TMI Blog2022 (8) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... ission income from Mauritius and having Non-Resident status under section 6 of the Income Tax Act. The assessee has transferred such funds to India through NRE account at Bank of Baroda, Satellite Branch. Thus the income earned by the assessee accrues or arises or is deemed to accrue or arise into India is not covered under the charging Section 5 of the Income Tax Act. What is not charged u/s. 5 of the Act cannot be taxed u/s. 68 or 69A of the Act. In our considered view, the income of the non-resident is not chargeable under Section 5(2) and the provisions of Section 69A cannot override the provisions of Section 5(2). As relying on FINLAY CORPORATION LTD. [ 2003 (1) TMI 266 - ITAT DELHI-D] we have no hesitation in confirming the order passed by the Ld. CIT(A) and delete the addition being addition made u/s. 69A of the Act. - Decided in favour of assessee. - ITA No. 995/Ahd/2019 - - - Dated:- 27-7-2022 - Shri Waseem Ahmed , Accountant Member And Shri T. R. Senthil Kumar , Judicial Member For the Appellant : Sudhendu Das , Sr. D. R. For the Respondents : S. N. Soparkar , Sr. Adv. , Bandish Soparkar and Parin Shah , A. R ORDER Per T. R. Senthil Kumar , Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank account as undisclosed source of income accrued or arise in India and why not the same be added to assessee's total income. The assessee made a reply on 17.12.2018 explaining that the funds from Bank of Baroda Branch in NRE account were transferred to Satellite Branch, Ahmedabad as assessee is not staying in Mauritius, he could not able to get statement from Mauritius Branch. However as submitted from the Bank of Baroda NRE account, the relevant entries were being explained and source of income were also explained. NRE account is an account maintained in Indian rupees for overseas income, one can repatriate all the funds kept in NRE account. NRE Account to refers to foreign funds deposited with a financial institution which allows for the efficient conversion and transfer of Indian and foreign currency both within and outside India. One cannot deposit Indian rupees into NRE account. Thus the only way to fund an NRE account is through foreign currency remittance, foreign currency deposit, when one visit India or via foreign currency traveler's cheque. Thus, it is clear the source of credit entries in NRE account must be of foreign currency only which is naturally earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate of Origin, Custom declaration etc. to establish Highlife Trading Company is a company in Mauritius from which the assessee has earned commission Income. Further the assessee submitted that the following documents: (1) Bank Account Statement of NRE No. 4782 for the P.Y. 2015-16 (2) Bank Book explaining entry for the F. Y. 2015-16 (3) Application made to Bank of Baroda, Mauritius Branch for telegraphic Transfer of Funds to Bank of Baroda, Satellite Branch, (4) Certificate from Bank of Baroda certifying that the funds had been transferred from Mauritius Branch. (5) Bank Account Statement of Bank of Baroda, Mauritius Branch for the F. Y. 2014-15 F. Y. 2015-16 (6) Swift Copies (MT-103) of each of the above entries from Bank of Baroda, Mauritius. (7) Return of Income for the Assessment year 2017-18 showing the salary income earned from foreign country. 3.2. The Ld. CIT(A) after examining the above documents satisfied that the assessee earning income outside India and the investment of Rs. 3,11,80,920/- from NRE account which was transferred from Mauritius Branch of Bank of Baroda. This amount has been subsequently used by the assessee to inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the source in outside India despite admission of additional evidence by the CIT(A). 5. The Ld. D.R. appearing for the Revenue supported the order passed by the Assessing Officer and held that the additions made by the A.O. is to be restored. 5.1. Per contra, the Ld. Senior Counsel Shri S.N. Soparkar appearing on behalf of the assessee reiterated the arguments made before the ld. CIT(A) and filed detailed Paper Book consisting of Bank Statement of NRE A/c. No. 4782 with Bank of Baroda, Bank Statement of NRO A/c. No. 4847 with Bank of Baroda, Bank book for F.Y. 2015-16 and other details more particularly Bank of Baroda Certificate certifying that funds have been transferred from Mauritius Branch which is available at page no. 17 18 of the Paper Book. Bank Statement from Bank of Baroda, Mauritius Branch for F.Y. 2015-16 2014-15 at page no. 19 to 21 of the Paper Book. The ld. Senior counsel also taken us through Page No. 43 to 63 of Paper Book which contain the copies of invoices from Highlife Trading Company with packing list, Bill of Lading etc. to establish the commission income earned by the assessee. Thus, Ld. Counsel pleaded that the addition made by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken into account in a balance sheet prepared in India. Explanation 2: For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India. Section 6:- For the purposes of this Act,- (1) An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or .................................. 6.3. The assessee has earned the commission income from Mauritius and having Non-Resident status under section 6 of the Income Tax Act. The assessee has transferred such funds to India through NRE account at Bank of Baroda, Satellite Branch. Thus the income earned by the assessee accrues or arises or is deemed to accrue or arise into India is not covered under the charging Section 5 of the Income Tax Act. What is not charged u/s. 5 of the Act cannot be taxed u/s. 68 or 69A of the Act. In our considered view, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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