ACIT, New Delhi V. Sh. Jyotinder Singh Randhawa, New Delhi

ITA 4895/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77601 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Residential status
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D : NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOU NTANT MEMBER ITA NO. 4895/DEL/2012 ASSESSMENT YEAR: 2009-10 ACIT, VS. JYOTINDER SINGH RANDHAWA, CIRCLE 33 (1), 6A/1, 2 ND FLOOR NEW DELHI. W EA, KAROLBAGH NEW DELHI (PAN AAOPR3226P) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. MISHRA, DR RESPONDENT BY: DR. RAKESH GUPTA, AD VOCATE, SH. SOMIL AGARWAL, CA ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLA TE ORDER SOLELY ON THE GROUND THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDI TION OF RS. 4,77,12,271/- MADE BY THE AO. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS A DVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW AND THE DEC ISIONS RELIED UPON. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE, A WORLD KNOWN PROFESSIONAL GOLFER PURSUES THE VOCATION OF SPORTSMAN. DURING THE YEAR AND IN THE EARLIER YEARS HE PARTICIPATED IN THE GOLF TOURNAMENT IN VARIOUS COUN TRIES AND REMAINED OUTSIDE INDIA FOR CONSIDERABLE PERIOD IN THESE YEARS. IN HI S RETURN OF INCOME FOR THE YEAR ITA NO. 4895/DEL/2012 2 FILED IN THE STATUS OF RESIDENT, THE ASSESSEE DEC LARED TOTAL INCOME OF RS. 21,35,596/- COMPRISING OF PROFESSIONAL INCOME, INCO ME FROM CAPITAL GAINS AND INCOME FROM OTHER SOURCE S. DURING THE COURSE OF AS SESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE DID NOT DECLARE HIS INCO ME IN HIS INCOME TAX RETURN AND OBSERVED THAT SINCE THE ASSESSEE WAS RESIDENT , THE INCOME CANNOT BE CLAIMED TO BE EXEMPT. HE ASKED THE ASSESSEE TO FILE THE PROOF OF BEING NON- RESIDENT DURING THE FINANCIAL YEAR 2008-09. THE AS SESSEE REFERRING SECTION 6 OF THE INCOME TAX ACT, 1961 SUBMITTED TO SHOW AS TO WH EN AN INDIVIDUAL IS SAID TO BE RESIDENT IN INDIA. IT WAS SUBMITTED THAT HE WA S IN INDIA DURING THE PREVIOUS YEAR 2008-09 FOR A PERIOD OF 167 DAYS AND WAS OUTSI DE INDIA FOR A PERIOD OF 198 DAYS THE AO DID NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE ON THE BASIS THAT THE ASSESSEE COULD NOT PROOF THAT HE WAS NOT I N INDIA FOR 365 DAYS DURING THE FOUR YEAR PERIOD IMMEDIATELY PRECEDING THE PREV IOUS YEAR. HE ACCORDINGLY HELD THE ASSESSEE AS A RESIDENT AND ADDED THE AMO UNT OF RS. 4,77,12,271/- CLAIMED AS EXEMPT TO THE TOTAL INCOME OF THE ASSSES SEE. THE LD. CIT(A) AFTER DISCUSSING THE ISSUE IN DETAIL AND CITING THE PROVI SION OF LAW AS WELL AS THE DECISIONS RELIED UPON, HAS DELETED THE ADDITION TRE ATING THE ASSESSEE IN THE STATUS OF NON-RESIDENT. THIS ACTION OF THE LD. CIT(A) HA S BEEN IMPUGNED BEFORE THE TRIBUNAL. 