ACIT CEN CIR 40, MUMBAI V. BINOD KUMAR SINGH, MUMBAI

ITA 5532/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2763 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 03-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Residential status; Opportunity of being heard; Principle of natural justice; Rule of consistency; Additional evidence; Advance ruling; Question of law; Cost of acquisition; Corroborative evidences; Onus to prove
• Section: 143(3); 153A; 133(6); 68; 132; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.4596 TO 4598/MUM/2012 ASSESSMENT YEARS- 2007-08 TO 2009-10 DCIT, CC-40, ROOM NO.653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. MR. BINOD KUMAR SINGH, 9 TH FLOOR, OPP. ASIAN PAINTS, LBS MARG, BHANDUP, MUMBAI-400078 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AMXPS1998L CROSS OBJECTIONS NOS.148 TO 150/MUM/2013 (ARISING OUT OF ITA NOS.4596 TO 4598/MUM/2012) ASSESSMENT YEARS- 2007-08 TO 2009-10 MR. BINOD KUMAR SINGH, 9 TH FLOOR, OPP. ASIAN PAINTS, LBS MARG, BHANDUP, MUMBAI-400078 / VS. DCIT, CC-40, ROOM NO.653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( !'# $ /ASSESSEE) ( / REVENUE) PAN. NO.AMXPS1998L ITA NOS.5530 TO 5532/MUM/2012 ASSESSMENT YEARS- 2003-04 TO 2005-06 DCIT, CC-40, ROOM NO.653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. MR. BINOD KUMAR SINGH, 9 TH FLOOR, OPP. ASIAN PAINTS, LBS MARG, BHANDUP, MUMBAI-400078 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO.AMXPS1998L MR. BINOD KUMAR SINGH 2 CROSS OBJECTIONS NOS.212 TO 214/MUM/2013 (ARISING OUT OF ITA NOS.5530 TO 5532/MUM/2012) ASSESSMENT YEARS- 2003-04 TO 2005-06 MR. BINOD KUMAR SINGH, 9 TH FLOOR, OPP. ASIAN PAINTS, LBS MARG, BHANDUP, MUMBAI-400078 / VS. DCIT, CC-40, ROOM NO.653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( !'# $ /ASSESSEE) ( / REVENUE) PAN. NO.AMXPS1998L ITA NO.6143/MUM/2012 ASSESSMENT YEAR- 2006-07 DCIT, CC-40, ROOM NO.653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. MR. BINOD KUMAR SINGH, 9 TH FLOOR, OPP. ASIAN PAINTS, LBS MARG, BHANDUP, MUMBAI-400078 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO.AMXPS1998L CROSS OBJECTIONS NO.267/MUM/2013 (ARISING OUT OF ITA NO. 6143/MUM/2012) ASSESSMENT YEARS- 2006-07 MR. BINOD KUMAR SINGH, 9 TH FLOOR, OPP. ASIAN PAINTS, LBS MARG, BHANDUP, MUMBAI-400078 / VS. DCIT, CC-40, ROOM NO.653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( !'# $ /ASSESSEE) ( / REVENUE) PAN. NO.AMXPS1998L / REVENUE BY SHRI N.P.SINGH CIT-DR !'