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2016 (4) TMI 295 - ITAT MUMBAI

2016 (4) TMI 295 - ITAT MUMBAI - TMI - Status of the assessee as “non-resident” - period of stay - resident or non resident - Held that:- The assessee furnished certain copies of documents, evidencing that during F.Y. 2002-03 to 2008-09, he was domiciled in U.K. The documents relates to school certificate of his daughter, son, electricity bills, club cards, property documents, etc. It is also noted that for A.Y. 2007-08, the contention of the assessee as well as other details, contention of the .....

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Income Tax (Appeals) himself examined the evidence with respect to remittance which were supported by FIRC, issued by bank in India, remittance advice of a foreign bank, confirmation of each 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 .....

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factorily 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 shifts to the Revenue to prove otherwise, consequently, we find no merit in the argument of the Department with re .....

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er controverted by the Department nor any adverse material was produced before us, in support of the assertion made by the Revenue, consequently, the assessee is not an ordinary resident, thus, we affirm the stand of the ld. Commissioner of Income Tax (Appeals). - Cross Objections Nos.148 to 150/Mum/2013 (Arising out of ITA NOs.4596 to 4598/Mum/2012) ,Cross Objections Nos.212 to 214/Mum/2013 (Arising out of ITA NOs.5530 to 5532/Mum/2012), Cross Objections No.267/Mum/2013 (Arising out of ITA NO. .....

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ITA No.4597/Mum/2012), wherein, first ground raised by the Revenue pertains to deleting the addition of ₹ 57,40,09,054/- by the ld. First Appellate Authority by holding the status of the assessee as non-resident without appreciating that clause-(b) of Explanation to section 6(1)(c) is not applicable 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 .....

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ver 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). Our .....

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inviting our attention to page-18 of the paper book. It was fairly agreed by the ld. CIT-DR that in A.Y. 2005-06, the assessee was assessed as non-resident by the Assessing Officer. It was further claimed by the ld. CIT-DR that the evidence produced by the assessee are not relevant to the facts of the case and even the banks, while opening the NRE account may or may not see the passport and other documents. 2.1. On the other hand, the ld. counsel for the assessee, Shri Jitendra Sanghavi along w .....

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re present before the ld. First Appellate Authority for which our attention was invited to page -1 of the impugned order evidencing the presence of both the officers. It was explained that for getting the status, the period of stay should be 182 days. It was pleaded that the assessee remained out of India for 187 days. The ld. counsel pointed out that the assessee is Managing Director of a Company, a non-resident so the global income cannot be assessed in India and the addition was deleted by th .....

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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 .....

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awn in the impugned order, material available on record, assertions made by the ld. respective counsels, if kept in juxtaposition and analyzed, the facts, in brief, are that the assessee is a non-resident Indian (as per statement of facts filed by the assessee). Undisputedly, his non-resident status was accepted by the Department all along in past as is evident from A.Y. 2005-06. The assessee was regularly filed its return of income in his individual capacity in the status of the non-resident an .....

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nt to the search, M/s Ganom Biotech Pvt. Ltd. (hereinafter in short GBPL) was also put to search. The cases of the present assessee (Mr. Binod Kumar Singh), his wife Ms. Sheila Singh, his daughter Ms. Trisha Singh were centralized and thus notice u/s 153A was issued on 24/07/2008 to the present assessee. The assessee, before the search, was assessed to tax in ward no.21(3)(1) Mumbai. He filed his return on 17/08/2008 for A.Y. 2008-09 in the said ward declaring income of ₹ 93,41,381/-. In r .....

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the companies based in Cyprus and UK. As per the Revenue, all these companies are controlled by Shri Binod Kumar, founder and CMD of GBPL and several rubber stamps of various companies/entities were also found in the companies premises during search. Shri Binod Kumar along with one of the Directors of GBPL, Mr. CMP Singh was examined on oath with respect to activities of the company. As per the Revenue, evasive replies were given by these persons and in the mid of investigation, Mr. Binod Kumar .....

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n 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 pu .....

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d consequently the appellant acquired residential properties in Ukraine in 1995 and 1997 The appellant continued to maintain permanent residence in Ukraine conducting business therein and then in Cyprus etc till he shifted to UK in late 20021 early 2003, even though his business interests continued in Ukraine! CIS countries. The appellant along with his family shifted residence to England, though his business interest continued in Ukraine, Russia, CIS Countries. Initially he was residing at 3 Ci .....

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the business venture / investments made in Russia, Ukraine, CIS Countries and Cyprus. Sr. No. Passport No. Place of Issue Validity Remarks 1. R-691005 UKRAINE/KIEV 30/06-94-31/08/98 Filed as additional evident 2. U-925810 UKRAINE/KIEV Additional Booklet to Passport NO.R- 691005 issued on 04/08/1997 Filed as additional evident 3. U-925873 UKRAINE/KYIV Additional Booklet issued on 22/01/1998- 18/06/2001 Original Passport misplaced 4. A-1280977 UKRAINE/KYIV 19/06/2001- 21/01/2008 Additional Booklet .....

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e investments in India started a Pharmaceutical Company under the 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 Ind .....

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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. 1998 to 18th June, 2001 not traceable at present 2000-01 1999-00 N.A. N.A. Passport for period 1st Sep. 1998 to 18th June, 2001 not traceable at present 2001-02 2000-01 N.A. N.A. Passport for period 1st Sep. 1998 to 18th June, 2001 not traceable at present 2002-03 2001-02 215 150 Pas .....