4. IN SUPPORT OF THE GROUND THE LD. DR HAS B ASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE SUBMITTED THAT THE LD. CIT(A) HAS IGNORED THE OBSERVATION ITA NO. 4895/DEL/2012 3 OF THE AO THAT ASSESSEE HAD STAYED IN INDIA FOR 167 DAYS. HE SUBMITTED FURTHER THAT THE LD. CIT(A) HAS GIVEN RELIEF WITHOUT VERIFY ING THE ALTERNATIVE SUBMISSION OF THE ASSESSEE THAT AS PER ARTICLE 17/18 OF DOUBLE TAXATION AVOIDANCE AGREEMENT ENTERED INTO BY INDIA WITH THOSE COUNTRIE S WHERE THE ASSESSEE RECEIVED THE AMOUNT FOR HIS PARTICIPATING IN GOLF CONDUCTED BY THE FOREIGN SPORTS BODIES COULD NOT BE BROUGHT TO TAX IN INDIA. THE LD . CIT(A) HAS ALSO ERRED IN FOLLOWING THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. ABDUL RAZAK 337 ITR 267 (KERALA) TREATING THE PRESENT ASS ESSEE A SPORTSMAN GOING ABROAD FOR THE PURPOSE OF EMPLOYMENT. 5. THE LD. AR ON THE OTHER HAND TRIED TO JU STIFY THE FIRST APPELLATE ORDER ON THE ISSUE. HE REITERATED SUBMISSIONS MADE BEFORE TH E AUTHORITIES BELOW AND THE DECISIONS CITED BEFORE THE LD. CIT(A). 6. HAVING GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW WE FIND THAT THE LD. CIT(A) HAS TREATED THE ASSESSEE BEING A PROFESS IONAL GOLFER AS A SELF- EMPLOYED PROFESSIONAL WHO CARRIES HIS TALENT AS A SPORTSPERSON BY PARTICIPATING IN GOLF-TOURNAMENTS CONDUCTED IN VARIOUS COUNTRIES ABROAD. HE THEREFORE HELD THAT THE ASSESSEE WILL BE ENTITLED TO THE BENEFIT P ROPOUNDED IN EXPLANATION (A) TO SECTION 6(1)(C) OF THE ACT AS HIS STATUS IS NON-RE SIDENT DURING THE YEAR UNDER CONSIDERATION WHERE HIS PERIOD OF STAY IN INDIA IS LESS THAN 182 DAYS (ACTUALLY 167 DAYS). HE ACCORDINGLY HELD THAT THE INCOME OF RS. 4 ,77,12,272/- ACCRUED AND RECEIVED BY THE ASSESSEE OUTSIDE INDIA IS NOT TAXAB LE IN INDIA. HE HAS ALSO HELD ITA NO. 4895/DEL/2012 4 THAT THE MAJOR RECEIPTS OF THE ASSESEE ARE FROM SOU TH KOREA, UK, USA, FRANCE, GERMANY, PORTUGAL, SINGAPORE, HONGKONG, THAILAND, U AE, MALAYSIA, JAPAN, INDONESIA AND CHINA WHERE THE ASSESSEE PARTICIPATED IN GOLF TOURNAMENT CONDUCTED BY THE FOREIGN SPORTS BODIES WITH WHOM IN DIA HAS SIGNED DOUBLE TAXATION AVOIDANCE AGREEMENT HENCE AS PER ARTICLE 1 7/18 OF DOUBLE TAXATION AVOIDANCE AGREEMENT, THE AMOUNT RECEIVED BY SPORTS PERSON / ATHLETE FROM THE FOREIGN SPORTS BODIES COULD NOT BE BROUGHT TO TAX I N INDIA. BEFORE US THE LD. CIT DR HAS CONTENDED THAT THIS ALTERNATIVE PLEA OF THE ASSESSEE HAS BEEN ACCEPTED BY THE LD. CIT(A) WITHOUT VERIFYING THE FACTS. HE H AS HOWEVER NOT CONTENDED IN SPECIFIC TERM THAT ABOVE NOTED FACTS BY THE LD. CIT (A) IS NOT CORRECT. THE ISSUE INVOLVED IN THE PRESENT CASE REMAINED AS TO WHETHER THE ASSESSEE CAN BE SAID TO HAVE LEFT INDIA FOR THE PURPOSE OF EMPLOYMENT AND S HOULD HE BE ENTITLED TO THE BENEFIT OF EXPLANATION (A) TO SECTION 6(1)(C) OF T HE ACT . EXPLANATION- (A) TO SECTION 6(1) OF THE ACT STATES THAT AN INDIAN CITIZ EN WHO LEFT INDIA IN PREVIOUS YEAR FOR THE PURPOSE OF HIS EMPLOYMENT OUTSIDE INDI A, THE PERIOD OF 60 DAYS SHALL BE SUBSTITUTED BY 182 DAYS TO BE TREATED AS RESIDE NT IN INDIA. THE TERM EMPLOYMENT IS NOT DEFINED IN THE ACT. IN THIS REG ARD THE LD. CIT(A) HAS TAKEN STRENGTH FROM SEVERAL DECISIONS INCLUDING THE DECIS ION OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. ABDUL RAZAK (SUPRA) HO LDING AS UNDER :- GOING ABROAD FOR THE PURPOSE OF EMPLOYMENT ONLY ME ANS THAT THE VISIT AND STAY ABROAD SHOULD NOT BE FOR OTHER PURPO SES SUCH AS TOURIST, OR MEDICAL TREATMENT OR