# $ / ASSESSEE BY SHRI JITENDRA SANGHVI & SHRI AMIT KHATIWALA % & $ ' / DATE OF HEARING : 29/10/2015 & $ ' / DATE OF ORDER: 18/12/2015 MR. BINOD KUMAR SINGH 3 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS BUNCH OF FOURTEEN APPEALS ARE BY THE REVENUE INCLUDING CROSS OBJECTIONS BY THE ASSESSEE AGAINST SEPARATE ORDERS OF DIFFERENT DATES BY THE LD. FIRST APPELLA TE AUTHORITY, MUMBAI. FIRST WE SHALL TAKE UP APPEAL FOR A.Y. 2008 -09 (ITA NO.4597/MUM/2012), WHEREIN, FIRST GROUND RAISED BY THE REVENUE PERTAINS TO DELETING THE ADDITION OF RS.57,40,09,054/- BY THE LD. FIRST APPELLATE AUTHOR ITY BY HOLDING THE STATUS OF THE ASSESSEE AS NON-RESIDENT WITHOUT APPRECIATING THAT CLAUSE-(B) OF EXPLANATION TO SECT ION 6(1)(C) IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE AND F URTHER EVEN IF THE ASSESSEE IS TREATED AS NRI, THEN ALSO, THERE IS NEED TO ANALYZE THE TAXABILITY OF INCOME AS AN NRI IN THE L IGHT OF SECTION 5 AND SECTION 9 OF THE INCOME TAX ACT, 1961 , (HEREINAFTER THE ACT). THE ISSUES INVOLVED IN ALL T HE APPEALS WERE ARGUED TO BE IDENTICAL. 2. DURING HEARING, OF THIS APPEAL, THE LD. CIT-DR, SHRI N.P. SINGH, ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUND RAISED BY CONTENDING THAT SEARCH ACTION U/S 132 OF THE ACT WAS CARRIED OUT ON 15/05/2008. THE LD. CIT- DR ALSO CONTENDED THAT THE ISSUE INVOLVED IN ALL THE ASSESS MENT YEARS IS IDENTICAL. IT WAS POINTED OUT THAT ASSESSEE IS A RESIDENT AND ORIGINAL PASSPORT WAS NEVER PRODUCED BY THE ASS ESSEE BEFORE THE ASSESSING OFFICER. IT WAS FAIRLY AGREED BY THE LD. CIT-DR THAT ASSESSEE WAS FREQUENTLY GOING ABROAD AN D ORIGINAL PASSPORT WAS CLAIMED TO BE LOST. IT WAS PL EADED THAT MR. BINOD KUMAR SINGH 4 THERE IS CONTRAVENTION OF RULE 46-A OF THE RULES BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BUT WHEN QUEST IONED BY THE BENCH AND ALSO OBJECTED BY THE ASSESSEE, IT WAS AGAIN AGREED THAT REMAND REPORT WAS SOUGHT FROM THE ASSES SING OFFICER BY THE LD. COMMISSIONER OF INCOME TAX (APPE ALS). OUR ATTENTION WAS INVITED TO SECTION 6 OF THE ACT BY PL ACING RELIANCE UPON THE DECISION IN 300 ITR 231 (SC). HO WEVER, NECESSARY ENQUIRIES WERE MADE BY THE ASSESSING OFFI CER. RELIANCE WAS FURTHER PLACED UPON THE DECISION IN 25 9 ITR 486 (SC). THE CRUX OF ARGUMENT ADVANCED BY LD. CIT-DR I S THAT THE PASSPORT WAS NOT PRODUCED. AT THIS STAGE, SHRI JITENDRA SANGHAVI ALONG WITH SHRI AMIT KHATIWALA, THE LD. CO UNSEL FOR THE ASSESSEE, INTERVENED AND EXPLAINED THAT PASSPOR T WAS DULY PRODUCED BY THE ASSESSEE BY INVITING OUR ATTEN TION TO PAGE-18 OF THE PAPER BOOK. IT WAS FAIRLY AGREED BY THE LD. CIT-DR THAT IN A.Y. 2005-06, THE ASSESSEE WAS ASSES SED AS NON-RESIDENT BY THE ASSESSING OFFICER. IT WAS FURT HER CLAIMED BY THE LD. CIT-DR THAT THE EVIDENCE PRODUCED BY THE ASSESSEE ARE NOT RELEVANT TO THE FACTS OF THE CASE AND EVEN THE BANKS, WHILE OPENING THE NRE ACCOUNT MAY OR MAY NOT SEE TH E PASSPORT AND OTHER DOCUMENTS. 2.1. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE, SHRI JITENDRA SANGHAVI ALONG WITH SHRI AMIT KHATIWAL A, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER, FIRSTLY, INVITING OUR ATTENTION TO LETTER DATED 09/ 02/2011, MODIFYING THE GROUNDS AND STATEMENT OF FACTS. ASSES SEE ALSO FILED ADDITIONAL EVIDENCE BEFORE THE LD. COMMISSION ER OF MR. BINOD KUMAR SINGH 5 INCOME TAX (APPEALS) ON WHICH REMAND REPORT WAS SOU GHT TWICE FROM THE ASSESSING OFFICER AS SUCH ADDITIONAL EVIDENCE WAS FILED FROM TIME TO TIME BY THE ASSESSEE. IT WAS POINTED OUT THAT THE ADDL. CIT AS WELL AS THE ASSESSING OFF ICER, BOTH WERE PRESENT BEFORE THE LD. FIRST APPELLATE AUTHORI TY FOR WHICH OUR ATTENTION WAS INVITED TO PAGE -1 OF THE IMPUGNE D ORDER EVIDENCING THE PRESENCE OF BOTH THE OFFICERS. IT W AS EXPLAINED THAT FOR GETTING THE STATUS, THE PERIOD OF STAY SHO ULD BE 182 DAYS. IT WAS PLEADED THAT THE ASSESSEE REMAINED OU T OF INDIA FOR 187 DAYS. THE LD. COUNSEL POINTED OUT THAT THE ASSESSEE IS MANAGING DIRECTOR OF A COMPANY, A NON-RESIDENT SO T HE GLOBAL INCOME CANNOT BE ASSESSED IN INDIA AND THE A DDITION WAS DELETED BY THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) BY CONFRONTING THE FACTUAL POSITION TO THE ASSESSIN G OFFICER AND BASED UPON EVIDENCE. IT WAS EXPLAINED THAT THE AMOUNT WAS SENT THROUGH BANKING CHANNEL AND NO ADDITION CA N BE MADE WHEN THE ASSESSEE IS A NON-RESIDENT INDIAN. TH E LD. COUNSEL FURTHER ASSERTED THAT WHEN A BANK ACCOUNT I S OPENED BY THE BANK, EVERY DOCUMENT IS EXAMINED INCLUDING F EMA CONDITIONS, STATUS AND THE ACCOUNTS ARE NOT OPENED IN A CASUAL MANNER. OUR ATTENTION WAS INVITED TO PAGE-18 OF THE IMPUGNED ORDER BY ASSERTING THAT THE ADDITION WAS D ELETED BASED UPON THE EVIDENCE AND NOT IN A SLIP SHORT MAN NER AS HAS BEEN ALLEGED BY THE LD. CIT-DR. IT WAS EXPLAINE D THAT THE DATE OF ARRIVAL AND DEPARTURE ARE TO BE EXCLUDED WH ILE COUNTING THE PERIOD OF STAY FOR WHICH RELIANCE WAS PLACED UPON THE DECISION IN DIT VS MANOJ KUMAR REDDY NARE (2011) 245 CTR 350 (KARN.); (2011) 12 TAXMAN.COM 326 (KARN .) MR. BINOD KUMAR SINGH 6 ORDER DATED 20/06/2011 AND ITO VS FAUSTA C. CORDEIR O (2012) 24 TAXMAN.COM 193 (MUMBAI) ORDER DATED 29 TH JUNE, 2012. THE LD. COUNSEL FOR THE ASSESSEE ALSO CONSENT ED THAT THE ISSUE INVOLVED IN ALL THE APPEALS ARE IDENTICAL . 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THESE APP EALS CONTAINS IDENTICAL ISSUES, WERE HEARD TOGETHER, THE REFORE, BEING DISPOSED OF BY THIS COMMON AND CONSOLIDATED O RDER FOR THE SAKE OF BREVITY AND CONVENIENCE. IF THE OBSERVA TION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE T O THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MAT ERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RES PECTIVE COUNSELS, IF KEPT IN JUXTAPOSITION AND ANALYZED, TH E FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A NON-RESIDENT INDI AN (AS PER STATEMENT OF FACTS FILED BY THE ASSESSEE). UNDISPUT EDLY, HIS NON-RESIDENT STATUS WAS ACCEPTED BY THE DEPARTMENT ALL ALONG IN PAST AS IS EVIDENT FROM A.Y. 2005-06. THE ASSESSEE WAS REGULARLY FILED ITS RETURN OF INCOME IN HIS IND IVIDUAL CAPACITY IN THE STATUS OF THE NON-RESIDENT AND WAS ACCEPTED AS SUCH WHILE FRAMING THE ASSESSMENT U/S 143(3) OF THE ACT. THE ASSESSING OFFICER AFTER DUE EXAMINATION OF PERI OD OF STAY, ACCEPTED THE STATUS OF THE ASSESSEE AS NON-RESIDEN T (A.Y. 2005-06). A SEARCH ACTION U/S 132 OF THE ACT WAS C ARRIED OUT IN THE CASE OF THE ASSESSEE BY THE DDIT(INVESTIGATI ON) ON 15/05/2008, WHILE THE ASSESSEE WAS ABROAD, AT THE P REMISES OF THE COMPANY AND ALSO OF THE DIRECTORS (SHRI CMP SINGH, AMIT KUMAR, RAJESH SONI, DILIP KUMAR BHAGAT), THE A SSESSEE. MR. BINOD KUMAR SINGH 7 CONSEQUENT TO THE SEARCH, M/S GANOM BIOTECH PVT. LT D. (HEREINAFTER IN SHORT GBPL) WAS ALSO PUT TO SEARCH. THE CASES OF THE PRESENT ASSESSEE (MR. BINOD KUMAR SINGH), HI S WIFE MS. SHEILA SINGH, HIS DAUGHTER MS. TRISHA SINGH WER E CENTRALIZED AND THUS NOTICE U/S 153A WAS ISSUED ON 24/07/2008 TO THE PRESENT ASSESSEE. THE ASSESSEE, B EFORE THE SEARCH, WAS ASSESSED TO TAX IN WARD NO.21(3)(1) MUMBAI. HE FILED HIS RETURN ON 17/08/2008 FOR A.Y. 2008-09 IN THE SAID WARD DECLARING INCOME OF RS.93,41,381/-. IN RE SPONSE TO NOTICE U/S 153A, HE FILED THE RETURN ON 30/10/2008 DECLARING INCOME OF RS.85,66,442/- FOR A.Y. 2008-09. IT IS NO TEWORTHY THAT, AS PER THE REVENUE, CERTAIN INCRIMINATING DOC UMENTS WERE FOUND AND SEIZED. ON EXAMINING OF THE DOCUMEN TS, IT WAS FOUND THAT THE COMPANY GBPL WAS OPERATING IN UK RAINE, WHEREIN, THE COMPANY CLAIMED HUGE AMOUNT OF ADVERTI SING AND MARKETING EXPENSES FOR MARKETING ITS PRODUCTS I N THAT COUNTRY. IT WAS ALSO FOUND THAT PAYMENT TOWARDS THE SE EXPENSES WERE MADE TO THE COMPANIES BASED IN CYPRUS AND UK. AS PER THE REVENUE, ALL THESE COMPANIES ARE CON TROLLED BY SHRI BINOD KUMAR, FOUNDER AND CMD OF GBPL AND SE VERAL RUBBER STAMPS OF VARIOUS COMPANIES/ENTITIES WERE AL SO FOUND IN THE COMPANIES PREMISES DURING SEARCH. SHRI BINOD KUMAR ALONG WITH ONE OF THE DIRECTORS OF GBPL, MR. CMP SI NGH WAS EXAMINED ON OATH WITH RESPECT TO ACTIVITIES OF THE COMPANY. AS PER THE REVENUE, EVASIVE REPLIES WERE GIVEN BY T HESE PERSONS AND IN THE MID OF INVESTIGATION, MR. BINOD KUMAR WENT ABROAD. MR. BINOD KUMAR SINGH 8 2.3. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT FINDING OF THE L D. COMMISSIONER OF INCOME TAX (APPEALS), CONTAINED IN THE IMPUGNED ORDER. THE WRITTEN SUBMISSIONS, THOUGH AR E PART OF THE IMPUGNED ORDER, BUT STILL WE ARE REPRODUCING THE SAME FOR READY REFERENCE FOR REACHING TO A PROPER CONCLU SION:- 3.THE FACTS AS MENTIONED IN THE STATEMENT OF FACTS AND REITERATED IN THE WRITTEN SUBMISSIONS ARE AS UNDER: - SHRI BINOD KUMAR SINGH SLO LATE SHRI M P. SINGH AN INDIAN CITIZEN WAS BORN IN INDIA ON 14.11.1960. AFTER HAVING COMPLETED HIS HIGHER SECONDARY EDUCATION AT ST. XAVIER'S COLLEGE, RANCHI, JHARKHAN D, IN 1978, WAS