TMI Blog2017 (5) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it has not rendered any services in India with regard to its overseas assignments during visits to India and further that no business activity is being carried on by assessee in India. The basic document which would show intention of assessee is his passport. In the instant case copies of visa's issued by the UAE and the UK have been placed on record of the Assessing Officer. The Assessing Officer has noted in his order that "in the present case, the assessee is a citizen of India. Assessee is on Indian pass port. For Dubai or the UK he might be having some special visa" however after noting as such undue importance has thereafter been given by the Assessing Officer to the economic/legal presence of the assessee in India. Thus no reason to interfere with the finding of CIT(Appeals) directing the Assessing Officer to assess the assessee as a "non- resident". - Decided in favour of assessee Deletion of addition made by the learned Assessing Officer being the total amount remitted by the assessee in India therefore does not warrant an interference and we are inclined to uphold the same - I. T. A. No. 3986/Del/2009, I. T. A. No. 3987/Del/2009, I. T. A. No. 3988/Del/2009 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer noted that the following remittances were received in India : Mode of remittance Amount remitted Amount credited by bank Date of remittance IT/DD or other number Bank and bank account No. abroad Purpose of remittance Beneficiary of remitted money TT US$ 10000 deposited 4,35,128 15/Apr/04 178034204 HSBC Middle East Dubai Trf. to own account Sudhir Choudhrie TT US$ 10000 deposited 4,53,990 17/May/04 178044504 HSBC AEAD Trf. to own account Sudhir Choudhrie TT US$ 10000 deposited 4,49,599 16/Jun/04 178056704 HSBC Middle East Dubai Trf. to own account Sudhir Choudhrie TT US$ 10000 deposited 4,57,183 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TT US$10000 deposited 4,37,302 14/Dec/04 1781164044 BBMEAEAD Trf. to own account Sudhir Choudhrie TT US$10000 deposited 4,32,789 13/Jan/05 178126405 HSBC Dubai Trf. to own account Sudhir Choudhrie TT US$250000 1,09,05,000 19/Jan/05 TTAEN409025CSN HSBC Bank, Middle East Ltd. Sh. Appl. Money Primeland Real Estate TT US$200000 86,64,600 03/Feb/05 TTAEN419218CSN HSBC Bank, Middle East Ltd. Sh. Appl. Money Primeland Real Estate TT US$10000 deposited 4,33,786 15/Feb/05 178136505 HSBC Middle East Dubai Trf. to own account Sudhir Choudhrie T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 6(1) applicable. To highlight the gravity of personal and economical relationship of the assessee in India, the Assessing Officer, in his order of assessment held as under : Interpretation of the phrase 'being outside India' vis-a-vis facts of the case : Being outside India requires to be seen as opposite of 'not being inside India'. He should be primarily present at a place outside India and his presence in India, if any should be small and only of the 'secondary' or 'sub' nature. The gravity of his personal presence should be some other country, other than India. In the present case, the assessee is a citizen of India. The asses see is on Indian passport. For Dubai or UK he might be having some special visa. Further, during the year, his stay in India is for 171 days, which is more than his stay in any other country. As claimed by the asses see, he is a global traveller ; this further strengthens the view of this office. The assessee has been tax resident of India in the past, Along with properties owned in India, the assessee's address in India is '45-46, Sunder Nagar, New Delhi 110 016' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not submitted even after being provided opportunities. As per the unevidenced claims of the assessee, the assessee has not filed tax return in any country other than India. The assessee is regularly assessed to tax in India. In India the assessee has also filed wealth-tax return. Therefore the centre of his vital interests continues to be in India until and unless proved by the assessee to have been shifted was not 'being outside India'. Gravity of legal presence of the assessee should be outside India In the present case, the assessee is a citizen of India. The asses see is on Indian passport. Being a citizen of India, he is loyal to the Republic of India. India is the only country where the assessee is filing tax return and on a regular basis. The assessee is legally present in India. The assessee is only travelling to other countries, as normal India citizens and resident travel. His presence in all the years has been substantial presence in India. To prove of 'Being outside India', the assessee is required to prove that how he has been outside India and in which country his center of vital in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax (Appeals), the Revenue is now in appeal before us. 3.1 During the course of hearing, the learned Commissioner of Income- tax (Departmental representative) submitted that the learned Commissioner of Income-tax (Appeals) was wrong in not appreciating that factors like economic presence and legal presence of an assessee are relevant criteria for determination of the residency status of an assessee. The learned Commissioner of Income-tax (Departmental representative) relied upon the facts noted in the assessment order which highlight the magnitude of economic presence and legal presence in India of Shri Sudhir Choudhrie. Relying upon the court decision in the case of Asst. DIT (Investigation) (AIU) v. Apparasu Ravi reported in [2011] 332 ITR 497 (Mad) and Mrs. Smita Anand, In re reported in [2014] 362 ITR 38 (AAR), it was submitted by the learned Commissioner of Income-tax (Departmental representative) that under certain circumstances number of days cannot be the sole criteria to determine the tax residency status. It was submitted by the learned Commissioner of Income-tax (Departmental representative) that on facts of the instant case, the learned Assessing Officer was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (a) got satisfied