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-09 2007-08 188 177 2009-10 2008-09 288 77 The Banking Accounts in the name of the appellant and all family were all classified as non-resident detailed as under:- 1 013-055678-006/0074/008 (NRE/NRO/PI) HSBC BANK Plot No.3/1, Eden Square NS Road, No- 10, JVPD, Scheme Juhu Vile Parle(W), Mumbai- 400049 29, Rushden Gardens, Ilfor City, Essex, UK, IG50BP 2 246010100129879/ 246010100125772 (NRO/NRE) AXIS BANK LTD Shop No.17 & 18, Gr. Flr. Ventura Bldgs, Hiranandani, Business Park, Powai, Mumbai- .....

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ria Apts., 49, .M.V. Road, Andheri (E), Mumbai- 400069 VOROBIEVY GORY PLOT NO.02, FLOOR 38, STREET, MOSFILNOVSKAYA, MOSKOW, RUSSIA, 7 010613100001157 (NRE) Bank of India Mumbai Corporate Banking Branch Fort- Mumbai STARSTARONAVODNITSKAYA 6-A, FLAT NO.44, KYIV, UKRAINE. The particulars of all immovable properties purchased and owned by him in India and abroad are detailed as under:- Sr. No. Particulars of Property Date of Acquisition Cost Source of Investment 1 50% share in House Jamuna Apartment .....

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e) 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 ₹ 36,76,160, B- 603/B ₹ 22,76,040/- Loan from HDFC Bank Ltd. ₹ 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 200 .....

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.50 cr. And Direct Remittance from abroad 9 Residential house at Rusden Gardens, Ilfort Essex IGS OBP 20/07/2004 GBP 2,84,000/- (Rs.2.50 crore approx) Partly thru loan by mortgage 10 Residential house in USA at 32, Sand Stone Road, East Windsor, NJ08520 Sept,2005 USD 419,800/- (Rs.2 crores approx) 11 Office Premises No.604 & 605 (amalgamated) Powai Plaza-2, Hiranandani Business Park, Hiranandani Gardens, Powai, Mumbai 20/02/2006 Office Premises given on lease basis 605 & 604- ₹ 3,0 .....

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,00,000/- was financed by DHFL & Balance from HSBC NRO & NRE A/X The appellant was regularly filing return of income in his individual capacity in the status of a non-resident and was duly assessed u/s 143(3) of the Act vide Order dated Novem ber 30, 2007 in respect of A Y 2005-06 The AO, after due examination of the period of stay, accepted the status of non-resident as declared by the assessee and no incriminating documents found during search which would warrant a change of opinion. T .....

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, Amit Kumar, Rajesh Soni, Diip Kumar 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 Noti .....

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O 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 Original passport Date of arrival -Dt. of departure as per immigration seal Previous Year No. of days in India Page no. in the Original passport 01/04/06-13/04/06 2006-07 13 Pg.52 22/10/06-06/11/06 16 Pg.04 & Pg.04 05/12/06-09/01/07 36 Pg.03 & Pg.07 25/02/07(arr)-31/03/07 35 Pg.07 100 01/04/07-18-04-07(dep) 2007-08 18 Pg.03 27/04/07 .....

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/- as against the income of ₹ 15,8001- declared in the return filed u/s 139 of the Income Tax Act, 1961, The AO has framed an assessment u/s 153A read with Section 143(3) dated December 16, 2010 for the A Y 2007-08 in the status of resident determining the taxable income of ₹ 19,82,67,9141- as against the status of non-resident with a declared income of ₹ 1,98,911/- resulting in an addition of ₹ 19,80,69,0031-. While framing the order, the A 0 has recorded findings as und .....

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,06,95,475 /- 2 Alleged unexplained Remittances from Overseas to Genom Biotech Pvt. Ltd. Rs.93,47,871/- 3 Alleged unexplained deposits in Bank A/c s maintained abroad -Rs.1,72,24,053/- 4 Alleged unsubstantiated liabilities Rs.7,91,604/- Total Rs.19,08,69,003/- The appellant filed combined written submissions for the AY's 2003-04 to 2009-10 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 .....

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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 Co .....

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report dated March 22, 2012 and final report dated April 3, 2012 confirming that the interim report be treated as Final. The AO in brief has in his report stated as under:- (a) The appellant has not filed the copies of passport no.U- 925873 and has also not produced the original passport bearing nos.U-925873, A-1280977, Z-1023527 and Z- 1023582 during the remand proceedings, despite, being asked to produce the same. (b) The AO in term of section 133(6) of the Act, sought information from FRRO, M .....

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09-10 is as under: Dt. Of arrival Date of departure No. of days in India (Passport No) and Remarks No. of days as per assessee F.Y.2006-07 01/04/06 13/04/06 13 Z-1023527 12 22/10/06 06/11/06 16 Z-1023582 15 05/12/06 09/11/07 36 Z-1023582 35 25/02/07 31/03/07 35 Z-1023582 34 120 DAYS TOTAL TO READ 100 DAYS 96 F.Y.2007-08 01/04/07 18/04/07 18 Z-1023582 17 27/04/07 13/05/07 17 Z-1023582 16 08/07/07 11/08/07 35 Z-1023582 34 19/08/07 16/09/07 29 Z-1023582 28 31/01/08 31/03/08 79 (Z-1023582) As per as .....

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4/01/09 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 .....