SELECTED BY THE PUBLIC SECTOR UNDERTAKING MIS HEAVY ENGINEERING CORPORATION LTD. RANCHI AND SENT TO SOVIET UNION FO R FURTHER EDUCATION. AFTER COMPLETING THE RUSSIAN LANGUAGE COURSE AT LOM ONOSOVA INSTITUTE AT KIEV IN 1978-79, THE APPELLANT SECURED ADMISSION AT THE 'ODESSA POLYTECHNIC INSTITUTE' UKRAINE IN 1979, WHEREIN HE PURSUED HIS STUDIES IN MASTER OF ENGINEERING IN RADIO TECHNICAL ENGINEERIN G. AFTER HAVING PASSED OUT FROM THE AFORESAID INSTITUTE IN 1984, THE APPEL LANT DID A SHORT STINT OF WORKING IN A TRADING PHARMA COMPANY IN SOVIET UNION . FROM 1989 TO 1995 HE WORKED IN A TRADING COMPANY IN UKRAINE. HE, THEREAFTER, HE SET UP HIS BUSINESS OF A TRADING HOUSE IN THE PHARMACEUTICAL SECTOR IN RUSSIA, UKRAINE AND CIS CO UNTRIES UNDER THE NAME OF 'TRIGRAM INTERNATIONAL' THE BUSINESS VENTUR E WAS SUCCESSFUL AND CONSEQUENTLY THE APPELLANT ACQUIRED RESIDENTIAL PROPERTIES IN UKRAINE IN 1995 AND 1997 THE APPELLANT CONTINUED TO MAINTAIN PERMANENT RESIDENCE IN UKRAINE CONDUCTING BUSINESS THEREIN AND THEN IN CYPRUS ETC TILL HE SHIFTED TO UK IN LATE 20021 EARL Y 2003, EVEN THOUGH HIS BUSINESS INTERESTS CONTINUED IN UKRAINE! CIS COUNTR IES. THE APPELLANT ALONG WITH HIS FAMILY SHIFTED RESIDEN CE TO ENGLAND, THOUGH HIS BUSINESS INTEREST CONTINUED IN UKRAINE, RUSSIA, CIS COUNTRIES. INITIALLY HE WAS RESIDING AT 3 CIVIC WAY, ILFORD, ESSEX, UK W HICH WAS PURCHASED IN FY 2002-2003. THEREAFTER HE SHIFTED TO OTHER RESIDE NTIAL PREMISES WHICH WERE ACQUIRED IN A Y 2005-06 AT RUSDEN GARDEN S, ILFORD, ESSEX, UK AND ULTIMATELY AT 9, HADRIAN WAY, CHILLWORTH, SO UTHAMPTON, UK PURCHASED IN A Y2008-09. THAT DESPITE HAVING SHIFTED THE PLACE OF RESIDENCE TO UK, THE APPELLANT CONTINUED TO RETAIN HIS INVESTMENTS IN UKRAINE AS N O SUBSTANTIVE BUSINESS MR. BINOD KUMAR SINGH 9 WAS BEING CONDUCTED IN UK AND THE PRIMARY SOURCE OF INCOME ABROAD WAS THROUGH THE BUSINESS VENTURE / INVESTMENTS MADE IN RUSSIA, UKRAINE, CIS COUNTRIES AND CYPRUS . SR. NO. PASSPORT NO. PLACE OF ISSUE VALIDITY REMARKS 1. R-691005 UKRAINE/KIEV 30/06-94-31/08/98 FILED AS ADDITIONAL EVIDENT 2. U-925810 UKRAINE/KIEV ADDITIONAL BOOKLET TO PASSPORT NO.R- 691005 ISSUED ON 04/08/1997 FILED AS ADDITIONAL EVIDENT 3. U-925873 UKRAINE/KYIV ADDITIONAL BOOKLET ISSUED ON 22/01/1998- 18/06/2001 ORIGINAL PASSPORT MISPLACED 4. A-1280977 UKRAINE/KYIV 19/06/2001- 21/01/2008 ADDITIONAL BOOKLET TO PASSPORT NO.R-691005 ISSUED ON 04/08/1997 AS ADDITIONAL EVIDENCE 5. Z-1023527 UKRAINE/KYIV 14/05/2003- 21/01/2008 PRODUCED BEFORE AO 6. Z-1023527 UKRAINE/KYIV 23/08/2006- 10/08/2006 PRODUCED BEFORE AO THE APPELLANT PRODUCED THE ORIGINAL PASSPORTS BEARI NG NOS. Z-1023527, Z-1023582, DURING THE COURSE OF ASSESSMENT PROCEEDI NGS. THE ORIGINAL PASSPORT BEARING NO U 925873 FOR THE PERIOD 22.1.19 98 TO 18.6.2001 WAS NOT TRACEABLE COULD NOT LOCATE THE