the other hand, the ld. counsel for the assessee, explained that these are own funds/accumulated earning over a period of many years were remitted from these banks by the assessee. The conclusion drawn in the impugned order was defended. 3.2. We have considered the rival submissions and perused the material available on record. we find that the issue of foreign remittance has been discussed in para 24 (page 29) of the assessment order by holding that the assessee refused to explain the source and the nature of the remittances, therefore, the ld. Assessing Officer treated the remittance as unexplained credit u/s 68 of the Act and added to the total income of the assessee. The stand of the assessee is that necessary details were filed by the assessee before the Assessing Officer and if he was not satisfied with the explanation of the assessee, he should have asked for further details. We note that before the ld. Commissioner of Income Tax (Appeals), the assessee filed 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 th....
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....ach companies, confirming that remittance were made at the instance of the assessee to whom substantial amounts were owed by them, certificate of incorporation of the said companies, confirmation that the amounts are not loans but were own funds, due from the said companies, thus, in the absence of any adverse material, we affirm the finding of the ld. Commissioner of Income Tax (Appeals). Even otherwise, addition u/s 68 can be made only when the three ingredients, contained in the section, are not satisfied by the assessee. The Revenue has not produced any material that the assessee violated the provision of the Act. Even otherwise, we are satisfied that the assessee has fulfilled the conditions enshrined in section 68 of the Act as identity, capacity and genuineness of the transaction has been satisfactorily explained by the assessee. The assessee has proved the source of receipt of the impugned amounts. We are aware that initial burden is upon the assessee to prove the source of such 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 sh....
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.... of Income Tax (Appeals) that no person should be condemned unheard and right to confront/cross examination is the inherent right of a person against whom allegations are made. The ratio laid down in following decisions supports the case of the assessee and also our view. i. Rajesh Kumar vs DCIT (2006) 287 ITR 91 (SC) ii. CIT vs Dhrampal Premchand Ltd. 295 ITR 105 (Del.) iii. PrakashChand Nahata vs CIT (2008) 301 ITR 134 (MP) iv. CIT vs SMC Share Brokers Ltd. (2007) 288 ITR 345 (Del.) 4.4. The crux of the ratio laid down by Hon'ble High Courts and also by Hon'ble Apex Court are that the assessment proceedings are part of judicial process, thus, attract principle of natural justice and any evidence which is put forth against the assessee has to be confronted to the assessee subject to right of cross examination. The relevant portion of facts and decision in the case of Prakashchand Nahata (supra) is reproduced hereunder:- "On a bare reading of the said provision 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 c....
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....asis of a report obtained from the research institute, namely, Shri Ram Institute for Industrial Research, New Delhi. The assessee had filed objections thereto and requested to crossexamine the analyst. The Assessing Officer did not pay any heed to the same and proceeded to pass order of assessment. The order of assessment was assailed by the assessee before the Commissioner of Income-tax (Appeals) and a contention was raised that request to cross-examine the analyst had not been allowed. The Commissioner of Income-tax (Appeals) accepted the contention of the assessee and concluded that the Assessing Officer had wrongly avoided granting permission to the assessee to cross-examine the analyst and held that the order of assessment is vitiated in law. 4.9. In the case of Prakashchand Nahata (supra) the Revenue preferred an appeal before the Tribunal and the Tribunal dismissed the appeal on the ground that in the absence of grant of permission to cross-examine 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 he....
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....of the Act empowers the Assessing Officer to ensure the attendance of any person. When the statement of Mohd. Rashid was used against the assessee and an affidavit was filed controverting the same, we think, it was obligatory on the part of the Assessing Officer to allow the prayer for crossexamination. That would have been in the fitness of things and in compliance with the principles of natural justice. The Hon'ble High Court of Madhya Pradesh concluded as under:- "In view of the aforesaid we answer the reference holding that as the Assessing Officer had not summoned Mohd. Rashid, the proprietor of M/s. Rashid and Co., Jabalpur, in spite of the request made under Section 131 of the Act, the evidence of the said Mohd. Rashid could not have been used against the assessee and in the absence of affording a reasonable opportunity of being heard by summoning the said witness the assessment order is vitiated and cannot be saved as the addition 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....
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....ent addition, whereas, the ld. counsel for the assessee defended the conclusion arrived at in the impugned order. 6.1. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder the documents/proof filed before the ld. Commissioner of Income Tax (Appeals), which was claimed to be additional evidence by the Department:- "property at 9HZ, Hadrian Way, Chilworth, Southampton, U.K. (GBP 7,75,000)-Rs. 7,00,00,000/-. Copy of Loan Sanction Letter (4,80,000 GBP) for purchase and against hypothecation of the property at 9HZ, Hadrian Way, Chilworth, Southampton, U.K. being part of the source for the purchase. Copy of Loan Sanction Letter (2,11,200 GBP) for purchase of the aforesaid property and against hypothecation of property at 29, Rushden Gardens Ilford, Essex, U.K. being part of the source for the purchase. The appellant 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 ....
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.... kept in juxtaposition and analyzed, there is categorical finding in the impugned order that the source of investment made by the assessee was established/proved and the assessee during the relevant period was non-resident. It is also noted that the accounts of the assessee were opened and operated in the status of "non-resident". This factual matrix was also consented to be correct by the Department. It is also noted when any accounts in the status of non-resident are opened at that stage even the bank authorities analyze the passport and other documents of the assessee. We further note that for initial years, the status of the assessee as non-resident was accepted by the Department itself. During hearing, the ld. CIT-DR, fairly admitted that for A.Y. 2005-06, the assessee was assessed as non-resident, therefore, without bringing any contrary material, on the principle of 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 C....
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....see, therefore, it is dismissed as not pressed. 9. Now, we shall take up ITA No.4598/Mum/2012 (A.Y. 2009-10), the appeal of the Revenue, wherein, identical grounds have been raised. We have made elaborate discussions on facts on the issues in hand in preceding paras of this order, therefore, on the same reasoning, we find no merit in this appeal also, therefore, dismissed. 9.1. The Cross Objection no.150/Mum/2013 (against the ITA No.4598/Mum/2012) was not pressed by the ld. counsel for the assessee, therefore, it is dismissed as not pressed. 10. So far as, the appeal of the Revenue for A.Y. 2003- 04 (ITA No.5530/Mum/2012) is concerned, identical ground have been raised, therefore, on the same reasoning as discussed in preceding paras of this order, on identical facts/grounds, this appeal of the Revenue is dismissed. It is also noted 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....
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.... to be enacted in the 1961 Act. 16. Section 6(6) consists of two limbs. It does not define "ordinarily resident" but defines, in negative, "not ordinarily resident". On reading the corresponding provisions in the two Acts, it seems that there is little substantial change in the provisions. Clause (a) makes an individual "not ordinarily resident" if he has not been resident in India in nine out of the ten preceding previous years or has not, during the seven preceding previous years, been in India for a total period of at least 730 days or more. Clause (b) makes a Hindu undivided family "not ordinarily resident" if its manager* has not been resident in India in nine out of the ten preceding previous years or has not, during the seven preceding previous years, been in India for a total period of at least 730 days 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 [....
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....61, and to state that the Department's view has all along been that an individual is "not ordinarily resident" unless he satisfies both the conditions in section 4B(a), i.e.,- (i) he must have been a resident in nine out of ten preceding years; and (ii) he must have been in India for more than two years in the preceding seven years. Thus, a person will be "resident and ordinarily resident" if both these conditions are satisfied but he will be "resident but not ordinarily resident" if either of those conditions is not satisfied.' Thus, a person will become resident and ordinarily resident only if (a) he has been 'resident' in nine out of ten preceding previous years, and (b) has been in India for at least 730 days in the seven preceding previous years; and he will be 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, ....
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....e., much more than 730 days being the upper limit referred to in that behalf. Therefore, the High Court was of the opinion (p. 657) that the Tribunal was justified in holding that the status of the assessee for the year in question was not that of 'not ordinarily resident' as claimed by him and that the Tribunal has not committed any error in interpreting the provisions of section 6(6). Reversing the decision of Gujarat High Court [256 ITR 647 (Guj)], in Pradip J. Mehta v. CIT [(2008) 300 ITR 231 (SC)], it has been held that the assessee was 'not ordinarily resident' in India within the meaning of section 6(6)(a) as he was not resident for 9 out of 10 years. A person would become an ordinary resident only (1) if he had been residing in India in 9 out of 10 preceding 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)....