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2014 (4) TMI 739 - AT - Income TaxDetermination of the Status of the Assessee – Residential or not – Whether the strict and literal construction of sec 6 and other provisions leads to absurd results which cannot be intended by legislature - Held that:- The proceedings clearly reveal that the repeated impounding of assessee's passport and lodging of criminal case was found to be untenable by courts - This entangled the assessee into spat of litigation, forcing him to stay in India and unwillingly loose his NRI status on strict and literal interpretation of relevant provision - the assessee was restrained by govt. from traveling abroad, compelled to stay in India for more than 180 days - The circumstances were beyond assessee's control and no fault can be attributed to assessee in this behalf – the facts and circumstances create a peculiar situation. No fault can be attributed to assessee who has shown active diligence in defending his legal rights - legislature cannot have enacted the provision with an intention to forfeit the NRI status by unlawfully compelling the assessee not to leave India even if he has found not to have violated the alleged law - assessee was forced to stay in India for a period of more than 182 days by which he lost his NRI status and became liable to enhanced income tax on his global - assessee's case becomes fit where doctrine of forced meajure may be applicable as it was impossible for the assessee to move out of country and therefore doctrine of impossibility of performance is also applicable - This is a fit case where strict legal reading of the provisions regarding residence in India should not be applied - An interpretation or construction should be applied which results in harmonious meaning, equity rather than injustice. For calculation of stay in India for these years the same should be calculated after exclusion of days of wrongful impounding of passport which constitutes forced stay in India - Thus period for which assessee could not travel outside India in above facts and circumstances i.e. from 10.10.2006 to 21-9-2011 i.e. till the passport was finally handed over to assessee and allowed to travel outside India should be excluded - the assessee's residential status is held to be as 'non-resident' for the years – Decided in favour of Assessee. Validity of reference made to Govt. of Mauritius, Jersey and British Islands – Held that:- The direction given to AO does not amount to set aside of the AOs order - CIT(A) has tried to caution the AO to keep the interest of revenue in mind - the appellate authorities should restrict their conclusions to the subject matter and should avoid generalized directions - Such directions are susceptible to be taken to be orders of a higher authority - CIT(A) has deleted the entire addition without any pre condition, therefore, general instructions given to Assessing Officer do not amount to binding order and at best amount to obiter dicta – the observations of CIT(A) are general – Decided against Assessee. Addition made on protective basis – Held that:- As decided in assessee’s own cse for the previous assessment years, it has been held that the CIT(A) has made the addition on protective basis without justification – thus, the alternate retention of addition on protective basis is set aside – Decided in favour of Assessee. Addition on account of excess cash found during search – Held that:- Assessee contended that without considering opening balance and arbitrarily estimating household expenses, the CIT(A)'s action in confirming the action of AO is not justified – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee. Addition on account of investment in renovation of farms – Held that:- The assessee is held to be a non-resident consequently any amount is not taxable in India unless it is deemed to have been received or accrues or arises or deemed to have arisen to assessee in India – As decided in assessee’s own case for the previous years, the order is set aside and the AO id directed to verify as to whether the total amount spent on Sonali Farms exceeded the amount as estimated by the valuer and if any addition is possible under section 69C – Decided in favour of Assessee.
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