SAME. THE APPELLANT WITH A DESIRE TO SET UP AND MAKE INVE STMENTS IN INDIA STARTED A PHARMACEUTICAL COMPANY UNDER THE NAME AND STYLE OF 'BRAHMA DRUGS PVT. LTD WHICH WAS INCORPORATED IN AY 1999- 00. THEREAFTER 'GENOM BIOTECH PVT. LTD.' WAS INCORPORAT ED IN 2001-02 HAVING ITS MANUFACTURING PLANT AT MIDC SINNAR, NASI K (INDIA) AND ITS REGISTERED OFFICE AT A- 601 / 602, DELPHI, ORCH ARD AVENUE, HIRANANDANI BUSINESS PARK, POWAI, MUMBAI. THE AFORESAID INVESTMENT AS ALSO THE INVESTMENTS MA DE IN ACQUIRING VARIOUS REAL ESTATE PROPERTIES IN INDIA WERE THROUG H REMITTANCES FROM OVERSEAS. THE INVESTMENTS IN INDIA IN THE STOC K EXCHANGE THROUGH DEMAT ACCOUNTS WERE ALL CLASSIFIED AS NON-R ESIDENT. THE PERIOD OF STAY OF THE ASSESSEE IN INDIA AS COMP UTED AND VERIFIABLE FROM THE ORIGINAL PASSPORTS, AS PRESENTLY AVAILABLE , DETAILED AC UNDER:- MR. BINOD KUMAR SINGH 10 A.Y. F.Y. DAYS OUTSIDE INDIA DAYS IN INDIA RESIDENTIAL STATUS REMARKS 1995-96 1994- 95 337 28 NON RESIDENT 1996-97 1995- 96 306 59 NON RESIDENT 1997-98 1996- 97 337 28 NON RESIDENT 1998-99 1997- 98 346 19 NON RESIDENT PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT. NO. OF DAYS COMPUTED FOR THE PERIOD 1 ST APRIL 1998 TO 31 ST AUGUST 1998. 1999-00 1998- 99 N.A. N.A. PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 2000-01 1999- 00 N.A. N.A. PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 2001-02 2000- 01 N.A. N.A. PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 2002-03 2001- 02 215 150 PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 2003-04 2002- 03 206 159 NON RESIDENT (AS PER SECTION 6(1)(C) READ WITH EXPLANATION (B) PERIOD COMPUTED FROM ORIGINAL PASSPORT 2004-05 2003- 261 104 PERIOD COMPUTED MR. BINOD KUMAR SINGH 11 04 NON RESIDENT (AS PER SECTION 6(1)(C) READ WITH EXPLANATION B FROM ORIGINAL PASSPORT. STAYED IN INDIA FOR LESS THAN 182 DAYS FOR EACH PREVIOUS YEAR AND CONTINUOUSLY RESIDENT ABROAD. 2005-06 2004- 05 187 178 2006-07 2005- 06 223 142 2007-08 2006- 07 265 100 2008-09 2007- 08 188 177 2009-10 2008- 09 288 77 THE BANKING ACCOUNTS IN THE NAME OF THE APPELLANT A ND ALL FAMILY WERE ALL CLASSIFIED AS NON-RESIDENT DETAILED AS UNDER:- 1 013-055678-006/0074/008 (NRE/NRO/PI) HSBC BANK PLOT NO.3/1, EDEN SQUARE NS ROAD, NO- 10, JVPD, SCHEME JUHU VILE PARLE(W), MUMBAI- 400049 29, RUSHDEN GARDENS, ILFOR CITY, ESSEX, UK, IG50BP 2 246010100129879/ 246010100125772 (NRO/NRE) AXIS BANK LTD SHOP NO.17 & 18, GR. FLR. VENTURA BLDGS, HIRANANDANI, BUSINESS PARK, POWAI, MUMBAI- 400076 9 HADRIAN WAY, CHILWORTH, SOUTHAMPTON, SO 16 7HZ 3 NJSB000052146 (NRE) CANARA BANK NEW MARINE LINES, MUMBAI- 400020 STR STARONAVODNITSKAY A 6A, FLAT NO.44, KYIV, UKRAINE 4 10000019132/10000017974 (NRE/NRO) STATE BANK OF INDIA PBB STR STARONAVODNITSKAY MR. BINOD KUMAR SINGH 12 HIRANANDANI, HIRANANDANI COMPLEX, POWAI, MUMBAI A 6A, FLAT NO.44, KYIV, UKRAINE 5 01191083075 (SB) STATE BANK OF INDIA SATPUR INDUSTRIAL AREA H NASHIK C/O TRIGRAM UKRAINE 6. 009013100016996 (SB) BANK OF INDIA S.S. I-ANDHERI (E) BRANCH, MATHURIA APTS., 49, .M.V. ROAD, ANDHERI (E), MUMBAI- 400069 VOROBIEVY GORY PLOT NO.02, FLOOR 38, STREET, MOSFILNOVSKAYA, MOSKOW, RUSSIA, 7. 010613100001157 (NRE) BANK OF INDIA MUMBAI CORPORATE BANKING BRANCH FORT- MUMBAI STAR- STARONAVODNITSKAYA 6-A, FLAT NO.44, KYIV, UKRAINE. THE PARTICULARS OF ALL IMMOVABLE PROPERTIES PURCHAS ED AND OWNED BY HIM IN INDIA AND ABROAD ARE DETAILED AS UNDER:- SR. NO. PARTICULARS OF PROPERTY DATE OF ACQUISITION COST SOURCE OF INVESTMENT 1 50% SHARE IN HOUSE JAMUNA APARTMENT, FLAT NO.92, BORING ROAD, P.S. S.K. PURI, PATNA-13 14/09/1992 2,00,000/- (SHARE OF A-RS 1,00,000/-) REMITTANCE FROM ABROAD 2 FLAT NO.44, HOUSE NO. N-6A, STARONAVODNYTSKAYA STREET APT. 44 KYIV UKRAINE) 09/06/1995 7500000/- (SEVEN HUNDRED FIFTY MILLION KARBOVANTES) 3 50% SHARE IN HOUSE- FLAT NO.118, BUILDING NO.102, SILVER OAKS APARTMENTS,D.L.F QUTUB ENCLAGE-1, GURGAON 18/11/1996 RS.15,03,260/- DIRECT REMITTANCE FROM ABROAD 4 FLAT NO.43, HOUSE NO.N-6A STARONAVODNYTSKAYA STREET APT. 44 KYIV 25/04/1997 200/TWO HUNDRED GRIVNYAS MR. BINOD KUMAR SINGH 13 UKRAINE) 5 B-603/A, & B-603/B VALENCIA, HIRANANDANI GARDENS, POWAI, MUMBAI 19/03/1998 B-603/A RS.36,76,160, B- 603/B RS.22,76,040/- LOAN FROM HDFC BANK LTD. RS.50,00,000/- BALANCE DIRECT REMITTANCE FROM ABROAD 6 RESIDENTIAL HOUSE IN U K AT 3 CIVIC WAY, ILFORD, IG6 1HF IN JOINT NAME OF BINOD SINGH & MRS. SHEILA SINGH 02/09/2007 (CORRECT DATED IS 31/03/2003 1,44,995/- GBP (RS.1.25 CRORES APPROX) PARTLY THRU LOAN BY MORTGAGE (ADDITION MADE IN 2008-09 IS INCORRECT 7 TIVOLI, FLAT NO. A-2702, B-2702, C-2702, D 2702 (AMALGAMATED) HIRANANDANI GARDENS NEAR HIRANANDANI BUSINESS PARK, POWAI, MUMBAI 02/03/2004 A-2702, B-2702, C-2702, D-2702 TOTAL- 2,61,60,966/- HSBC LOAN RS.1,91,00,000 & BALANCE SBI NRO & HSBC RS.21,00,000/- 8 OFFICE PREMISES-DELPHI, 601 & 602 (AMALGAMATED), HIRANANDANI BUSINESS PARK, HIRANANDANI GARDENS, POWAI, MUMBAI 25/05/2004 601- 1,36,99871/- 602/- 1,37,24,917/- (JOINT WITH COMPANY) HDFC LOAN RS.3.50 CR. AND DIRECT REMITTANCE FROM ABROAD 9 RESIDENTIAL HOUSE AT RUSDEN GARDENS, ILFORT ESSEX IGS OBP 20/07/2004 GBP 2,84,000/- (RS.2.50 CRORE APPROX) PARTLY THRU LOAN BY MORTGAGE 10 RESIDENTIAL HOUSE IN USA AT 32, SAND STONE ROAD, EAST WINDSOR, NJ08520 SEPT,2005 USD 419,800/- (RS.2 CRORES APPROX) 11 OFFICE PREMISES NO.604 & 605 (AMALGAMATED) POWAI PLAZA-2, HIRANANDANI BUSINESS PARK, HIRANANDANI GARDENS, POWAI, MUMBAI 20/02/2006 OFFICE PREMISES GIVEN ON LEASE BASIS 605 & 604- RS.3,03,14,999/- CENTURIAN BANK LOAN RS.2,10,00,000/- & RS.66,97,424/- FROM GBPL RS.26,17,575/- FROM HSBC NRO AND NRE A/C 12 RESIDENTIAL HOUSE IN UK-AT