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opy nor the original could be produced. The Counsel pleaded that the AO, pursuant to the petition for additional evidence was required to examine and submit his Remand Report with respect to the additional evidence sought to be admitted by the assessee under rule 46A. However, after receipt of the petition for additional evidence, instead of restricting the inquiry / investigation with respect to the additional evidence has unlawfully started re-examination of the status by making enquiries from .....

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, determined by the AO is incorrect as the AO has calculated the period of each visit by including both the date of arrival and departure which is not in accordance with law. The first issue to be decided is whether the additional evidence filed by the appellant under Rule 46A should be admitted or not. The petition filed by the appellant containing 316 pages was furnished to the AO granting opportunity to examine the same and the AO has submitted his report dated March 22, 2012. The appellant h .....

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udicious decision. He has cited the following judgments:- CIT Vs Suretech Hospital And Research Centre Ltd (2007) 293 ITR 53 (Born) The rule 46A of the 1962 rules allows the appellant authority to permit production of documents 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 cros .....

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ime 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 on fact that amount borrowed and repaid be cheques-Assessee producing additi .....

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by the appellant as same goes to the root of the matter and is necessary for reaching a decision on the case. 4. Additional Ground:- "That the Lid. A 0 has erred in computing the period of stay in India by including therein both the day of arrival and departure, as representing stay in India ". The Counsel submitted that the day of arrival has to be excluded for calculating the number of days. For instance, if a person arrives on 10th and leaves on F" the period would be one day a .....

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then it will include the last day in a series of days or any other period of time". The Hon'ble Members observed that the period is to be counted from the date of arrival of the assessee in India to the date he leaves India. Thus, the word "from" and "to" are to be inevitably used for ascertaining the period though, these words are not mentioned in the statute. Accordingly, we hold that first day of each visit shall be excluded" I have considered the submission .....

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. 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 appel .....

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appellant in India in the preceding nine / seven years, nor appreciate the provisions of Section 6(6)." The AO has dealt with the issue relating to residential status at para 19 of order. TheAO has on the basis of the passport prepared a tabular chart stating the period of stay in India commencing from October 1, 2003 as the tort for the earlier period was not available. The AO has mentioned that records at para D, Page 20 of the order states as under:- "In this case under considerati .....

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sitor" as understood in common parlance is .....'meet a person'. When a person having his residence and place of work at a place comes and stays that place, he shall not be treated as a visitor. This aspect is most strengthened by the fact that the assessee has his home and part of his family (Parents) in India. The business empire run by him is totally based in India. The Company's major activity of manufacturing and export activity is fully controlled by the Indian Territory. .....

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ificates of Ms. Trisha Singh (Daughter), Master Vyom Singh (Son), electricity bills, club cards, property documents . ...... how these documents are relevant for his claim of NRI status. The assessee has furnished a resident permit by UK in March 2009 .............assessee has not furnished any detail to prove that he was domiciled in UK from FY 2002-03 to 2008-09. It is also noticed that for the previous year 2004-05, the information furnished by the assessee regarding the no. of days of stay i .....

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sed 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 .....

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nce in India and also place of work. The visa of the appellant has captioned a 'Residence Permit' and is an investor visa read as Tier I (Investor) Migrant. The date of issue of the visa is March 18, 2009. The assessee has furnished copies of certain documents to support his claim that he was domiciled in UK during the financial year 2002-03 to 2008-09. The documents relate to school certificate of his daughter, son, electricity bills, club card and property documents. These do not estab .....

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has cumulative condition with respect to presence in India in 365 days in four preceding years AND 60 days or more in that year. In the case of an Indian Citizen / PIO the period of 60 days is substituted by 182 days. Thus, in case the period of stay is less than the stipulated no. of days, the other condition becomes irrelevant as both the conditions have to be satisfied. The AO has while interpreting the provisions of section 6(1)(a)/6(1)(c) read with explanation b has admitted that the relaxa .....

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of the appellant being abroad having been established, the explanation b is not applicable. Now, having given a finding that the period 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 .....

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ars 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 member of the crew of India ship ..........I for the purpose of employment outside India, the provisions of sub- e (c) shall apply in relation to that year as if for the words .....

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e residential status based on the physical presence in India is divided into two categories:- The first year when an India citizen goes abroad to take up employment. Thereafter having taken up employment abroad / settled therein comes to India from time to time. In the case of persons falling under category (a) above the residential status is governed by Section 6(l)(c) read with Explanation (a) i.e. if an assessee in the first year of departure from India leaves India with the purpose of employ .....

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zed as follows:- If individual has stayed in India for a period of 182 days or more in any previous year he is a resident in India in that previous year OR If he has stayed in India for a period of 60 days or more during any Previous year and 365 days or more during the four preceding previous years, he is a Resident in India in that previous year. If both the above two conditions are not satisfied, he is a Non- Resident in India in that previous year. Exceptions to Section 6(1) An individual, w .....

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n 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 - N .....

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of these amendments have also been elaborated in the following portion of the departmental Circular No. 554 dated 13.02.1990, as under:- 'Liberalization of the criterion for determining the residential status in the case of non-resident Indians - Under the provisions of the Income-tax Act, 1961, an individual who is resident in India is taxable on his global income, i.e. in respect of income accruing or arising in India as well as outside India. Prior to the amendment by the Second Amending .....

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90 days or 60 days was too short, especially for those who had to supervise their investments in India. In order to enable the non-resident Indians to stay in India for a longer period for looking after their investments without losing their 'non-resident' status, clause (b) of the Explanation to clause (c) of sub-section (1) of section 6 has been amended. The period of 90 days provided there under has been increased to 150 days. The amended provision will apply not only to a citizen of .....

