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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI C. N. PRASAD, JM
O R D E R Per Shamim Yahya, A. M.: This appeal by the Revenue is directed against the order by the Commissioner of Income Tax (Appeals)-49, Mumbai dated 18.01.2016 and pertains to the assessment year 2010-11.
The grounds of the appeal read as under:
"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding the status of the assessee as "non-resident" without appreciating the fact that the assessee is not covered by Explanation (b) of Section 6(1 )(c) of the IT Act." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.5,66,97,262/- u/s 68 of the Act on account of unexplained deposits in Indian bank accounts merely on the evidence of transfer of fund and confirmation, without appreciating the fact that the assessee has not furnished any details of the source of the funds and that the assessee is not covered by Explanation (b) of Section 6(1 )(c) of the IT Act." Apropos ground no.1:
Shri Bindo Kumar Singh 3. Brief facts of the case are that the assessee filed his return of income on 31.07.2010 declaring total income at Rs.21,49,720/-. The assessee is the Director of the Genom Biotech Pvt Ltd as well as the major shareholder of the company. During the year, the assessee derived income from house property, income from other sources and income from capital gain. During the assessment proceedings it was noticed that the assessee residential status is non-residential. During the assessment proceedings the ld. Counsel of the assessee was asked to justify that the assessee is non-residence. The assessee furnished copies of the passport along with the details of no. of days of stay in India.
Date of arrival - date of departure No. of days of stay as No. of days stay by (as per immigration Seal) per Assessing Officer excluding the day of arrival 18.04.2009 18 18 13.06.2009-16.06.2009 4 3 06.07.2009-16.09.2009 73 72 22.09.2009-15.10.2009 24 23 03.03.2010-31.03.2010 29 28 Total Nos. of days in India 148 144
During the assessment proceedings the Assessing Officer proposed to consider the residential status of the assessee as "resident and ordinarily resident" based on the fact that the assessee’s stay in India exceeds 60 days. In response to the same, the assessee submitted that the assessee was visiting India, during the relevant previous year, to attend to his investments and business affairs of the company in India. The Assessing Officer's attention was drawn to the Explanation (b) to section 6(1)(c) of the Act which deals with cases where an Indian citizen or a person of Indian origin comes on a visit to India then the number of days to be considered for status as a "resident" becomes 182 days as Shri Bindo Kumar Singh against 60 days for other circumstances. It was reiterated that since assessee's stay in India is less than 182 days, the appellant's residential status for income tax purposes is "non-resident".
The Assessing Officer has not accepted the assessee's contention by concluding that the benefit of Explanation (b) to section 6(1 )(c) is available only to those persons who are permanently domiciled abroad, carry out business or profession abroad and for certain reasons visit India. The Assessing Officer has then assessed the assessee for the relevant assessment year as "resident and ordinarily resident" and rejected the assessee's claim that the assessee is "non-resident”.
Before the ld. Commissioner of Income Tax (Appeals), it was submitted that the Assessing Officer has failed to appreciate the fact that the assessee carries out business activities outside India and visits India for the purposes of managing his investments and business interests. That the issue of residential status of the assessee was first raised by the Assessing Officer in the order u/s.143(3) r.w.s.153A for A.Y.2003-04 to A.Y.2009-10 in which on similar facts, the Assessing Officer had taxed the assessee by considering his residential status as "resident and ordinarily resident" as against "non-resident" claimed by the assessee. That the assessee filed an appeal against the said order before the ld. Commissioner of Income Tax (Appeals) who confirmed the residential status of the assessee as "non-resident". That the department's appeal before the ITAT were dismissed by the ITAT where the ITAT also confirmed the order of ld. Commissioner of Income
Shri Bindo Kumar Singh Tax (Appeals) and held that the residential status of the assessee is that of a "non- resident".
Considering the above, the ld. Commissioner of Income Tax (Appeals) placed reliance upon the assessee’s own case for earlier year decision held by this tribunal in assessee’s favour on this issue. The same reads as under:
5.2. I have gone through the order of the ITAT.Mumbai Bench 'B' Mumbai dated 18/12/2015 which is a consolidated order for A.Yrs 2006-07, 2007-08 to 2009-10 and 2003-04 to 2005-06 . In para 2.9 it has been observed as under: "It is also noted that for A.Y.2007-08, the contention of the assessee as well as other details, contention of the Assessing Officer were considered holding that the period of stay of the assessee in India was 173 days as against 178 days determined by the Assessing Officer, meaning thereby, the period of stay was less than 182 days, therefore, in view of the terms of section 6(1)(c) of the Act read with Explanation (b) his status was non- resident, therefore, the global income cannot be taxed in India. We, therefore, on this issue, affirm the conclusion of the Ld. Commissioner of Income Tax (Appeals)." Further considering the background of the assessee.it is clear that he is an Indian citizen who is conducting business in Ukraine, Russia and CSI countries and he is living with his family in England. During the previous year 2009-10, he has come on a visit to India on 5 occasions and therefore explanation (b) to sec.6(1) is applicable to the case of the appellant and he could be treated as resident if he had stayed during the said previous year in India for 182 days or more. 5.3. I find that the appellant has stayed in India for 144 days during the previous year under consideration, excluding the days of arrival which are four days. Accordingly, the residential status of the appellant is found to be non-resident. The A.O, is directed to treat the residential status of the appellant as non-resident for A.Y.2010-11.
