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TMI Blog2007 (4) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... a return for the assessment year under consideration declaring income of Rs. 7,77,000. In the return, the assessee claimed that the status was that of a resident. In respect of the interest income of Rs. 3,07,328, he claimed exemption under section 10(15)( fa ) of the I.T. Act. The interest arose from a fixed deposit in foreign currency. While completing the assessment, the Assessing Officer rejected the claim for exemption on the following grounds : ( a )The assessee has claimed the status of resident, whereas the exemption is available only to an assessee who is a non-resident or "not ordinarily resident". ( b )The fixed deposit in the bank was in Indian rupees and not in foreign currency. 3. The assessee appealed to the CIT (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous years preceding the previous year relevant to the assessment year in appeal and therefore according to section 6(6)( a ), he would be "not ordinarily resident". 5. The revenue is in appeal. Section 6(6)( a ) of the I.T. Act is as under : (6) A person is said to be "not ordinarily resident" in India in any previous year if such person is ( a )an individual who has not been resident in India in nine out of the ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more; or ( b )a Hindu undivided family whose manager has not been resident in India in nine out of ten previous years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down in various decisions, namely, S. Marimuthu Pillai v. CIT [1945] 13 ITR 186 (Mad.), K.M.N.N. Swaminathan Chettiar v. CIT [1947] 15 ITR 418 (Mad.), P.B.I. Bava v. CIT [1955] 27 ITR 463 (Travancore - Cochin), and also by the Authority for Advance Ruling AAR No. P5 of 1995, In re [1997] 223 ITR 379 . No doubt, a contrary view has been expressed by the Gujarat High Court in Pradip J. Mehta v. CIT [2002] 256 ITR 647. However, the view propounded in the other judg-ments cited above has held the field for a very long time commencing from the Indian Income-tax Act, 1922 and is also in conformity with the speech of the Finance Member in the Central Legislative Assembly while introducing the relevant amendment Bill and has furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as "ordinarily resident" in India or as the definition of a person who should be treated as "resident but not ordinarily resident". The ambiguity arises as a result of the use of the double negative used in the sub-section. The two interpretations possible are (1)An individual is resident and ordinarily resident in any previous year only if ( a )He has been a "resident" [as per section 6(1)] in nine out of ten previous years preceding that year; and ( b )He has been in India for period or periods amounting in all to 730 days or more during the seven years preceding that year. (2)An individual, though resident, is "not ordinarily resident" in any previous year ( a )Either where he has not been resident, i.e. , has been a no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uched upon in some judicial dicta : See the discussion in Kanga and Palkivala on the " Law and Practice of Income-tax (8th edition), pages 247-248 and Sampath Iyengar s Law of Income-tax (9th edition), pages 869-872" and the cases cited therein. It seems correct to construe the definition as providing that a person will become resident and ordinarily resident only if ( a ) he has been "resident" in nine out of the ten preceding previous years, and ( b ) has been in India for at least 730 days in the seven preceding previous years and that he will be treated as resident but not ordinarily resident if either of these conditions is not fulfilled. The applicant is, therefore, right when he says that he will be having the status of a reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resident". Thus is what the CIT (Appeals) has held and we concur with him. 10. So far as the other condition, namely, that the assessee should have physically present in India for 730 days or more during the seven years preceding the relevant previous year, we find that this condition is satisfied. As per the details given by the CIT (Appeals) the seven years period will be the FYs 1993-94 to 1999-2000 and during these years the assessee was physically present in India for a period aggregating to 1486 days. However, since the assessee has fulfilled only one of the two conditions for being "resident and ordinarily resident", he becomes "resident but not ordinarily resident" within the meaning of section 6(6)( a ) of the I.T. Act. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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