Sudhanshu Mohapatra, Kolkata V. DDIT (IT)- 2(1), KOLKATA, Kolkata

ITA 452/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1697 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 29-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 15-03-2016
• Court: TRIBUNAL
• Department Lawyers: N B SOM JCIT LD
• Assessee Lawyers: SUBASH AGARWAL LD
• Keywords: Sale consideration of property below Jantri Value; Transfer pricing; Residential status; Salary income; Principle of natural justice; Services rendered outside India
• Section: 142(1); 6

Judgement Text

1 ITA NO. 452/K/16 SUDHANSHU MOHAPATRA IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA BEFORE: SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 452/KOL/2016 ASSESSMENT YEAR: 2011-2012 SUDHANSHU MOHAPATRA VS. DEPUTY COMMISSIONER O F PAN: ACYPM6450C INCOME-TAX, (INTERNATIONAL TAXATION)-2(1), KOLKATA [ APPELLANT] [ RESPONDENT ] FOR THE APPELLANT : SHRI SUBASH AGARWAL, ADVOCATE , LD.AR FOR THE RESPONDENT : SHRI N.B. SOM, JCIT, LD.SR.D R DATE OF HEARING : 29-05-2017 DATE OF PRONOUNCEMENT : 31-05-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 18-01-2016 OF CIT(A),22, KOLKATA FOR THE ASSESSMENT YEAR 2011- 12. 2. THE ONLY ISSUE IN THIS APPEAL IS TO BE DECIDED A S TO WHETHER THE CIT- A JUSTIFIED IN CONFIRMING THE ADDITION OF RS.15,62 ,814/- MADE BY THE AO TREATING THE ASSESSEE AS RESIDENT OF INDIA IN THE F ACTS AND CIRCUMSTANCES OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES HIS INCOME FROM SALARY AND OTHER SOURCES. T HE ASSESSEE CLAIMING HIMSELF AS NON-RESIDENT FILED HIS RETURN DECLARING TOTAL INCOME AT RS. NIL. UNDER SCRUTINY, NOTICES U/S. 143(2) AND 142(1) OF T HE ACT WERE ISSUED. IN RESPONSE TO WHICH, ACCORDING TO AO, NONE APPEARED I N THE ASSESSMENT PROCEEDING. THEREBY THE AO DETERMINED THE INCOME OF THE ASSESSEE AT RS. 15,07,862/- VIDE HIS ORDER DT. 27-03-2014 PASSED U/ S. 144/143(3) OF THE ACT. WHILE DOING SO, THE AO OBSERVED THAT THE ASSES SEE HAS CLAIMED 2 ITA NO. 452/K/16 SUDHANSHU MOHAPATRA EXEMPTION OF SALARY RECEIVED FROM INTERNATIONAL MIN ING SERVICES LIMITED NORWAY IN FOREIGN CURRENCY. THE ASSESSEE CLAIMED AS DISCUSSED ABOVE AS NON RESIDENT STATUS. THE AO WHILE EXAMINING THE MAT ERIAL ON RECORD FOUND THAT THERE WAS NO SUCH EVIDENCE TO SHOW THAT THE AS SESSEE IS A NON RESIDENT. ACCORDINGLY, EXEMPTION AS SOUGHT BY THE A SSESSEE WAS DENIED BY THE AO AND ADDED THE SAME TO HIS TOTAL INCOME. 4. THE CIT-A BY RELYING ON THE DECISION OF HONBLE THIRD MEMBER IN THE CASE OF CAPT. A.L FERNANDES VS. ITO REPORTED IN (20 02) 81 ITD 203 (MUM.) HELD THAT THE SALARY RECEIVED IN INDIA FOR R ENDERING OF SERVICES BY THE APPELLANT OUTSIDE INDIA IS CHARGEABLE TO TAX IN INDIA AS HIS INCOME. ACCORDINGLY, HE CONFIRMED THE ACTION OF THE AO IN D OING SO. 5. THE LD.AR SUBMITS THAT THE ASSESSEES CASE IS SQ UARELY COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF UTANKA ROY VS. DIT, INTERNATIONAL TAXATION TRANSFER PRICING, KOLKATA & ORS. PASSED IN W.P NO.369 OF 2014 ON 15-12-2016 AND PLACED ON RECORD THE SAME. HE FURTHER REFERRED TO PAGES 6-10 OF SUCH ORDER AND ARGUED THAT THE ASSESSEE IS A NON RESIDENT AND FACTS OF THE PRE SENT CASE IN HAND ARE SIMILAR TO THE FACTS OF THE CASE IN THE CASE OF SUPRA OF HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA. IN SUPPORT O F HIS CONTENTION, HE ALSO PLACED HIS RELIANCE ON THE CBDT CIRCULAR NO.13/2017 DT. 11.04.2017 AND PLACED ON RECORD THE SAME AND ARGUED THAT THE CBDT HAS CLARIFIED THAT THE SALARY ACCRUED TO A NON-RESIDENT SEAFARER FOR SERVICES RENDERED OUTSIDE INDIA ON A FOREIGN SHIP SHALL NOT BE INCLUDED IN TH E TOTAL INCOME. 