Apropos ground no.2:
On perusal of capital account for the year ending 31.03.2009, the A.O. found that the assessee has shown remittance of Rs.5,66,97,262/- into his Indian bank accounts and the same is shown in the capital account under the narration 'Repatriation of funds from Shri Bindo Kumar Singh overseas a/c.". On perusal of the assessee's bank accounts it was seen that the amount has been deposited in them during the year. The assessee was asked to explain source of this remittance. However he submitted that these remittances are from his foreign sources and need not be explained as he is an NRI. The A.O. opined that the assessee failed to give this source of amount deposited in his bank a/c, nature of business/professional activities carried on by him from where the money has been generated. Except submitting that the amount is coming through a banking channel no evidence has been produced by him.
Hence, the A.O. treated it as explained credit u/s.68 and added to the returned income.
Upon the assessee’s appeal, the ld. Commissioner of Income Tax (Appeals) deleted the addition placing reliance upon the ITAT decision in the earlier year. He held as under:
6.3. Since in the para 5.3 above, it has been held that the appellant is a non- resident and once it is admitted that the remittances have come through banking channel from abroad, the same cannot be treated as unexplained cash credits u/s.68 of the Act. per sec.5(2),the total income of a non-resident will include all income which is received or deemed to be received in India in such year by or on behalf of such person, or (b) accrue or arises or deemed to accrue or arise to him in India during such year. Since the appellant, who is an NRI has only brought in remittances from abroad, lie same cannot be treated as income of the appellant since foreign income is not taxable in India. Reliance is also placed on the decision of the ITAT, Mumbai dated 18/12/2015 in appellant’s own case for A.Y. 2008-09 wherein it was held that since the status was non-resident, the global income cannot be taxed in India. Accordingly, the addition of Rs.5,66,97,262/- is deleted.
Against the above order, the Revenue is in appeal before us.
At the outset, on both the issues, the ld. Counsel of the assessee placed reliance upon the decision of the ITAT in assessee’s own case as above and stated that the issues
Shri Bindo Kumar Singh are covered in favour of the assessee. He submitted that on identical facts, this tribunal in assessee’s own case vide common order dated 18.12.2015 has decided the consolidated order for seven years from A.Ys. 2003-04 to 2009-10 and has decided the issues in favour of the assessee. He submitted that in deciding both the issues, the ld. CIT(A) has referred to same ITAT decision. Hence, the ld. Counsel of the assessee submitted that the order of the ld. CIT(A) needs to be affirmed. He further referred to another ITAT decision in the case of Dy. CIT vs. Madhusudhan Rao [2015] 57 taxmann.com 262 (Hyd.
Trib) stating that this case law also supports the case of the assessee.
Per contra, the ld. Departmental Representative (‘ld. DR' for short) relied upon the orders of the A.O. However, he did not dispute the proposition that the identical issues have been decided by the ITAT in favour of the assessee. No contrary decision has also been referred by the Revenue.
Upon careful consideration, we find that on both the issues raised in this appeal by the Revenue, the ITAT by a consolidated order in the case of the same assessee for seven years from A.Ys. 2003-04 to 2009-10 has decided the issues in favour of the assessee.
The ld. CIT(A) has adjudicated the issues by relying upon the said order of the ITAT in assessee’s own case. We find that there no difference in facts in the present case as compared to the aforesaid consolidated order in assessee’s own case for seven years has been pointed out by the Revenue. No other contrary decision has also been produced before us. It is also not the case that the Hon'ble jurisdictional High Court has reversed the order of the ITAT in assessee’s own case as above. Accordingly, in the background of Shri Bindo Kumar Singh the aforesaid precedent, we do not find any infirmity in the order of the ld. CIT(A) as the same is based upon the order of the ITAT in assessee’s own case for several earlier assessment years.
In the result, this appeal by the Revenue stands dismissed.
Order pronounced in the open court on 07.09.2018