P K KUNHIRAMAN,THRISSUR vs. DEPUTY COMMISSIONER OF INCOME TAX, THRISSUR
Facts
The assessee's case for various assessment years (including AY 2013-14 as the lead case) was reopened under Section 148. The Assessing Officer disallowed the assessee's claim for exemption of interest income from NRE deposits under Section 10(4)(ii), treating the assessee as a resident and relying on FEMA provisions. The CIT(A) subsequently dismissed the assessee's appeal.
Held
The Income Tax Appellate Tribunal noted that the Departmental Representative conceded that bank inquiries confirmed the existence of NRE account deposits. Considering this and additional documentary evidence submitted by the assessee, the ITAT remitted the entire issue back to the CIT(A) for a fresh examination and adjudication on merits.
Key Issues
Whether interest income earned on NRE deposits is exempt under Section 10(4)(ii) of the Income Tax Act, and whether the assessee qualified as a non-resident during the relevant period as per the provisions of FEMA and Income Tax Act.
Sections Cited
143(1), 148, 10(4), 10(4)(ii)
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
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.672/Coch/2024 : Asst.Year 2013-2014 ITA No.674/Coch/2024 : Asst.Year 2014-2015 ITA No.680/Coch/2024 : Asst.Year 2015-2016 ITA No.681/Coch/2024 : Asst.Year 2015-2017 Pathirikattu Kalam The Dy.Commissioner of Kunhiraman, v. Income-tax, TC 48/72, Remya Circle 2(1) Civil Lines Road Thrissur. Ayyanthole, Trichur-680003 PAN : ANIPK6883C. (Appellant) (Respondent) Appellant by : Sri.V.N.Guruvayurappan, CA Respondent by : Sri.Sundarasan S, CIT-DR & Smt.Leena Lal, Sr.AR Date of Pronouncement : 30.05.2025 Date of Hearing : 27.05.2025. 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
2 ITA No.672/Coch/2024. Pathirikattu Kalam Kunhiraman. Income-tax [“the CIT(A) for short] and relates to assessment years 2013-2014, 2014-2015, 2015-2016 and 2016-2017, respectively.
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 ITA No.672/Coch/2024 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.
3 ITA No.672/Coch/2024. Pathirikattu Kalam Kunhiraman.
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.
Sd/- Sd/- (Inturi Rama Rao) (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 30th May, 2025. Devadas G*
4 ITA No.672/Coch/2024. Pathirikattu Kalam Kunhiraman.
Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin