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ent' status. Thereafter, amendment was again made by the Finance Act, 1994 and were clarified in Circular No. 684 dated 10.06.1994 Relevant extract is reproduced hereunder:- "Suggestions had been received to the effect that the aforesaid period of one hundred and fifty days should be increased to one hundred and 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 supervisi .....

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ring 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. .....

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on 6 sub-section (1), which determines the residential status of an individual, requires that either the applicant should have been in India for 182 days or more in four preceding years [vide clause (c)]. The Explanation to this sub-section provides that a citizen of India who leaves India for the purpose of employment outside India can be considered as resident of India, if he has been in India for 182 days or more even though he may have been in India for than 365 days in 4 preceding years. Th .....

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ot be treated as a resident of India. Vijay Mallya V/s, ACIT 263 ITR 41 (Cal.) The Lordships while analyzing the provisions of Section 6(1')(c) read with both the Explanation (a) & (b) have held "clause (a) of Explanation covers cases where a citizen of India leaves India for the purpose of employment outside India, then he would be a nonresident, if he is a India for less than 182 days. Now having been employed outside India, he comes to India for a visit, the Explanation (b) would .....

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ng 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 - .....

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(A)-1, New Delhi. Order dated 31.03.2011 Held, on identical facts "Para 1.9" The Legislature has been granting the benefit of extended stay to Indian Citizen / PlO's ..........period has been extended from 60 days to…………181 days with the principal objective of granting more time to stay during each of the frequent visits to India to Indian Citizens / PIO residing abroad to manage their affairs in India. This has been clearly brought out by the various Ci .....

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yet in that previous year his period of stay in India is less than 181 days and as such the appellant is a Non- Resident." The AO has misinterpreted the provisions of Section 6(1) of the Income Tax Act, by recording a finding that the assessee is not domiciled in U.K. and no evidence thereof has been adduced. It has been brought on record that the appellant is (a) residing in U. K. in residential house owned by him (b) the children are undergoing education in U.K. (c) the period of stay in .....

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or determining the residential status are based on physical presence in India for determining the period of stay in India. In case an assessee satisfies the same or otherwise the status is determined accordingly. The appellant states that, Circular No.684 of 1994 issued by the Central Board, being binding on the AO, the AO ought not to have ignored the same to conclude on alleged ground that the appellant having failed to adduce evidence, which was already submitted to the AO in the course of as .....

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), 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 re .....

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is not applicable to the appellant. The Complete details of his stay in India for 4 years prior to assessment year 2003-04 were not furnished. No evidence that the appellant is domiciled in UK. Therefore, the appellant is Resident and ordinarily resident in India and liable to tax the Global Income of the appellant. The period of stay of the applicant in India for the A.Y.2007-08 to 2009-10 are admittedly less than 182 days in each of the years. That the appellant is the holder of Indian Passpor .....

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h of a country s main embassy. Technically the embassy building and its property are part of the embassy's country. The following services are provided by the Indian Embassy abroad relating to the passport. Issue emergency passport in case you lose your passport Renewal of passport, issuing a new/ duplicate passport Validity extension of current passport, additional booklet, getting a passport for a minor. Hence, the issue of Indian Passport by the Ukraine and London Embassy to the appellant .....

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rt. This section also applies to persons requiring additional booklets where their passport has run out of available pages for visas, etc. A 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- .....

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d 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 in a property purchased by him in 1975, evidence of purchase of property Flat No. 44, House No. N-6A, Staronavodnytskaya Street, apt. 44, Kyiv till shifting to UK .....

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ic Bay, UK in 2003 which was the residential premises and thereafter shifted to a new house purchased by him All overseas travel commenced from UK and terminated in UK in evidence that he was residing in UK and always returned to his hometown. The assessee is subjected to tax in UK for the years 2007-08 to 2009-10. Copies of returns filed. The assessee was assessed to tax in India for the A.Y. 2005-06 in a scrutiny assessment in of non-resident and no evidence has been found which would suggest .....

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Income Tax Act, 1961. The residential status is crucial in determining the taxes an assessee is required to pay. Section 6 of the Income Tax Act defines the following categories liable to pay tax in India: Non- Resident Indian (NRI) Resident Resident, but not ordinarily resident (RNOR) NRIs and RNORs are liable to pay tax only on their "Indian income" while tax payers who are resident in India as per Income Tax Act are taxed on their "world income". Chapter XI of the Act def .....

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t' 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 relaxati .....

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or either of his parents or grandparents was born in India. In the case of C.N. Townsend vs. CIT [1974] 97 ITR 185 (Pat) is was held that if any of the conditions mentioned in clause (a), (b) or (c) of section 6(1) is fulfilled, the assessee will be 'resident' within the meaning of the Act. In the case of Vijay Mallya vs. ACIT [2003] 131 Taxman 477 (Cal.) it was held that while deciding the residential status of an assessee, the Assessing Officer should consider the provisions of both se .....

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ficer accepts the claim of assessee and decides that the assessee is a 'non-resident' under section 2(30), then also he is duty-bound to record the reasons as to why he is not holding the assessee as a 'resident' in India either under the provisions of section 6(1)(a) or under section 6(l)(c). Recently, the Hon'ble High Court of Karnataka decided the question whether the period of visit by NRI preceding his return to India should be excluded from the total stay of NPJ. The Ho .....

