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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. SANJAY ARORA & SH. N.K.CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A No.510(Asr)/2017 Assessment Year:2011-12
Income Tax Officer, vs. Sh. Rajesh Joshi Ward-IV(1), Prop. Yash Enterprises, Jalandhar Opp. UCO Bank, Jandu Singha Jalandhar PAN:AGIPJ-8312L (Appellant) (Respondent) Appellant by : Sh. Rajeev Gubgotra (DR) Respondent by: Sh. Ashray Sarna (CA) Date of hearing: 20.12.2017 Date of pronouncement: 29.01.2018 ORDER Per: Sanjay Arora, AM This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)-2, Jalandhar [‘CIT(A)’ for short] dated 13.06.2017, allowing the assessee’s appeal contesting his assessment u/s. 143(3) of the Income Tax Act, 1961 ( ‘the Act’ hereinafter) for Assessment Year (AY) 2011- 12 vide order dated 19/3/2014.
The short question arising in the instant appeal is whether the assessee individual is for the relevant year a resident or a non-resident in India. This is as the assessee, a citizen of India, apart from the returned income, earned salary of Rs.65,11,553/- from a non-resident company, M/s Transocean Sedco Forex International Inc., working on it’s offshore drilling unit. It is the taxability of this sum under the Act which is a subject matter of dispute between the assessee and the Revenue.
2 ITA No.510 (Asr)/2017(A.Y.2011-12) ITO vs. Rajesh Joshi
The factual basis for the Revenue to contend that the assessee is a resident in India for the relevant year is the fact that he stayed in India for a period of six hundred and sixteen (616) days during the four years immediately proceeding the relevant previous year, i.e., f.y.2010-11, and for one hundred sixty (160) days during the relevant previous year. The law (per sec. 2(42)) mandates the residential status to be determined with reference to section 6 of the Act. The assessee seeking refuse of Explanation-1(a) to section 6 (1), which provides for an exception for the year in which an assessee leaves India on employment outside India, would, on being questioned in the matter, furnish a copy of an unsigned letter dated March 10, 2014 by one M/s. Transocean Sedco Forex International Inc., Guinea Equatorial, which states the assessee (without mentioning his passport number or even his fathers’ name) to have been assigned operations in Guinea Equatorial from January, 2010 to August, 2011, earning US $ denominated monthly salary. Apart from the fact that this letter constitutes additional evidence, and is even otherwise unsigned, it is clear there-from that the assessee left India for employment outside India in January, 2010, if not earlier, i.e., during the previous year relevant to AY 2010-11. The benefit of Explanation 1(a) to sec.6(1), providing for an extended time period of 182 days in India for that year, i.e., during which an assessee leaves India for employment abroad, and yet not be regarded as a resident, would therefore not be applicable for the relevant previous year. In fact, as a perusal of the assessee’s passport, adduced by the ld. Authorized Representative (AR), the assessee’s counsel, in support of an alternative plea, shows, the assessee could have left India even prior to January, 2010, and which could be for employment with the same or any other employer. The benefit of Explanation 1(a) to s. 6(1) would thus not be available for the relevant previous year, i.e., f.y.2010-11.
3 ITA No.510 (Asr)/2017(A.Y.2011-12) ITO vs. Rajesh Joshi
So, however, the assessee, as it transpires during the hearing, visited India during the relevant previous year, i.e., f.y.2010-11, so that Explanation 1(b) to sec. 6(1) may stand attracted, which similarly extends the threshold limit - for stay in India to Indian citizens visiting India, without being regarded as a resident of India, to 182 days. We say so as from the assessee’s passport, copy of which was furnished during hearing, it appears that the assessee arrived in India on April 25, 2010 and departed there-from on May 27, 2010. The assessee was, as it appears, in employment abroad during the relevant period, falling within the relevant previous year. The 182 day time limit should, therefore, apply to the assessee, making him a non resident in terms of Explanation 1(b) to section 6(1), which reads as under:
'Residence in India. 6. For the purposes of this Act,- (1) An individual is 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 eight-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. Explanation.1 In the case of an individual,- (a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1968 (44 of 1958), or for the purpose of employment outside India, the provision of sub-clause ( c) shall apply in relation to that year as if the words "sixty days", occurring therein, the words "one hundred and eighty two days" had been substituted; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and [eight-two] days” had been substituted.'
The bringing of salary, earned abroad, to India would not make it taxable in India u/s 5(2)(a), as clarified by the Tribunal in Arvind Singh Chauhan (in ITA Nos. 319
4 ITA No.510 (Asr)/2017(A.Y.2011-12) ITO vs. Rajesh Joshi
& 320/Agr./2013, dated 14/02/2014), as well as in fact by the Board itself per its Circular (No. 13 of 2017, dated 11/4/2017). The letter afore-referred being unsigned, we, under the circumstances, only consider it proper to remit the matter back to the file of the AO. The assessee’s passport, coupled with an authenticated proof of his employment outside India since prior to April 1, 2010, would make the assessee a non-resident in India for the relevant year, so that no part of his salary earned outside of India would be taxable in India. We make this abundantly clear. Needless to add, the Revenues’ reliance on section 6(5), which provides that all the income of a resident would be taxable in India, is of little consequence in-as-much as the law per sec.5(1) is clear and, further, the assessee’s case, which we approve in principle, is that he was not a resident in India for the relevant year. We decide accordingly.
In the result, the Revenue’s appeal is allowed for statistical purposes.
Order pronounced in the open Court on January 29.01.2018
Sd/- Sd/- (N.K.Choudhary) (Sanjay Arora) Judicial Member Accountant Member Dated:29 /01/2018 /PK/ PS Copy of the order forwarded to: (1) The Assessee: (2) The Respondent (3) The CIT(A)-2, Jalandhar (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True copy By Order