The Income Tax Officer, Ward - IV(1), Jalandhar V. Sh. Rajesh Joshi, Jalandhar

ITA 510/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5762 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 04-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJEEV GUBGOTRA
• Keywords: Residential status
• Section: 143(3); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.510(ASR)/2017 ASSES SMENT YEAR:2011-12 INCOME TAX OFFICER, WARD-IV(1), JALANDHAR PAN:AGIPJ-8312L VS. SH. RAJESH JOSHI PROP. YASH ENTERPRISES, OPP. UCO BANK, JANDU SINGHA JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJEEV GUBGOTRA (DR ) RESPONDENT BY: SH. ASHRAY SARNA (CA) DATE OF HEARING: 20.12.2017 DATE OF PRONOUNCEMENT: 29.01.201 8 ORDER PER: SANJAY ARORA, AM THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR [ CIT(A) FOR SHORT] DATED 13.06.2017, ALLOWING THE ASSESSEES APPEAL CONTESTI NG HIS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) F OR ASSESSMENT YEAR (AY) 2011- 12 VIDE ORDER DATED 19/3/2014. 2. THE SHORT QUESTION ARISING IN THE INSTANT APPE AL IS WHETHER THE ASSESSEE INDIVIDUAL IS FOR THE RELEVANT YEAR A RESIDENT OR A NON-RESIDENT IN INDIA. THIS IS AS THE ASSESSEE, A CITIZEN OF INDIA, APART FROM THE RE TURNED INCOME, EARNED SALARY OF RS.65,11,553/- FROM A NON-RESIDENT COMPANY, M/S TRA NSOCEAN SEDCO FOREX INTERNATIONAL INC., WORKING ON ITS OFFSHORE DRILL ING UNIT. IT IS THE TAXABILITY OF THIS SUM UNDER THE ACT WHICH IS A SUBJECT MATTER OF DISP UTE BETWEEN THE ASSESSEE AND THE REVENUE. ITA NO.510 (ASR)/2017(A.Y.2011-12) ITO VS. RAJESH JOSHI 2 3. THE FACTUAL BASIS FOR THE REVENUE TO CONTEND THA T THE ASSESSEE IS A RESIDENT IN INDIA FOR THE RELEVANT YEAR IS THE FACT THAT HE STA YED IN INDIA FOR A PERIOD OF SIX HUNDRED AND SIXTEEN (616) DAYS DURING THE FOUR YEAR S IMMEDIATELY PROCEEDING THE RELEVANT PREVIOUS YEAR, I.E., F.Y.2010-11, AND FOR ONE HUNDRED SIXTY (160) DAYS DURING THE RELEVANT PREVIOUS YEAR. THE LAW (PER SEC . 2(42)) MANDATES THE RESIDENTIAL STATUS TO BE DETERMINED WITH REFERENCE TO SECTION 6 OF THE ACT. THE ASSESSEE SEEKING REFUSE OF EXPLANATION-1(A) TO SECTION 6 (1), WHICH PROVIDES FOR AN EXCEPTION FOR THE YEAR IN WHICH AN ASSESSEE LEAVES INDIA ON EMPLOYMEN T OUTSIDE INDIA, WOULD, ON BEING QUESTIONED IN THE MATTER, FURNISH A COPY OF A N UNSIGNED LETTER DATED MARCH 10, 2014 BY ONE M/S. TRANSOCEAN SEDCO FOREX INTERNA TIONAL INC., GUINEA EQUATORIAL, WHICH STATES THE ASSESSEE (WITHOUT MENT IONING HIS PASSPORT NUMBER OR EVEN HIS FATHERS NAME) TO HAVE BEEN ASSIGNED OPERATIONS IN GUINEA EQUATORIAL FROM JANUARY, 2010 TO AUGUST, 2011, EARNING US $ DE NOMINATED MONTHLY SALARY. APART FROM THE FACT THAT THIS LETTER CONSTITUTES AD DITIONAL EVIDENCE, AND IS EVEN OTHERWISE UNSIGNED, IT IS CLEAR THERE-FROM THAT THE ASSESSEE LEFT INDIA FOR EMPLOYMENT OUTSIDE INDIA IN JANUARY, 2010, IF NOT E ARLIER, I.E., DURING THE PREVIOUS YEAR RELEVANT TO AY 2010-11. THE BENEFIT OF EXPLANATION 1(A) TO SEC.6(1), PROVIDING FOR AN EXTENDED TIME PERIOD OF 182 DAYS I N INDIA FOR THAT YEAR, I.E., DURING WHICH AN ASSESSEE LEAVES INDIA FOR EMPLOYMENT ABROA D, AND YET NOT BE REGARDED AS A RESIDENT, WOULD THEREFORE NOT BE APPLICABLE FOR T HE RELEVANT PREVIOUS YEAR. IN FACT, AS A PERUSAL OF THE ASSESSEES PASSPORT, ADDUCED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, IN SUP PORT OF AN ALTERNATIVE PLEA, SHOWS, THE ASSESSEE COULD HAVE LEFT INDIA EVEN PRIO R TO JANUARY, 2010, AND WHICH COULD BE FOR EMPLOYMENT WITH THE SAME OR ANY OTHER EMPLOYER. THE BENEFIT OF EXPLANATION 1(A) TO S. 6(1) WOULD THUS NOT BE AVAILABLE FOR THE RELE VANT PREVIOUS YEAR, I.E., F.Y.2010-11. ITA NO.510 (ASR)/2017(A.Y.2011-12) ITO VS. RAJESH JOSHI 3 