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of an Indian company was deputed to Chicago, USA with effect from 1st February 2004. He stayed in India for 365 days during each of the years from previous year 2000-01 to 2006-07, except for the previous years 2003 -04 and 2004-05, wherein he stayed in India for 306 days and 78 days respectively. The stay of 78 days during previous year 2004-05 ("the relevant previous year") included the days of his visit to India from 19th August 2004 to 6th September 2004.The assessee came back perm .....

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nd 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 .....

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coming to India only on visits during a previous year and staying in India for the same period as the former. While considering this contention, the ITAT referred to the corresponding provisions of the Indian Income-tax Act, 1922 and after considering the legislative history and the intention of the legislature, agreed with the contention of the assessee that period of stay on a casual or occasional visit to India is not to be reckoned while computing the period of stay in India. Thus, the perio .....

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ing the time during which he was visiting India, the requisite number of days, that is 60 days during the current year, the assessee was not in India and therefore, he is to be treated as non-resident and cannot be taxed as a resident under section 6(1)(c). The said finding of fact is arrived at on the basis of the material on record. The Tribunal and the Appellate Authority have relied upon a certificate issued by Warton Residential, the employer, which is dated 18-1-2008. In the certificate it .....

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lding 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 .....

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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 residential status. A person is considered as a non-resident for the previous year (hereinafter referred to as relevant previous year), if he is in India for a period of less than 181 days in the year. However there is another condition. If the person has been in India in the four preceding years (preceding the relevant previous .....

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or upto 181 days and still continuing to be a nonresident is available if the NIRI comes to India for a visit. What is a visit is not explained. Generally if he comes to India (for any purpose), and goes back, it should be considered as a visit to India. This can have an impact in the year in which a person returns to India. The Word visit has not been defined in the Income Tax Act. However, the definition of the word visit is as under Vis.it Verb\vi-zet\ Vis.it.ed:vis.it.ing Definition of Visit .....

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n as an act of friendship or courtesy b : to reside with temporarily as a guest C: to go to see or stay at (a place) for a particular purpose (as business or sightseeing) d to go or come officially to inspect or oversee intransitive verb 1 to make a visit; also: to make frequent or regular visits 2 chat, converse Examples of VISIT She is visiting her aunt in New York. When are you coming to visit? He is visiting a client in Phoenix. She visits h .....

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ndia 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 (2 .....

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country where a person normally lives or makes habitual visits, as in case of an individual who visits three hundred and sixty-five days or more in the preceding four years as contemplated in clause of section 6(1)Ordinarily resident for the purposes of income-tax connotes residence in a place with some degree of continuity and apart from accidental or temporary absences (see Levene v IRC (1928) A. C. 217, Union Corporation Ltd. v. IRC (1953) 2 WLR 615). Thus, in Levene v. IRC (supra), a Britis .....

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week on the occasion of each visit. The Special Commissioners found as a fact that he was resident in the United Kingdom, and the House of Lords (Viscount Cave L. C. dissenting) refused to interfere with their finding. This case shows that the motive of presence here is immaterial; it is a question of quality which the presence assumes. The foreign income of every resident even when it is not brought into the country is chargeable to tax except when the resident is 'not ordinarily resident& .....

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The test is one of presence and not absence from India and the length of presence will determine when an individual is 'not ordinarily resident' in India. In order than an individual is not an ordinarily resident, he should satisfy one of the two conditions laid down in section 6(6)(a) of the Act, the first condition is that he should not be resident in India in all the nine out often years preceding the accounting year and the second condition is that he should not have during the seve .....

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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 answ .....

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king away its ordinary meaning. Further, such a clause should be so interpreted as not to destroy the basic concept or essential meaning of the expression defined, unless there are compelling words to the contrary. Words, which are not specifically defined, must be taken in their legal sense or their dictionary meaning or their popular or commercial sense as distinct from their scientific or technical meaning unless a contrary intention appears. The Supreme Court of India in the case of Tarlocha .....

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his higher secondary education at St. Xavier College Ranchi, Jharkhand, he was selected by Heavy Engineering Corporation Ltd. and in 1978 he went to Soviet Union for further education. During the period from 1978 to 1984 he did his masters in Engineering in Radio Technology in systems and also did post graduation in Russian language. From 1984 to 1986, he worked in trading pharma company in USSR and from 1986 and 87, he did his business management from Sweden and from 1987 to 1989 again worked .....

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business in Ukraine, till 2002. Thereafter, along with his family, 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 .....

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idity 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 LONDON/UK 23/11/2009 to 22/11/2019 2.6. So far as, the allegation of the ld. CIT-DR that the assessee did not submit the original passport is concerned, we find, as is evident from written submissions of the assessee, which have been reproduced in para -3 (page-3) onwards of t .....

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rly oozing out that the assessee in fact produced the passport along with their validity so, the allegation of the Assessing Officer which were identically argued by ld. CIT-DR are not substantiated, therefore, on the basis of finding recorded by the ld. Commissioner of Income Tax (Appeals) and examined by us clearly indicates that the passport were in fact produced by the assessee. 2.7. Now, so far as, status of the assessee is concerned which is to be identified by his stay in India, is concer .....

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une, 2001 not traceable at present 1999-00 2000-01 N.A. N.A. Passport for period 1st Sep. 1998 to 18th June, 2001 not traceable at present 2000-01 2001-02 N.A. N.A. Passport for period 1st Sep. 1998 to 18th June, 2001 not traceable at present 2001-02 2002-03 215 150 Passport for period 1st Sep. 1998 to 18th June, 2001 not traceable at present 2002-03 2003-04 206 159 Non- Resident (As per Section 6(1)(c) read with explanation b) Period computed from Original Passport 2003-04 2004-05 261 104 Non- .....

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arch, 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 .....

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16/12/1999 to 10/1/2000 25 13/3/2000 to 28/3/2000 15 5/10/2000 to 24/10/2000 19 57 2001-02 27/12/2000 to 23/1/2001 27 5/3/2001 to 16/3/2001 11 03/07/2001 to 19/09/2001 68 150 2002-03 CIT(A) order of A.Y. 2003-04 Pages 10 & 11 19/10/2001 to 24/10/2001 5 18/11/2001 to 13/01/2002 56 03/03/2002 to 24/03/2002 21 03/05/2002 to 22/05/2002 20 179 2003-04 01/07/2002 to 28/08/2002 58 09/09/2002 to 02/11/2002 53 17/11/2002 to 30/11/2002 13 17/12/2002 to 21/01/2003 35 02/04/2003 to 04/04/2003 2 162 200 .....

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25/11/2005 to 28/11/2005 3 07/12/2005 to 08/01/2006 32 10/01/2006 to 03/02/2006 23 12/02/2006 to 28/03/2006 44 29/03/2006 to 31/03/2006 2 01/04/2006 to 13/04/2006 12 96 2007-08 22/10/206 to 06/11/2006 15 05/12/2006 to 09/11/2007 35 25/02/2007 to 31/03/2007 34 01/04/2007 to 18/04/2007 17 173 2008-09 CIT(A) order of A.Y.2008-09 Pages 9, 10 & 11 27/04/2007 to 13/05/2007 16 08/07/2007 to 11/08/2007 34 19/08/2007 to 16/09/2007 28 13/01/2008 to 31/03/2008 78 01/04/2008 to 08/04/2008 7 75 2009-10 C .....

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on-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 applica .....

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the word one hundred and eighty two days has been substituted, therefore, in terms section 6 (1)(c), even if assessee is within India for a total of 365 days in four years preceding the relevant year, then also the person is to be considered as Resident for a particular year as he has to be in India for 182 days are more in that year. ii. During A.Y. 2006-07, the assessee was in India for more than one eighty two days, therefore, he is a resident in India for that year. However, keeping in view, .....

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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 (b) [* * *] (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. 28[Explanation 1].-In the case of an individual,- (a) being a citizen .....

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hin the meaning of Explanation 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 l .....

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n 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 taxable in India. 2.9 So far as, the contention of the ld. CIT-DR that there is violation of Rule-46A of the Rules and further no opportunity was provided to the Assessing Officer is concerned, we note that the details, filed by the assessee, were examined by ld. Commi .....

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contention of the Assessing Officer has been duly incorporated in the impugned order, wherein, the assessee furnished certain copies of documents, evidencing that during F.Y. 2002-03 to 2008-09, he was domiciled in U.K. The documents relates to school certificate of his daughter, son, electricity bills, club cards, property documents, etc. It is also noted that for A.Y. 2007-08, the contention of the assessee as well as other details, contention of the Assessing Officer were considered holding t .....

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to deleting the addition of ₹ 33,67,59,738/- u/s 68 of the Act on account of unexplained cash deposits in Indian Bank Accounts, merely on the evidence of transfer of funds and confirmation without investigating the source of funds transferred from foreign bank accounts. 3.1. The crux of argument advanced on behalf of the Revenue is in support of the assessment order, wherein, the addition of ₹ 18,08,83,727/- (Axis Bank) and ₹ 15,58,76,011/- (HSBC Bank) (Total ₹ 33,67,59, .....

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rd. 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 e .....

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ed by M/s Biogenetica ltd. (subsidiary of M/s Selesta Hoing Ltd.) to the assessee along with funds transfer advice from bank of Cyprus and FRIC issued by HSBC Bank, India. (C) copy of FRIC, issued by Axis Bank, India, in support of remittance of ₹ 18,08,83,727/-, received in India from foreign bank account of the assessee (Shri Vinod Singh). 3.3. It is noteworthy that aforesaid evidence was forwarded for examination by the Assessing Officer and report, no comments were offered except sayin .....

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concerned, it represents the amounts remitted by M/s Selesta Holding Ltd. against the amount owed by M/s Biogenetica Ltd. (subsidiary of M/s Selesta Hoing Ltd.) to the assessee along with funds transfer advice from the bank of Cyprus and FIRC issued by HSBC bank in which the assessee had an interest. The impugned amounts were remitted from respective bank accounts of the assessee in India. These were personal foreign bank accounts of the assessee and remitted to NRE Indian bank accounts in Indi .....

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wise. It is also noted from page 15 (last para) that the ld. Commissioner of Income Tax (Appeals) himself examined the evidence with respect to remittance which were supported by FIRC, issued by bank in India, remittance advice of a foreign bank, confirmation of each 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 .....

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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 shifts to the Revenue to prove otherwi .....

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ion arrived at in the impugned order. 4.1. We have considered the rival submissions and perused the material available on record. The ld. Assessing Officer made the addition u/s 68 of the Income Tax Act, for the amount of ₹ 15,44,72,906/- ($ 32,86,657 at the rate of ₹ 47 per dollar at the relevant time) which was found deposited in the account maintained by the assessee with HSBC Bank USA. The addition was made by the ld. Assessing Officer on the ground that the assessee refused to f .....