6. ON THE OTHER HAND, THE LD.DR SUBMITS THAT THE AS SESSEE DID NOT PRODUCE ANYTHING IN THE ASSESSMENT PROCEEDINGS SHOW ING THAT HE IS NON RESIDENT. THE CIT-A DID NOT DISCUSS ANYTHING IN DET AIL TO FIND OUT WHETHER THE ASSESSEE IS A NON RESIDENT OR NOT. THE LD.DR FU RTHER ARGUED THAT THE DECISION AS RELIED ON BY THE LD.AR OF THE ASSESSEE OF THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF SUPRA IS NOT APPLICABLE TO THE PRESENT FACTS OF THE CASE FOR THE REASON THA T THE HONBLE HIGH COURT OF CALCUTTA OBSERVED THAT THE ASSESSEE THEREIN REND ERED SERVICES OUTSIDE 3 ITA NO. 452/K/16 SUDHANSHU MOHAPATRA INDIA FOR A PERIOD OF 286 DAYS AND AS SUCH SAME IS TO BE CONSIDERED AS INCOME RECEIVED OUTSIDE INDIA. THE LD.DR SUBMITS TH AT THE CBDT CIRCULAR AS RELIED ON BY THE LD.AR OF THE ASSESSEE IS ALSO N OT APPLICABLE TO THE FACTS OF THE PRESENT CASE FOR THE REASON THAT IT HAS BEEN CLARIFIED THAT THE SALARY ACCRUED TO A NON-RESIDENT IS NOT INCLUDABLE TO THE TOTAL INCOME AND ARGUED THAT THE ASSESSEE COULD NOT PRODUCE ANYTHING TO SHOW THAT HE IS A NON RESIDENT. 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE EARNED FOREIGN CUR RENCY FROM HIS SAID FOREIGN EMPLOYER OUTSIDE INDIA AND CLAIMED EXEMPTIO N AS NON RESIDENT IN HIS RETURN OF INCOME. WE FIND THAT THERE WAS NO EVI DENCE PLACED ON RECORD TO SHOW THAT HE IS A NON RESIDENT INDIAN. IN ABSENC E OF WHICH, THE AO TREATED THE ASSESSEE AS RESIDENT OF INDIA. THE CIT- A RELYING ON THE DECISION OF THIRD MEMBER IN THE CASE OF SUPRA HELD THAT ANY INCOME RECEIVED BY NON RESIDENT OF INDIA IS TAXABLE IN IN DIA FOR THE REASON THAT THE SALARY WAS RECEIVED IN INDIA. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF SUPRA HELD THAT THE ASSESSEE RENDERED HIS SERVICES OUTSIDE INDIA TREATING THE AS SESSEE THEREIN AS NON RESIDENT. WE FIND THAT THE ASSESSEE THEREIN RENDERE D HIS SERVICES OUTSIDE INDIA FOR A PERIOD OF 286 DAYS. IN OUR OPINION TO T REAT A PERSON AS NON RESIDENT THERE IS A PROCEDURE CONTEMPLATED IN SECT ION 6 OF THE ACT, WHERE ANY PERSON CLAIMS TO BE TREATED AS NON RESIDENT ONE MUST SHOW THAT STAY OUTSIDE INDIA FOR MORE THAN 182 DAYS. IN THE PRESEN T CASE, WE FIND THAT THE ASSESSEE COULD NOT PRODUCE ANYTHING BEFORE ANY OF THE AUTHORITIES BY SHOWING ANY EVIDENCE THAT HE IS NON RESIDENT HAVING RENDERED HIS SERVICES OUTSIDE INDIA FOR MORE THAN 182 DAYS. ACCORDINGLY, THE FACTS OF THE HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE O F SUPRA TOGETHER WITH THE SAID CBDT CIRCULAR AS RELIED ON BY THE LD.AR OF THE ASSESSEE BEFORE US ARE NOT APPLICABLE TO THE PRESENT FACTS OF THE CASE. TH US, WE FIND FORCE IN THE SUBMISSIONS OF THE LD.DR. IN SUCH CIRCUMSTANCES AND IN THE INTEREST OF NATURAL JUSTICE, WE RESTORE THE ISSUE TO THE FILE O F THE AO FOR A LIMITED PURPOSE TO FIND OUT WHETHER THE ASSESSEE IS A RESID ENT OR NON RESIDENT IN 4 ITA NO. 452/K/16 SUDHANSHU MOHAPATRA TERMS OF RELEVANT PROVISIONS OF THE ACT. THE AO IS DIRECTED TO PASS A FRESH ORDER AS PER LAW AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS AT LIBERTY TO FILE REQUISITE EVIDENCES, IF ANY, TO SUBSTANTIATE HIS CLAIM PROPERLY. GROUND RAI SED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 31-05-2017 SD/- SD/- WASEEM AHMED S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31-05-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI SUDHANSHU MOHAPATRA 2K/BLOCK, SAPP HIRE COURT, 74 GOLF CLUB ROAD, TOLLYGUNGE, KOLKATA-33. 2 RESPONDENT THE DCIT (INTERNATIONAL TAXATION)-2(1) , 110 SHANTI PALLY, E.M BYE PASS, AAYKAR BHAWAN, POORVA, KOLKATA-107. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT KOLKATA