TaxTMI 
TaxTMI 
2025 (3) TMI 919
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee was asked to furnish documentary evidence in support of his claim being non-resident of India during the year under consideration. 2.2 The Assessee filed certain documents viz a viz copies of employment contracts for different periods in support of his claim qua services being rendered by the Assessee outside India. Further, the Assessee has claimed that the Assessee during the year under consideration remained out of India for a period of 210 days in total for the purpose of employment and therefore remained in India for a period of 156 days (366-210) since the year involved 2016 was leap year and therefore the Assessee has rightly claimed the status of Non-resident of India and the income of Rs. 1,26,91,190/-inter- alia income comprises salary of Rs. 86,21,402/- and NRI interest income of Rs. 2,77,787/- as exempt income from taxation in India. 3. The AO though considered the claim of the Assessee, however, excluded the stay of 28 days in the USA and accepted the remaining period of 182 days spent by the Assessee out of India for the purpose of employment and ultimately treated the status of the Assessee as "resident of India" being stayed in India more than 182 days in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther words, if a citizen of India leaves India during the Previous Year 2015-16 consisting of 366 days for the purpose of employment for at least 185 days, then his period of stay in India would be less than 182 days and accordingly the citizen of India would be considered as non-resident in India as per the provisions of Section 6(1)(c) rws section 2(30) of the Act. However, as per details available with this office and as discussed herein above, the assessee was outside India for the purpose of employment for 181 days only and for 28 days in the U.S.A. for purposes other than employment. D. In view of the above, the assessee leaves India during the Previous Year under proceeding partly for the purpose of employment and partly for the purpose other than employment. However as per the Explanation 1(a) to section 6(1)(c) of the Act, stay in India for 182 days or more is required for a citizen of India to be resident in India who leaves India during the Previous Year for the purpose of employment only. Here, in the instant case, the assessee being the citizen of India leaves India for a period of 181 days only for the purpose of employment during the Previous Year 2015-16 as again....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idering the assessee to be resident in India. Thus, total addition of Rs. 88,99,189/ being the salary income of Rs. 86,21,402/- and NRE interest income of Rs. 2,77,787/- is hereby made to the total taxable income of Rs. 10,87,740/- declared by the assessee in the revised Return of Income filed on 16.07.2017. Penalty proceeding u/s. 271(1)(c) rws 274 of the Act is hereby separately Initiated for furnishing inaccurate particulars of income. 12. Subject to the above discussion, the total income of the assessee is hereby assessed as under: Total income as per the revised Rs. 10,87,740/- Return of Income filed on 16.07.2017 Add: Salary income (as discussed above) Rs. 86,21,402/- Add: NRE interest income (as discussed above) Rs. 2,77,787/- Total Income Rs. 99,86,929/- 4. The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner, who by considering the claim of the Assessee, declined to entertain the same mainly on the following reason: "I agree with the stand taken by the A.O. that the applicant is resident in India for the A.Y. 2016-17 as per the provisions of section 6(1)(c) of the Act. That there is difference between employment and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of days of stay outside India for the Appellant works out to 211 days. 3. In the above circumstances the period of stay of the Appellant in India will work out to 183 days worked out as under: Total number of days in FY. 2015-16 (April 2015 to March 2016) 366 days (2016 being Leap year February will have 29 days) (211 days less 28 days) LESS: No of days of stay outside India 183 days NO OF DAYS OF STAY IN INDIA 183 days In the above circumstances the assessee during the AY under consideration was a resident in India. 4. With regard to the issue whether the Appellant's stay in USA for 28 days during the period from 28.04.2015 to 26.05.2015 has to be considered as stay outside India for the purpose of employment it is submitted as under: The issue of whether the term 'employment outside India' includes 'doing Business' by the taxpayer, came up for consideration before the Hon'ble Kerala HC in CIT v/s Abdul Razak, (2011) 337 ITR 350 (Kerala) wherein the Hon'ble Court while deciding the issue in favour of the taxpayer took into consideration the CBDT circular no 346 dated 30/06/1982 and held that no technical meaning can be assigned to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a resident in India. 6.6 Explanation 1 prescribes: if an individual being a citizen of India leaves India as a member of crew of an Indian ship or for the purposes of employment outside India for 182 days, then 60 days is to be substituted by 182 days for considering the stay in India within that year 6.7 During the year under consideration, admittedly the assessee stayed in India only for a period of 156 days (365-210) and thus claimed that he has stayed in foreign country for a period of 210 days in total for the purposes of employment. However, both the authorities declined to accept the claim of the assessee, mainly on the reason that the Assessee left India for the USA for 28 days for the purposes other than employment as the Assessee went to USA for seeking career and business opportunities and has not produced any employment contract/appointment letter or salary slip for the period of 28 days. 6.8 On the aforesaid facts and considerations, following question emerge: "Whether the Assessee who went to a foreign country in search of employment and stayed in India for a period less than 182 days in the preceding year, is entitled to claim the exemption qua income earned out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n exception to Section 6(1)(c) of the Act, under which 60 days residence referred to in clause (c) is substituted to 182 days if the assessee went abroad in the previous year for the purpose of employment. Admittedly, the assessee went abroad on 24/09/1988 only to take up business there. If the business undertaken and carried on by the assessee in the previous year abroad amounts to employment within the meaning of explanation (a) to Section 6(1) (c) of the Act, then the assessee is entitled to the status of non- resident declared by the CIT (Appeals), which is confirmed by the Tribunal. 5. The contention of the learned senior counsel appearing for the Revenue is that employment necessarily involves employer employee relationship with terms of employment and only under an employer a person can be employed. Learned senior counsel appearing for the assessee, on the other hand, contended that employment in the context of explanation(a) includes self- employment, and taking up and continue business is also employment for the purpose of the above explanation. 6. During hearing, learned senior counsel for the revenue has relied on the decision of the Supreme Court in Lakshminarayan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ken up by the assessee abroad. We therefore dismiss the appeal filed by the revenue." 6.11 The Hon'ble Co-ordinate Bench of the Tribunal as well, in the case of Suresh Nanda vs. ACIT, Central Circle 13, New Delhi (2012) 23 taxman.com 386 (Delhi) also dealt with an identical issue and has held that residential status of the person for the purpose of section is to be determined only on the basis of number of days stay in India and there is no restriction for number of days spent abroad and if the period of stay in India is less than 182 days then the status to be applied, would be of non-resident and his global income cannot be taxed in India in such case. 6.12 Further, the Hon'ble High Court of Delhi in the case of CIT Vs. Suresh Nanda (2013) 352 ITR 611 (Del) affirmed the aforesaid judgment by reiterating as under: "That it is apparent that section 6(1)(c) makes it clear that an individual would be a resident of India in any previous year if he was in India in that year for a period or periods amounting in all to 182 days or more. The respondent/assessee, clearly, is not such an individual because in none of the years in question did, he stay in India for 182 days or m....