when the assessee decided to relocate his family outside India and took self- employment there. It was submitted that the Department has been accepting that the assessee was being outside India and the residency status of the assessee has been assessed as that of a non-resident by the Assessing Officer in the assessment years 2003-04 and 2004-05. The learned authorised representative also relied upon the decision of co-ordinate Bench of the Income-tax Appellate Tribunal in the case of Suresh Nanda v. Asst. CIT reported in [2012] 53 SOT 322 (Delhi) in support of his submission that the sole relevant test for determination of residency status is the number of days criteria. It was submitted by the learned authorised representative that this decision had been upheld by the jurisdictional High Court in CIT v. Suresh Nanda [2013] 352 ITR 611 (Delhi). The learned authorised representative also relied upon the decision of co-ordinate Bench in the case of K. Sambasiva Rao v. ITO reported in [2014] 62 SOT 167 (Hyd). About the decisions relied upon by the learned Commissioner of Income-tax (Departmental representative) it was submitted that these cases were disting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , much weightage has been given to economic and legal relationship of an assessee with India. We do not find any merit in this contention. Provisions of section 6 earlier provided that an individual would be a resident of India if he maintained for himself a dwelling place in India. These provisions have undergone several amendments and the legislative intention is in fact encouraging non-residents to maintain investments in India and still not losing the status of a non- resident . In this regard it would first be relevant to note the provisions under the 1922 Act which were in section 4A and provided for as under : 4A. Residence in the taxable territories.-For the purpose of this Act- (a) any individual is resident in the taxable territories in any year if he- (i) is in the taxable territories in that year for a period amounting in all to one hundred and eighty-two days or more ; or (ii) maintains or has maintained for him a dwelling place in the taxable territories for a period or periods amounting in all to one hundred and eighty-two days or more in that year, and is in the taxable territories for any time in that year ; or (iii) having within the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provision relating to maintenance of a dwelling place coupled with stay in India of 30 days or more referred to in (b) above has been omitted. (ii) In the case of Indian citizens who come on a visit to India, the period of '60 days or more' referred to in (c) above will be raised to '90 days or more'. (iii) Where an individual who is a citizen of India leaves India in any year for the purposes of employment outside India, he will not be treated as resident in India in that year unless he has been in India in that year for 182 days or more. The effect of this amendment will be that the test of residence in (c) above will stand modified to that extent in such cases. 6.4 Further relaxation in law came by the Finance Act, 1990 and the Finance Act, 1994 where in the period of 90 days was increased to 150 days and then from 150 days to 182 days. The legislative intention behind this is provided for by CBDT Circular No. 684 dated June 10, 1994 reported in [1994] 208 ITR (St.) 8, 21 as under : Extending the period of stay in India in the case of non-resident Indians without their losing the non-resident status 19. Under the provisions of clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inate Bench in its decision has noted the findings of the Assessing Officer in that case as under : The Assessing Officer, however, held that the assessee was to be treated as resident and not as non-resident in these years on the following observations : (a) The Explanation (b) to section 6(1)(c) relaxes the 60 days stay in India to 182 days if the individual is an Indian citizen or a person of Indian origin and if he being outside India visits India during that year. According to the Assessing Officer, the assessee, though not citizen, for all practical purposes was resident, i.e. living within India who goes abroad on visits. In other words he was not outside India and came on visit to India. Therefore, he was not eligible for relaxation provided by Explanation (b) as he was not a person who being outside India comes on a visit to India. (b) According to the Assessing Officer 'being outside India' connotes some permanence abroad. It is for the benefit of the person who stays abroad and comes on a visit to India. The Assessee has been staying in India for approximately half of the year during the last ten-fifteen years. (c) The Assessing Officer r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each of his other sources of income. (c) Relevant previous year means, the previous year for which residential status is to be determined. (d) It is not necessary that the stay should be for a continuous period. (e) It is not necessary that the stay should be at one place in India. (f) A person may be resident of more than one country for any previous year. (g) Citizenship of a country and residential status of that country are two separate concepts. A person may be an Indian national/citizen but may not be a resident in India and vice versa. (h) Number of days of stay in India determines the status. (i) Assessee can take any vocation in any of the countries. (j) During these years the assessee had for more greater business engagements abroad as compared to India. Therefore it cannot be assumed that he did not come from outside of India. (k) The Explanation (b) to section 6, the explanatory notes for this amendment as clarified by the CBDT in this behalf also make the number of days provision very clear and unambiguous and leaves no room for interpretation. (l) Even for the sake of arguments we accept the Assessing Officers interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss than 182 days. In these facts and circumstances the assessee's arguments on this issue deserve to be upheld. In view of the facts, circumstances and case law cited and referred above on behalf of the assessee we hold that the determinative test for the status of non-resident being number of days of stay in India and in the assessee's case in these three years, the days of stay being less than 182 days ; the status to be applied in this case is to be held as non-resident as claimed by the assessee. Thus, the assessee will be liable to tax on income accrued in India only. The assessee's grounds in this behalf are allowed. 