SO, HOWEVER, THE ASSESSEE, AS IT TRANSPIRES DURING THE HEARING, VISITED INDIA DURING THE RELEVANT PREVIOUS YEAR, I.E., F.Y.2010-1 1, SO THAT EXPLANATION 1(B) TO SEC. 6(1) MAY STAND ATTRACTED, WHICH SIMILARLY EXTENDS T HE THRESHOLD LIMIT - FOR STAY IN INDIA TO INDIAN CITIZENS VISITING INDIA, WITHOUT BE ING REGARDED AS A RESIDENT OF INDIA, TO 182 DAYS. WE SAY SO AS FROM THE ASSESSEES PASSP ORT, COPY OF WHICH WAS FURNISHED DURING HEARING, IT APPEARS THAT THE ASSES SEE ARRIVED IN INDIA ON APRIL 25, 2010 AND DEPARTED THERE-FROM ON MAY 27, 2010. THE A SSESSEE WAS, AS IT APPEARS, IN EMPLOYMENT ABROAD DURING THE RELEVANT PERIOD, FALLI NG WITHIN THE RELEVANT PREVIOUS YEAR. THE 182 DAY TIME LIMIT SHOULD, THEREFORE, APP LY TO THE ASSESSEE, MAKING HIM A NON RESIDENT IN TERMS OF EXPLANATION 1(B) TO SECTION 6(1), WHICH READS AS UNDER: 'RESIDENCE IN INDIA. 6. FOR THE PURPOSES OF THIS ACT, - (1) AN INDIVIDUAL IS SAID TO BE RESIDENT IN INDIA I N ANY PREVIOUS YEAR, IF HE- (A) IS IN INDIA IN THAT YEAR FOR A PERIOD OR PERIOD S AMOUNTING IN ALL TO ONE HUNDRED AND EIGHT-TWO DAYS OR MORE; OR (B) [***] (C) HAVING WITHIN THE FOUR YEARS PRECEDING THAT YEA R BEEN IN INDIA FOR A PERIOD OR PERIODS AMOUNTING IN ALL TO THREE HUNDRED AND SIXTY -FIVE DAYS OR MORE, IS IN INDIA FOR A PERIOD OR PERIODS AMOUNTING IN ALL TO SIXTY DAYS OR MORE IN THAT YEAR. EXPLANATION.1 IN THE CASE OF AN INDIVIDUAL,- (A) BEING A CITIZEN OF INDIA, WHO LEAVES INDIA IN A NY PREVIOUS YEAR AS A MEMBER OF THE CREW OF AN INDIAN SHIP AS DEFINED IN CLAUSE (18 ) OF SECTION 3 OF THE MERCHANT SHIPPING ACT, 1968 (44 OF 1958), OR FOR THE PURPOSE OF EMPLOYMENT OUTSIDE INDIA, THE PROVISION OF SUB-CLAUSE ( C) SHALL APPLY IN REL ATION TO THAT YEAR AS IF THE WORDS 'SIXTY DAYS', OCCURRING THEREIN, THE WORDS 'ONE HUN DRED AND EIGHTY TWO DAYS' HAD BEEN SUBSTITUTED; (B) BEING A CITIZEN OF INDIA, OR A PERSON OF INDIAN ORIGIN WITHIN THE MEANING OF EXPLANATION TO CLAUSE (E) OF SECTION115C, WHO, BEIN G OUTSIDE INDIA, COMES ON A VISIT TO INDIA IN ANY PREVIOUS YEAR, THE PROVISIONS OF SU B-CLAUSE (C) SHALL APPLY IN RELATION TO THAT YEAR AS IF FOR THE WORDS SIXTY DAYS, OCCU RRING THEREIN, THE WORDS ONE HUNDRED AND [EIGHT-TWO] DAYS HAD BEEN SUBSTITUTED. ' THE BRINGING OF SALARY, EARNED ABROAD, TO INDIA WOU LD NOT MAKE IT TAXABLE IN INDIA U/S 5(2)(A), AS CLARIFIED BY THE TRIBUNAL IN ARVIND SINGH CHAUHAN (IN ITA NOS. 319 ITA NO.510 (ASR)/2017(A.Y.2011-12) ITO VS. RAJESH JOSHI 4 & 320/AGR./2013, DATED 14/02/2014), AS WELL AS IN F ACT BY THE BOARD ITSELF PER ITS CIRCULAR (NO. 13 OF 2017, DATED 11/4/2017). THE LETTER AFORE-REFERRED BEING UNSIGNED, WE, UNDE R THE CIRCUMSTANCES, ONLY CONSIDER IT PROPER TO REMIT THE MATTER BACK TO THE FILE OF THE AO. THE ASSESSEES PASSPORT, COUPLED WITH AN AUTHENTICATED PROOF OF HI S EMPLOYMENT OUTSIDE INDIA SINCE PRIOR TO APRIL 1, 2010, WOULD MAKE THE ASSESS EE A NON-RESIDENT IN INDIA FOR THE RELEVANT YEAR, SO THAT NO PART OF HIS SALARY EA RNED OUTSIDE OF INDIA WOULD BE TAXABLE IN INDIA. WE MAKE THIS ABUNDANTLY CLEAR. NE EDLESS TO ADD, THE REVENUES RELIANCE ON SECTION 6(5), WHICH PROVIDES THAT ALL T HE INCOME OF A RESIDENT WOULD BE TAXABLE IN INDIA, IS OF LITTLE CONSEQUENCE IN-AS-MU CH AS THE LAW PER SEC.5(1) IS CLEAR AND, FURTHER, THE ASSESSEES CASE, WHICH WE APPROVE IN PRINCIPLE, IS THAT HE WAS NOT A RESIDENT IN INDIA FOR THE RELEVANT YEAR. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 29.01 .2018 SD/- SD/- (N.K.CHOUDHARY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:29 /01/2018 /PK/ PS COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE RESPONDENT (3) THE CIT(A)-2, JALANDHAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER