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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per Dr. M. L. Meena, AM:
The appeal by the assessee, is directed against the order dated 10.07.2018 of the Commissioner of income tax appeals-2, Panji (hereinafter referred to as “the CIT appeals”) in respect of assessment year 2014 – 15 wherein the appellant assessee has challenged the decision of the learned CIT appeal, as regards to confirmation of addition of ₹ 16,33,700/- being the income shared with the appellant’s spouse Smt. Vishaya Abdulla by the Kombantavida Abdulla v. ITO application of section 5A of the income tax act 1961 as the appellant is governed by the Portuguese civil code.
The assessee has raised the following grounds of appeal: “1. The honorable CIT(A) confirmed the addition of Rs.16,33,700/- made by the AO, being the income shared with the Appellant’s spouse Smt. Vishaya Abdulla.
2. The above income was shared with his spouse by the application of Sec 5A of the Income Tax Act, 1961 as the appellant is governed by the Portuguese civil code.”
3. At the outset, the learned counsel for the assessee submitted that as per section 5A of the income tax act 1961, the apportionment of income between the spouses governed by Portuguese civil court where the husband and wife are governed by the system of community of property (known under the Portuguese civil court of 1860 in force in the state of Goa and in the union territories of the Dadra and Nagar Haveli and Daman and Diu) the income of the husband and of the wife under any head of income (other than under the head “Salaries”) shall be apportioned equally between the husband and wife and the income so apportioned shall be included separately in the total income of the husband and the wife respectively and the remaining provisions of this act shall apply accordingly. The learned AR further submitted, that the copy of the marriage certificate was produced before the AO as a proof of the appellant’s being Portuguese civil court. The AO being Kombantavida Abdulla v. ITO not satisfied, rejected the claim of the assessee and added the income of the spouse to the total income declared by the appellant.
4. The counsel submitted that, the learned CIT appeal has confirmed the addition without appreciating the facts of the case, by observing vide para 5.3 of the impugned order as under:
5.3 In the instant case, the appellant has admitted that he originally belongs to the state of Kerala and migrated to Goa in 1979 for employment. The appellant is not borne in Goa and nor his parents are borne in Goa. So, to say, before coming to Goa, appellant did not have any connection of himself or his parents to the Portuguese territory. Therefore, as per the domicile certificate produced, the appellant can be a resident of Goa but he can’t be said to be governed by Portuguese civil code. As the appellant’s spouse is a Goan but she loses to be the member of the Portuguese territory after marrying the appellant who is not the member of the Portuguese territory. Hence, the appellant can’t avail the benefit of section 5A of the act. Accordingly, of section 5A to the appellant is upheld.
The learned counsel argued on the issue of sharing of income between the husband and the spouse in view of benefit provided under section 5A of the act. He placed reliance on the Judgement of Hon’ble Kombantavida Abdulla v. ITO Bombay High Court, in the case of “Goa Salaries Taxpayers Association vs Union of India”, [2003] 129 Taxmann 936 (Bombay) wherein the Hon’ble Jurisdictional High Court, vide para 6, has observed as under:
In view of the Division Bench decision as cited above, practically an assessee who is domiciled in Goa and who opted for the Portuguese Civil Code became impossible to apply to principle of community of property in the matter of income-tax assessment and became disentitled to claim the benefit of sharing the income and of the assessment individually. They all became liable for assessment as a body of individuals which created certain harshness to the people of Goa State. Presumably to obviate that difficulty Section 5A has been introduced in the Income-tax Act. A reference to the speech made by the Finance Minister in Parliament in presenting the Finance Budget for 1994-95 makes it amply clear. It reads as under (see [1994] 206 ITR (St.) 5, 30) : "111. The system of community of property (Communiao Dos Bens) is peculiar to the people living in Goa, Daman, Diu, Dadra and Nagar Haveli. Recently, certain judicial decisions have been handed down according to which business income of a Goanese family becomes taxable entirely in the hands of a single entity. The decisions affect the time honoured method of dividing such income equally and assessing such income separately in the hands of the husband and wife. This I understand has given rise to unnecessary tensions and anxiety amongst the Goan couples. To set at rest all controversies in this area, I propose to make suitable amendments in the Income-tax Act to ensure that, excepting for salaries, any other income arising to the citizens governed by the system of community of property in Goa, will be divided equally and assessed separately in the hands of the husband and the wife." 6. Per Contra, the learned DR supported the impugned order. He contended that the assessee is not governed by Portuguese Civil Law and the judgement of the Hon’ble Bombay High Court is no help to the assessee.
We have heard both the sides, perused the material on record and the Judgement cited before us. Admittedly, the appellant assessee originally belongs to the state of Kerala and migrated to Goa in 1979 for Kombantavida Abdulla v. ITO employment. It is also not under dispute that the appellant was not borne in Goa and nor his parents are borne in Goa. Thus, before coming to Goa, appellant did not have any connection of himself or his parents to the Portuguese territory. Therefore, as per the domicile certificate produced, the appellant can be said to a resident of Goa but he can’t be said to be governed by Portuguese civil code. Since, the appellant’s spouse was a Goan but she loses to be the member of the Portuguese territory, after marrying the appellant who is not the member of the Portuguese territory as rightly held by the Ld. CIT(A). In our view, the appellant can’t avail the benefit of section 5A of the act. The Judgement of Hon’ble Bombay High Court, in the case of “Goa Salaries Taxpayers Association vs Union of India” (supra) is distinguishable on peculiar facts of the case as in the instant case the appellant was not governed by Portuguese civil code, rather the appellant’s spouse though Goan but she loses to be the member of the Portuguese territory, after marrying the appellant who is not the member of the Portuguese territory. Thus, the benefit of the application of section 5A of the income tax act 1961, is not available to the appellant.
In the above view, we do not find any infirmity in the order of the Ld. CIT (A) and accordingly, the finding of the CIT (A), in confirming the addition Kombantavida Abdulla v. ITO of Rs.16,33,700/- is hereby sustained. The grounds of appeal of the assessee are dismissed.
In the result, the appeal filed by the assessee is dismissed Order pronounced in the open court on 18.05.2022.