6.7 The above decision of co-ordinate Bench has also been upheld by the hon'ble jurisdictional High Court where the court has held as under (page 615 of 352 ITR) : The learned counsel for the appellant sought to argue that the respondent-assessee would fall within section 6(1)(c) read with Explanation (b). However, we fail to see as to how that provision would come to aid of the appellant. Section 6(1)(c) applies to citizens of India as well as to persons of Indian origin. It also applies to foreigners. In so far as foreigners are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple health problems since childhood on account of a leaking mitral vale which peaked in 1996 resulting in a heart valve surgery in the first half of 1997. This surgery resulted in a further deterioration of the heart and ultimately total heart failure due to which I had to undergo a heart transplant in 1999 and was advised to spend less time in polluted environments due to strong immune depressant drugs. My son Bhanu Choudhrie and my elder brother's son Dhruv Choudhrie (who I treated as my own son after my brother's death) who after having completed their studies overseas and worked overseas for some time ; did not want to come back to India and wished to settle overseas. Due to all these factors I decided to relocate our whole family to UAE in 2000. Since then we have been living overseas. I was issued residence visa in UAE, copy of which is attached and was living in Dubai with the family. Our address was 7th Floor, Mai Plaza, Zaribat Dhoe, Bur Dubai, Dubai, UAE. In April, 2004, I was issued a highly skilled visa under the migrant program of the United Kingdom and I have been in the UK since then. In the UK I stay at the address given in this letter. Initially I took up a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is applicable only in relation to that year i.e. the year in which employment is taken outside India. Thereafter, for subsequent years, the residential status has to be seen as per the provisions of clause (b) to Explanation 1 since owing to employment/self-employment the assessee is being outside India . In the instant case the assessee is having a special visa type allowing him to work in the UK and the fact that he is working abroad in the UK as a retainer-cum-incentive basis in the year under consideration has also not being doubted by either the Assessing Officer or by the learned Commissioner of Income-tax (Departmental representative). The Assessing Officer has also not doubted the submissions made by the asses see that it has not rendered any services in India with regard to its overseas assignments during visits to India and further that no business activity is being carried on by assessee in India. 6.12 We also find substantial merit in submissions made by the learned authorised representative that the basic document which would show intention of assessee is his passport. In the instant case copies of visa's issued by the UAE and the UK have been placed on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition up to December 9, 2000. Such extension of visit pass continued till the end i.e., till January 4, 2009. In between the respondent had come to India and visited Singapore not less than four occasions. In fact on February 23, 2001, when the visit pass was issued to enter Singapore, it was specifically entered therein that the respondent was not permitted to engage in any business, profession or occupation without a valid work permit till March 9, 2001. Similarly in the visit pass that enabled him to enter Singapore on January 29, 2007, it was specifically mentioned that it was for social visit only that too for 30 days. Again in the visit pass issued on January 8, 2008, an endorsement was specifically made to the effect that he was not permitted to work or engage in any business, profession or occupation without a valid work pass. Similarly, such entry was noted in the visit pass issued on July 5, 2008. Therefore, going by the entries found in the passport it is revealed that the respondent was visiting Singapore from India and it was therefore quite apparent that the statutory documents viz., the pass port which can be relied upon as against any other claim made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to India after a long period of absence there is all the more reason he or she will like to go to visit relatives and friends in different places. Those activities are not necessarily indicators of a visit. When the applicant resigns from her employment in China, the reason for return to India does not seem to be only for a visit. The learned counsel could not give us information whether the applicant left India thereafter for any employment. In such circumstances we do not agree with the learned counsel that the applicant came to India only for a visit. On facts and circumstances of the case we hold that Explanation (b) to section 6(1)(c) of the Act is also not applicable in the applicant's case. 6.15 For the reasons stated above, we do not find any reason to interfere with the finding recorded by the learned Commissioner of Income-tax (Appeals) directing the Assessing Officer to assess the assessee as a non- resident . Ground Nos. 1 and 2 are therefore dismissed. 6.16 In ground Nos. 3 and 4, the Revenue is aggrieved by the action of learned Commissioner of Income-tax (Appeals) in deleting the addition of ₹ 10,21,66,137. Once the residential status of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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