STUDIES OR THE LIK E. GOING ABROAD FOR THE PURPOSE OF EMPLOYMENT MEANS GOING ABROAD TO TAKE UP ITA NO. 4895/DEL/2012 5 EMPLOYMENT OR ANY ALLOCATION WHICH TAKES IN SELF-EM PLOYMENT LIKE BUSINESS OR PROFESSION-ASSESSEE WAS THEREFORE NON-R ESIDENT DURING THE RELEVANT PERIOD AS HE WAS IN INDIA FOR 177 DAYS ONLY. 7. WE THUS FIND THAT GOING ABROAD FOR THE PU RPOSE OF EMPLOYMENT ALSO MEANS GOING ABROAD TO TAKE UP EMPLOYMENT OR ANY ALL OCATION WHICH TAKES IN SELF EMPLOYMENT LIKE BUSINESS OR PROFESSION. THE FACTS O F THE PRESENT CASE SUGGEST THAT THE ASSESSEE WAS IN SELF EMPLOYMENT BEING A PR OFESSIONAL GOLFER. WE THUS DO NOT FIND REASON TO DEVIATE FROM THE FINDING OF THE LD. CIT(A) WHICH IS BASED ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. ABDUL RAZAK (SUPRA) AND OTHERS THAT THE ASSESSEE BEING A PROFESSIONAL GOLFER IS A SELF EMPLOYED PROFESSIONAL WHO CARRIES HIS TALENT AS A S PORTSPERSON BY PARTICIPATING IN GOLF TOURNAMENTS CONDUCTED IN VARIOUS COUNTRIES ABR OAD. FOR SUCH INDIAN CITIZEN IN EMPLOYMENT OUTSIDE INDIA THE REQUIREMENT FOR BEI NG TREATED AS RESIDENT OF INDIA IS HIS STAY OF 182 DAYS IN INDIA IN THE PREVI OUS YEAR, AS PER EXPLANATION (A) TO SECTION 6(1)(C) OF THE I.T. ACT 1961. FOR A READ Y REFERENCE, WE REPRODUCE BELOW THE RELEVANT EXTRACT OF THE PROVISIONS LAID D OWN UNDER SECTION 6 RESIDENCE IN INDIA OF THE I.T. ACT 1961 :- 6. FOR THE PURPOSES OF THIS AC T:- (1) AN INDIVIDUAL IS SAID TO BE RESIDENT IN INDIA IN ANY PREVIOUS YEAR. IF HE (A) IS IN INDIA IN THAT YEAR FOR A PERIOD OR P ERIODS AMOUNTING IN ALL TO ONE HUNDRED AND EIGHTY-TWO DA YS OR MORE ; OR (B) [] (C) HAVING WITHIN THE FOUR YEARS PRECEDING THAT YEAR BEEN IN INDIA FOR A PERIOD OR PERIODS AMOUNTING I N ALL TO THREE HUNDRED AND SIXTY FIVE DAYS OR MORE IS IN I NDIA FOR A ITA NO. 4895/DEL/2012 6 PERIOD OR PERIODS AMOUNTING IN ALL TO SIXTY DAYS OR MORE IN THAT YEAR. [EXPLANATION IN THE CASE OF AN INDIVIDUAL.- (A) BEING A CITIZEN OF INDIA, WHO LEAVES INDIA IN ANY PREVIOUS YEAR [AS A MEMBER OF THE CREW OF AN INDIAN SHIP AS DEFINED IN CLAUSE (18) OF SECTION 3 OF THE MERCH ANT SHIPPING ACT, 1958 (44 OF 1958) OR FOR THE PURPOSE S OF EMPLOYMENT OUTSIDE INDIA, THE PROVISIONS OF SUB-CLA USE (C) SHALL APPLY IN RELATION TO THAT YEAR AS IF FOR THE WORDS SIXTY DAYS, OCCURRING THEREIN, THE WORDS ONE HUNDRED AN D EIGHTY-TWO-DAYS HAD BEEN SUBSTITUTED. 8. SINCE THE PRESENT ASSESSEE HAD STAYED IN I NDIA LESS THAN 182 DAYS HE WAS NOT RESIDENT OF INDIA FOR THE ASSESSMENT PURPOSE ON THE CLAIMED RECEIPTS FORM HIS OUTSIDE EMPLOYMENT. WE THUS FIND THAT THE FIRST APPELLATE ORDER ON THE ISSUE IS COMPREHENSIVE AND REASONED ONE AND HENCE DOES NO T WARRANT ANY INTERFERENCE THEREWITH. THE SAME IS UPHELD. THE GRO UND OF THE APPEAL IS ACCORDINGLY REJECTED. CONSEQUENTLY APPEAL IS DISMIS SED. 9. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH APRIL, 2014. SD/- SD/- (SHAMIM YAHYA) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 15 TH APRIL, 2014 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT ITA NO. 4895/DEL/2012 7 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR, ITAT