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16 onwards), by following various decisions, the addition was deleted, against which, the Revenue is in appeal before this Tribunal. 4.3. We find that there is a categorical finding in the impugned order (page-16) that the I.T. Department conducted independent enquiries abroad with respect to bank account of the assessee and the amount was treated unexplained. This enquiry, if any, was made behind the back of the assessee and the department was dutifully bound to confront the assessee, if any, a .....

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t 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 .....

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ed by the Assessing Officer in the assessment proceeding. It is contended by Mr. Shrivastava that when a witness has been examined by the Assessing Officer and his statement has been pressed into service, the assessee should have been allowed to cross-examine, more so, when, he had filed an affidavit retracting from his earlier statements. 4.5. In P.S. Abdul Majeed v. Agricultural ITO and STO , the High Court of Kerala took note of the order of reassessment which was made without any reference t .....

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mine the authors of those books. 4.6. In this context, we may refer to a three-judge Bench judgment of the apex court rendered in State of Kerala v. K.T. Shaduli Yusuff , wherein their Lordships expressed the view that where the entries in third party's accounts were used to reject the assessee's accounts to pass best judgment assessment, denial of the assessee's request to cross-examine the third party vitiates the order of assessment. 4.7. In Rajesh Kumar, the apex court has expres .....

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earned senior Counsel for the Revenue, submitted that the said decision is distinguishable as that deals with giving of reasons. We have referred to the same only to show that the principles of natural justice are applicable when adverse civil consequences are visited to an assessee. 4.8. In Dharam Pal Prem Chand Ltd. [2007] 295 ITR 105, the Delhi High Court took note of the fact situation where the Assessing Officer had passed an assessment order on the basis of a report obtained from the resea .....

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ted 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 .....

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matically accepted particularly since there is a challenge to it and the assessee had sought permission to cross-examine the analyst making the report. Since the Assessing Officer did not permit the correctness or otherwise of the report to be tested, there is a clear violation of the principles of natural justice committed by him in relying upon it to the detriment of the assessee. As observed by the Constitution Bench in C.B. Gautam v. Union of India , that, 'The observance of the principl .....

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Co., as it was a small firm and not assessed to income-tax. 4.11. In the obtaining factual matrix, the seminal question is whether the said statement of Mohd. Rashid could have been utilised against the assessee without calling him for cross-examination. It is of immense significance that Mohd. Rashid has filed an affidavit in variance of his original statement. That apart, the Assessing Officer has ignored the affidavit and ascribed reasons how the transaction with the said Mohd. Rashid was not .....

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t been done. The language employed under Section 131 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 Prade .....

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tion 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 the year, the amount found deposited in the foreign bank cannot be held to be taxable in India, hence, in view of the foregoing decisions and the uncontroverted factual matrix, we find no infirmity in the conclusion drawn by the ld. Commissioner of Inco .....

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ment 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 counsel, if kept in juxtaposition and analyzed, we note that the ld. Assessing Officer has discussed the issue in para 27 (page 33) of the assessment order by holding that the assessee did not furnish any explanation/evidence/confirmation with respect to these liabilities, representing the amount due to Shri CMP Singh (Rs.1,70,000/- .....

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tion along with ledger account of Shri Rajesh Jha for the same period and upon examination of evidence found the same in order. In view of this uncontroverted factual finding, we affirm the stand of the ld. Commissioner of Income Tax (Appeals) as no contrary evidence was brought to our notice by the Revenue, consequently, this ground of the Revenue is devoid of any merit. 6. The next ground pertains to deleting the addition of ₹ 8,25,00,000/- made u/s 69 of the Act in contravention of Rule .....

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ich 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, E .....

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has also available with the Assessing Officer. Thus, this addition is wholly opposed to facts and law. In any case the assessee has also placed on record the source of investment made out of earning and saving thereof abroad and being Non Resident the same is not taxable in India. The appellant in respect of Property at 9 HZ, Hadrian Way, Chilworth, Southampton, U.K (GBP 7,75,000) - ₹ 7,00,00,0001- purchased on 30.8.2007 has submitted that the same was purchased out of (i) Loan of GBP 4,80 .....

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of Loan Sanction Letter (2,11,200 GBP) for purchase of the aforesaid property against hypothecation of Property at 29, Rushden Gardens Ilford, Essex, U.K. The appellant has furnished complete details and evidence regarding source of investments representing his accumulated savings abroad out of incomes earned overseas as Non Resident. 6.2. On the basis of the above evidence, the ld. Commissioner of Income Tax (Appeals) concluded as under:- Since I have held that the appellant to be a Non- Resid .....

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e effect accordingly. 6.3. 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 counsel, if 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 .....

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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 CTR 350 (Karnataka) DIT(IT) vs Manoj Kumar Reddy (2011) 201 t .....

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vs United Vanaspati (275 ITR 124) (AT)(Chandigarh ITAT) vii. Union of India vs Kumudini N. Dalal 249 ITR 219 (SC) viii. Union of India vs Satish Pannalal Shah 249 ITR 221 ix. B.F.Varghese vs State of Kerala 72 ITR 726 (Ker.) x. CIT vs Narendra Doshi 254 ITR 606 (SC) xi. CIT vs Shivsagar Estate 257 ITR 59 (SC) xii. Pradip Ramanlal Seth vs UOI 204 ITR 866 (Guj.) xiii. Radhaswamy Satsang vs CIT 193 ITR 321 (SC) xiv. Aggarwal warehousing & Leasing Ltd. 257 ITR 235 (MP) 6.4. The sum and substance .....

