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Facts
The assessee, an individual, initially filed a return as a resident but later filed a revised return as a non-resident, reducing dividend income. The AO did not accept the non-resident status due to lack of documentary evidence. The CIT(A) dismissed the appeal, upholding the disallowance based on Section 115BBDA.
Held
The Tribunal set aside the assessment and remitted the issue of the assessee's residential status to the AO for de novo assessment. Similarly, the issue of dividend income's eligibility for deduction as a non-resident was also remitted for fresh consideration.
Key Issues
1. Whether the assessee is a resident or non-resident Indian. 2. Eligibility of dividend income for deduction for a non-resident.
Sections Cited
115BBDA
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Addl/JCIT(A)-9, Mumbai dated 30/12/2024 in respect of the A.Y. 2017-18.
The assessee is an individual and originally filed his return of income in the capacity of resident by mistake and therefore he filed the revised return in the capacity of non-resident. In the revised return, the assessee had reduced the dividend income on the ground that he being a non- resident, reduction is justifiable. The AO not accepted the case of the assessee for the reason that he had not furnished any documentary evidences in support of the claim of exemption and also not furnished any supporting evidences to prove that his status is non-resident. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and submitted that he is a non-resident as evidenced from the appointment letter issued by the UAE company and also filed a certificate issued by the said company about his period of appointment i.e. from 03/04/2016 to 08/02/2017 in Ajman, UAE. The assessee also submitted the termination of service letter and the copy of the 3 pages of the passport in support of his case. The Ld.CIT(A) had dismissed the appeal on the ground that the stay details were not provided by the assessee and also the assessee had not submitted the entire passbook for verification. Insofar as the dividend income, the Ld.CIT(A) had relied on section 115BBDA and confirmed the disallowance for the assessment year 2017-18.
As against the said order, the assessee is in appeal before this Tribunal.
At the time of hearing, the assessee submitted some more documents in the paper book and contended that the documents would establish the fact that the assessee is a non-resident. The Ld.AR further submitted that the dividend income is exempt in the hands of the non-resident Indian and even assuming that the same is subjected to tax, at the maximum the 10% of the dividend income has to be taxed and not at the rate at 30%.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
In this appeal, there are two issues to be decided.
The first issue to be decided is whether the assessee is a resident or non-resident Indian on the given facts and circumstances of the present case. Before the Ld.CIT(A), the assessee had filed all the details but the Ld.CIT(A) had not accepted the said details since the assessee had not furnished the details of his stay. When the assessee was employed in Ajman, UAE and he worked there upto 08/02/2017, the normal presumption would be that he had stayed in Ajman, UAE. But the Ld.CIT(A) had observed that the stay details were not provided therein when the details furnished by the assessee shows that he was employed upto 08/02/2017 in Ajman, UAE. The another reason stated by the Ld.CIT(A) is that the assessee had not provided the full set of the passport. Now before us, the assessee had filed the documents about his employment in Ajman, UAE and also explained that he was in India only for a period of 48 days. The assessee also furnished the copy of the passport in support of his claim that his stay in India was only 48 days. The said documents were not produced before the AO but some part of the documents were furnished before the Ld.CIT(A). In such circumstances, in order to give an opportunity to the assessing officer, we are setting aside the assessment and remit the issue to the AO for passing denovo assessment order based on the documents submitted by the assessee and decide the status of the assessee accordingly.
The second issue to be decided is whether the dividend income received by the assessee is eligible for deduction, being the assessee as a non-resident. Since the issue of the status of the assessee has been remitted to the AO, we also remit this issue to the AO for fresh consideration including the claim made by the assessee that the dividend income at the best can be taken at 10% of the total dividend income as per the provisions of the Act.
Order pronounced in the open court on 27th May, 2025.