ElumalaiSelvam, CHENNAI V. ITO, CHENNAI

ITA 1410/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4068 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 01-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C YAMUNA
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Salary income; Earning of tax free income
• Section: 5(2); 90

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , , $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NOS. 1409 & 1410/MDS/2017 / ASSESSMENT YEAR : 2012-13 M/S. ELUMALAI SELVAM, C/O CNGSN & ASSOCIATES LLP, SWATHI COURT, FLAT CIT(A) & D, NO. 43, VIJAYARAGHAVA ROAD, T NAGAR, CHENNAI 600 017. [PAN: ARBPS 4581J] VS. INCOME TAX OFFICER, INTERNATIONAL TAXATION 2(2), CHENNAI 600 034. ( / APPELLANT) ( / RESPONDENT) & ' / APPELLANT BY : SHRI B. RAMAKRISHNAN, CA *+& ' / RESPONDENT BY : SHRI C. YAMUNA, JCIT ' /DATE OF HEARING : 04.07.2017 ' /DATE OF PRONOUNCEMENT : 10.07.2017 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THESE APPEALS AGAINST THE ORDE RS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-16, CHENNAI IN ITA NOS. 54 & 55/CIT(A)-16/AY 2012-13 DATED 31.03.2017. :-2-: I.T.A. N0S. 1409 & 1410/MDS/2017 2. SHRI ELUMALAISELVAM, THE ASSESSEE, FILED HIS RET URN FOR ASSESSMENT YEAR 2012-13 DECLARING A TOTAL INCOME AT RS. 23,77,559/- FROM SALARY AND SOUGHT RELIEF U/SS. 90 AND 91 FOR RS. 23,77,559/-. BEFOR E THE AO, HE CONTENDED THAT HIS RESIDENTIAL STATUES WAS NON-RESIDENT. HE WAS A WAY FROM INDIA FOR MORE THAN 180 DAYS DURING THE RELEVANT PERIOD. HE WAS E MPLOYED WITH BARNAD SHULTE INDIA AS SECOND ENGINEER, THE RELIEF U/S. 90 WAS WRONGLY CLAIMED INSTEAD OF CLAIMING THE EXEMPT INCOME. THE AO ASKE D HIM TO SUBSTANTIATE HIS CLAIM. THE ASSESSEE COULD NOT PRODUCE BEFORE THE A O THE EMPLOYER CERTIFICATE OR COPY OF FORM 16, BY WHICH, THE SOURCE OF SALARY AND THAT HE WAS IN INTERNATIONAL WATERS ETC., COULD BE ESTABLISHED. T HEREFORE, THE AO HELD THAT THE SALARY IS LIABLE TO TAX IN INDIA U/S. 5(2) OF T HE ACT AND ACCORDINGLY FINALISED THE ASSESSMENT DETERMINING THE INCOME AT RS. 23,77, 559/- AND INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C). AGGRIEVED BY T HIS ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) HELD THAT EVEN DURING THE APPEAL PROCEEDINGS THE ASSESSEE COULD NOT PROVE THA T HE EARNED INCOME FROM SALARY AND THAT HE WAS IN INTERNATIONAL WATERS ETC. , AND HENCE DISMISSED THE APPEAL. 3. IN PURSUANCE OF THE PENALTY NOTICE, THE AO AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AND AFTER CONSIDERING HIS REPLY, LE VIED A PENALTY OF RS. 5,82,226/- U/S. 271(1)(C) TOWARDS THE INACCURATE CL AIM WHICH RESULTED IN CONCEALMENT OF INCOME. :-3-: I.T.A. N0S. 1409 & 1410/MDS/2017 4. SINCE, BOTH THE APPEALS ARE INTER-CONNECTED AND FOR THE SAME ASSESSMENT YEAR, THEY ARE HEARD TOGETHER AND DISPOS ED OFF BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 4.1 THE AR SUBMITTED THAT THE ASSESSEE IS A NRI, SA ILOR, MARINE ENGINEER AND WAS EMPLOYED WITH OMCI SHIP MANAGEMENT