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Facts
The assessee filed an Income Tax Return for AY 2013-14, which was subsequently reopened under Section 148. The core issue was the assessee's claim for exemption under Section 10(4)(ii) for interest earned on NRE deposits. The Assessing Officer disallowed the claim, citing the assessee's resident status and lack of evidence, and this disallowance was upheld by the CIT(A).
Held
The Tribunal, noting that the Departmental Representative admitted the bank confirmed the existence of NRE deposits, remitted the matter back to the files of the CIT(A). The CIT(A) is directed to freshly examine the issue in light of the additional documentary evidence provided.
Key Issues
Whether the assessee was a non-resident Indian (NRI) during the relevant period, making them eligible for exemption under Section 10(4)(ii) of the Income Tax Act for interest earned on NRE deposits.
Sections Cited
143(1), 148, 10(4)(ii), 10(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Prakash Chand Yadav
O R D E R
Per Prakash Chand Yadav, JM :
The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 26.07.2024, having DIN & Order No.ITBA/NFAC/S/250/2024- 25/1067071732(1) and relates to the assessment year 2017- 2018.
All these appeals are arising from the order of the National Faceless Appeal Centre / learned Commissioner of
3. Since common issues are involved in these appeals, they were heard together and are being disposed of by this consolidated order, for the sake of convenience. We take for assessment year 2013-2014, as a lead appeal for adjudication, and to state that the decision that would arrive at therein, would be applicable mutatis mutandis to other appeals as well.
The assessee is an individual filed his return of income on 12th June, 2013 declaring total income of Rs.1,27,39,160. The same was processed u/s.143(1) of the Income-tax Act, and thereafter the case of the assessee was reopened u/s.148 vide notice dated 29th March, 2019. The solitary issue involved in these appeal is the claim of the assessee u/s.10(4)(ii), earned by the assessee as interest on NRE deposit with various banks.
During the course of assessment proceedings, the Assessing Officer observed that the assessee derived income from capital gain, interest from bank deposit, etc. The A.O. disallowed the claim of the assessee on the ground that the assessee failed to furnish any evidence with respect to the interest earned on NRE deposits. The AO has relied upon the provisions of FEMA for disallowing the claim of the assessee u/s.10(4) of the Act. The AO further observed that the assessee was a resident of India and holding trade licence in Dubai.
Aggrieved with the order of the AO, the assessee filed an appeal before the CIT(A) and argued that the AO has wrongly relied upon the provisions of FEMA for construing that the assessee was not NRI during the relevant period. However, the CIT(A) could not find any force in the arguments of the assessee and dismissed the appeal of the assessee.
Aggrieved with the order of the AO, the assessee has come up in appeal and filed certain additional evidences in order to show that he was non-resident during the relevant period and has earned interest in NRE account. However, the assessee failed to satisfy the bench with documentary evidences.
The learned DR appearing on behalf of the Revenue fairly admitted that on oral inquiry from the bank, the bank has accepted that deposits were there in the NRE account of the assessee. Therefore, in the interest of justice, we remit the issue to the files of the CIT(A) to examine the issue afresh in the light of the documentary evidences filed before us.
In the result, all the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced on this 30th day of May, 2025.