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rity. We affirm his view being uncontroverted on fact. Finally, this appeal of the Revenue is having no merit, therefore, dismissed. 7. So far as, cross objection No.149/Mum/2013 (against the ITA No.4597/Mum/2012) filed by the assessee, is concerned, the same was not pressed by the ld. counsel, therefore, the cross objection of the assessee is dismissed as not pressed. 8. So far as the appeal of the Revenue for A.Y. 2007-08 (ITA No.4596/Mum/2012) is concerned, the issues involved are identical t .....

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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 rai .....

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the Revenue in ITA No.5531/Mum/2012 (A.Y. 2004-05), therefore, on the same reasoning, we find no merit in this appeal also, therefore, dismissed. 11.1 Identically, C.O. No.213/Mum/2013 (A.Y. 2004-05) was not pressed by the ld. counsel for the assessee, therefore, it is dismissed as not pressed. 12. The appeal for A.Y. 2005-06 (ITA No.5532/Mum/2012), being on identical ground, is also deserves to be dismissed on the same reasoning. 13. C.O. No.214/Mum/2013 (A.Y. 2005-06) was not pressed by the ld .....

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and 2007-08 to 2009-10. Identical argument was raised by the ld. CIT-DR. On the other hand, the ld. counsel for the assessee, defended the conclusion in the impugned order. 15. We have considered the rival submissions and perused the material available on record. 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 counsel, if kept in juxtapositio .....

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the legislative history. The Law Commission recommended the total abolition of the provisions of section 4B of the 1922 Act defining "ordinary residence" of the taxable entities. The Income-tax Bill, 1961 (Bill No. 27 of 1961), therefore, did not contain any such provision. On the legislative anvil, it was felt necessary to keep the provisions of section 4B of the 1922 Act in fact and, therefore, section 6(6) had to be enacted in the 1961 Act. 16. Section 6(6) consists of two limbs. It .....

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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 "resid .....

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has been found to be a resident. The enquiry whether or not an individual or a Hindu undivided family is "ordinarily resident" or "not ordinarily resident" is needed only after it is found that he or it is "resident" within the meaning of section 6(1) or 6(2), as the case may be. If it is ascertained, on facts, that the assessee is non-resident, no such enquiry is needed at all. The only difference in the incidence of income-tax on a "resident and ordinarily re .....

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uot; in India in a previous year, only- (i) if he is an individual, (a) he has been resident in India in nine out of the ten previous years preceding that year and (not or) (b) during the seven previous years preceding that year he has been in India for a total period of seven hundred and thirty days or more; (ii) if it is a Hindu undivided family, (a) its manager has been resident in India in nine out of ten previous years preceding that year and (not or) (b) during the seven years preceding th .....

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fer to the correspondence resting with the Ministry of Finance (Department of Revenue) letter No. 4122/61-IT(AT), dated 25th November, 1961, 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 .....

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esident 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, In re, (1997) 228 ITR 61,66 (AAR). In Morgenstern Werner v. CIT [(1998) 233 ITR 751, 755 (All), affirmed in CIT v. Morgenstern Werner, (200 .....

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02) 256 ITR 647, 654, 656- 57 (Guj), special leave petition granted by the Supreme Court: (2002) 257 ITR (St.) 35 (SC)], it has been held that section 6(6) does not define 'ordinarily resident in India' but describes 'not ordinarily resident' in India. It resorts to the concept 'resident in India' for which the criteria are laid down in section 6(1). 'Ordinarily resident' for the purposes of income-tax connotes residence in a place with some degree of continuity a .....

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esident, he should satisfy one of the two conditions laid down in section 6(6)(a), the first condition is that he should not be resident in India in all the nine out of ten years preceding the previous year and the second condition is that he should not have during the seven years preceding that year, been in India for a total period of 730 or more days. In the facts of that case, the Tribunal has found (pp. 656-57) as a fact that the assessee was a resident in India for 8 years out of 10 preced .....

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t 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 ha .....

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following points of difference emerge: Sl. No. Section Existing Provision Substituted (1) 6(6)(a) Has not resident Has been a non-resident (2) 6(6)(a) Has not during Has during (3) 6(6)(a) Seven hundred and thirty days or more Seven hundred and twenty nine days or less (4) 6(6)(b) Has not been resident Has been a non-resident (5) 6(6)(b) Has not during Has during (6) 6(6)(b) Seven hundred and thirty days or more Seven hundred and twenty nine days or less To put it differently, according of sect .....

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sment year 2003-04) 730 days or more -(for and from assessment year 2004-05) 729 days or less. According to section 6(6)(b), a Hindu undivided family is said to be 'not ordinarily resident' in India in any previous year if its manager-(upto assessment year 2003-04) has not been resident -(for and from assessment year 2004-05) has been a nonresident in India in 9 out of the 10 previous years preceding that year, or -(upto assessment year 2003-04) has not -(for and from assessment year 200 .....

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ld be sufficient to treat an individual or a Hindu undivided family as 'not ordinarily resident' in India. Section 6(6) was amended by the Finance Act 2003, with effect from 1-4-2004. As a result of the said amendment, an individual though resident, is not ordinarily resident in any previous year: (1) either where he has not been resident, i.e., has been a nonresident in 9 out of 10 previous years preceding that previous year; (2) or where he has not been in India (i.e., has been absent .....

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