TMI Blog2005 (5) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be a non-resident and should have been assessed as such in the previous year. The above view is also not tenable because section 115H is applicable when a non-resident in a previous year becomes a resident and liable for taxation - In this case, we are in full agreement with the views of the Tribunal and therefore the question of law referred are to be answered in favour of the assessee and the appeal is dismissed - - - - - Dated:- 19-5-2005 - Judge(s) : J. B. KOSHY., K. T. SANKARAN. JUDGMENT The judgment of the court was delivered by J.B. Koshy J. - This appeal is filed by the Revenue raising the following questions as substantial questions of law arising from the order of the Income-tax Appellate Tribunal: "1. Whether, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Tribunal in another assessee's case in I.T.A. No. 462/Coch./ 95 wherein the same question was decided in favour of the assessee. It was pointed out by counsel for the assessee that no appeal was filed by the Revenue for the assessment years 1988-89 and 1989-90 also though the same issue was decided in favour of the assessee. However, the appeal was filed by the Revenue for this assessment year alone. We may first consider the relevant sections. Section 10(4)(ii) is quoted below: "10. Incomes not included in total income.- In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- ... (4)(ii) in the case of an individual, any income by way of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to such income for that assessment year and for every subsequent assessment year until the transfer or conversion (otherwise than by transfer) into money of such assets." In this appeal, the Revenue has no dispute that the income in question is arising out of a foreign exchange asset as mentioned in clause (f) of section 115C. We may also extract section 115E(1): "115E. Tax on investment income and long-term capital gains. - (1) Where the total income of an assessee, being a non-resident Indian, consists only of investment income or income by way of long-term capital gains or both, the tax payable by him on his total income shall be the amount of income-tax calculated on such total income at the rate of twenty per cent, of such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limited company and Central Government securities, acquired in convertible foreign exchange, until the transfer or conversion (otherwise than by transfer) into money of such asset." A perusal of the section clearly shows that the concessional rate of tax provided under sections 115H and 115E is enacted with a beneficial object intended to give concessional rate of tax to persons like the assessee on the income of investment they made while they were non-residents, in spite of the fact that they became residents subsequently provided the foreign exchange is not converted. They are entitled to concessional rate provided they conform to the procedure prescribed under section 115H. On going through the section, we see no room for a different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 915, at page 919 and Tata Oil Mills Co. Ltd. v. CCE [1991] 82 STC 225; AIR 1990 SC 27, at page 30). An exemption notification cannot be denied full effect by any circuitous process of interpretation. (Swadeshi Polytex Ltd. v. CCE, AIR 1990 SC 301 at page 306. The apex court in Collector of Customs v. Bharat Heavy Electricals Ltd. [1992] 61 ELT 332 (SC) held that a reasonable construction which gives effect to true intent and purpose of the provisions has to be adopted without violating the language of the notification. It is true that the question whether exemption is applicable shall be construed strictly and once the doubt about the applicability is lifted, exemption shall be given a wider and liberal construction as held by the apex cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " A contention was raised by senior standing counsel that to apply section 115H, the assessee should be a non-resident and should have been assessed as such in the previous year. The above view is also not tenable because section 115H is applicable when a non-resident in a previous year becomes a resident and liable for taxation. We also note that with regard to another assessee, the same view was taken by the Tribunal and the Department accepted the same for the previous years in the assessee's case also. Those orders were allowed to become final. The Department should be consistent at least in respect of the same assessee and it cannot also differentiate between various assessees as held by the three-member Bench of the apex court in Un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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