PVT. LTD . (OMCI). SEEKING OUR ATTENTION TO PAGE NO. 1 OF THE PAPER BOOK, WHER EIN, A COPY OF THE CERTIFICATE ISSUED BY THE OMCI DATED 26.06.2016 SIG NED BY SHRI SUHAS PANDE, TECHNICAL MANAGER, POINTED OUT THAT THE ASSESSEE SE RVED ON DIFFERENT DATES, SAY, FROM 11 TH AUGUST, 2010 TO 30 TH MARCH, 2012 IN VARIOUS VESSELS GIVING RANK, TRADE, WAGES PER MONTH IN USD ETC. HE TOOK O UR ATTENTION TO THE COPY OF THE DISCHARGE CERTIFICATE IN PAGE 2, WHEREIN THE NAME OF THE SHIP AND OFFICIAL NO. OF THE TUNNAGE, DATE AND PLACE OF ENGA GEMENT AND DISCHARGE, RATING, DESCRIPTION OF VOYAGE, SIGNATURE OF MASTER, BAR COUNSELLOR, OFFICER ETC IS MENTIONED. THEREAFTER, HE SOUGHT OUT ATTENTION TO THE COPIES OF STATEMENT OF ACCOUNT WITH HSBC FOR THE PERIOD 31.05.2011 TO 2 7.03.2012 IN ACCOUNT NO. 041-261629-006, PRODUCT TYPE - SAVING ACCOUNT-NRE A ND AXIS BANK FOR THE PERIOD FROM 01.01.2012 TO 30.03.2012, ACCOUNT NO. 9 11010009538757, CUSTOMER NO. 837945638, SCHEME, SB-NRE NORMAL AND A COPY OF SEAMANS EMPLOYMENT CONTRACT FROM BERNHARD SCHULTE SHIP MANA GEMENT AND SOUGHT OUR ATTENTION TO DATE OF COMMENCEMENT OF CONTRACT 0 9.08.2012 AND THE :-4-: I.T.A. N0S. 1409 & 1410/MDS/2017 COPIES OF CERTIFICATES TESTIMONIAL FOR SEA SERVICE- ENGINEERS ISSUED BY BERNARD SCHULTE SHIP MANAGEMENT FOR VARIOUS PERIOD ETC AND PLEADED THAT THE ASSESSEE WAS A NRI, EMPLOYED WITH OMCI, EARNED SALA RY IN NRI ACCOUNT AND AS PER BOARD CIRCULAR NO. 13/2017 DATED 11.04.2007 READ WITH CIRCULAR NO. 17/2017 DATED 26.04.2017 WHICH CLARIFIED THAT SALAR Y ACCRUED TO A NON- RESIDENT SEAFARER FOR SERVICES RENDERED OUTSIDE IND IA ON A FOREIGN SHIP SHALL NOT BE INCLUDED IN THE TOTAL INCOME MERELY BECAUSE THE SAID SALARY HAS BEEN CREDITED IN THE NRE ACCOUNT MAINTAINED WITH AN INDI AN BANK BY THE SEAFARER ETC PLEADED THAT THE ADDITION MADE AND THE PENALTY LEVIED MAY BE DELETED. PER CONTRA, THE DR RELIED ON THE ORDERS OF THE CIT( A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE ORDERS OF THE AO, THE CIT(A) AND THE COPIES OF THE DOCUMENTS PLAC ED IN THE PAPER BOOK. SINCE, THESE DOCUMENTS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER AND THE ASSOCIATED FACTS AND CIRCUMSTANCES WERE NOT EXA MINED DULY BY THE AO, WE REMIT THESE ISSUES TO THE ASSESSING OFFICER FOR DUE EXAMINATION/VERIFICATION AND FOR PASSING A SPEAKING ORDER, AFTER AFFORDING R EASONABLE OPPORTUNITY TO THE ASSESSEE. SINCE, THE QUANTUM APPEAL IS REMITTE D BACK TO THE AO, WE DEEM IT FIT TO REMIT THE PENALTY PROCEEDINGS ALSO F OR A FRESH CONSIDERATION. 6. IN THE RESULT, THE ASSESSEES APPEALS ARE TREATE D AS ALLOWED FOR STATISTICAL PURPOSE. :-5-: I.T.A. N0S. 1409 & 1410/MDS/2017 ORDER PRONOUNCED ON MONDAY, THE 10 TH DAY OF JULY, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) ! ' /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) ' /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 10 TH JULY, 2017 JPV ' *23 43 /COPY TO: 1. &/ APPELLANT 2. *+& /RESPONDENT 3. 5 ( )/CIT(A) 4. 5 /CIT 5. 3 * /DR 6. 8 /GF