HADRIAN WAY, CHILWORTH, SOUTHAMPTON, SO 16 7HZ IN JOINT NAME OF BINOD SINGH & MRS. SHEILA SINGH 30/08/2007 GBP7,75,000/- (RS. 7 CRORES APPROX) PARTLY THRU LOAN BY MORTGAGE MR. BINOD KUMAR SINGH 14 13 FLAT NO.1905/2C, 1906/2C;1806/4A, 1906/4A;1906/4B, STATION ROAD, LBS MARG, BHANDUP, MUMBAI 29/11/2007 TOTAL COST OF FIVE FLATS RS.2,33,77,745/- RS.2,00,00,000/- WAS FINANCED BY DHFL & BALANCE FROM HSBC NRO & NRE A/X THE APPELLANT WAS REGULARLY FILING RETURN OF INCOME IN HIS INDIVIDUAL CAPACITY IN THE STATUS OF A NON-RESIDENT AND WAS DULY ASSESSED U/S 143(3) OF THE ACT VIDE ORDER DATED NOV EM BER 30, 2007 IN RESPECT OF A Y 2005-06 THE AO, AFTER DUE EX AMINATION OF THE PERIOD OF STAY, ACCEPTED THE STATUS OF NON-RESI DENT AS DECLARED BY THE ASSESSEE AND NO INCRIMINATING DOCUM ENTS FOUND DURING SEARCH WHICH WOULD WARRANT A CHANGE OF OPINI ON. THE INCOME TAX AUTHORITIES CONDUCTED A SEARCH OPERA TION U/S 132(1) OF THE INCOME TAX ACT, 1961 ON MAY 15, 2008 WHILE THE APPELLANT WAS ABROAD. THE SEARCH WAS CONDUCTED IN T HE NAMES AND ON THE PREMISES DETAILED UNDER:- (A) SHRI BINOD SINGH, SHRI CMP SINGH, 2702, TIVOLI, HIRANANDANI GARDENS, POWAI, MUMBAI. (B) GENOM BIOTECH PVT. LTD. A-504, 601, 602 & 604 DELPH I, ORCHARD AVENUE, HIRANDANI GARDENS, POWAI, MUMBAI. (C) GENOM BIOTECH PVT. LTD. MIDC, MALEGAON, SINNAR, NAS IK. (D) S/SH. CMI' SINGH, AMIT KUMAR, RAJESH SONI, DIIP KUM AR BHAGAT, (ALL DIRECTORS OF THE COMPANY) 4A / 1806, DREAMS CO -OP. HOUSING SOCIETY, BHANDUP (WEST) NEAR RAILWAY STATIO N, LBS MARG, MUMBAI. 2.1 DURING THE COURSE OF THE SEARCH, THERE WAS NO SEIZURE OF ASSETS. HOWEVER, CERTAIN DOCUMENTS WERE SEIZED THOUGH NONE OF THEM WERE INCRIMINATING AND HAVE NOT BEEN USED FOR MAKIN G ANY ADDITION. NOTICE U/S 153A & 143(2) OF THE INCOME TAX ACT WERE ISSUED BY THE AO AND DULY SERVED MR. BINOD KUMAR SINGH 15 SR. NO. A.Y. DATE OF ISSUE/SERVICE OF NOTICE U/S 153A DATE OF ISSUE/SERVICE OF NOTICE U/S 143(2) 1 2003-04 24/07/2008 17/11/2008 / 18/11/2008 2 2004-05 24/07/2008 17/11/2008 / 18/11/2008 3 2005-06 24/07/2008 17/11/2008 / 18/11/2008 4 2006-07 24/07/2008 17/11/2008 / 18/11/2008 5 2007-08 24/07/2008 17/11/2008 / 18/11/2008 6 2008-09 24/07/2008 17/11/2008 /18/11/2008 7 2009-10 NIL 27/04/2010 / 12/05/2010 THE PERIOD OF STAY OF APPELLANT IN INDIA AS COMPUTE D AND VERIFIED FROM ORIGINAL PASSPORTS FOR A.Y.2007-08 TO 2009-10 AS A CCEPTED BY THE AO IN THE ORIGINAL ASSESSMENT ORDER IS AS UNDER:- DATE OF ARRIVAL DT. OF DEPARTURE AS PER IMMIGRATION SEAL PREVIOUS YEAR NO. OF DAYS IN INDIA PAGE NO. IN THE ORIGINAL PASSPORT 01/04/06-13/04/06 2006-07 13 PG.52 22/10/06-06/11/06 16 PG.04 & PG.04 05/12/06-09/01/07 36 PG.03 & PG.07 25/02/07(ARR)-31/03/07 35 PG.07 100 01/04/07-18-04-07(DEP) 2007-08 18 PG.03 27/04/07-13/05/07 17 PG. 08 & PG.08 08/07/07-11/08/07 35 PG.09 & PG.09 19/08/07-16/09/07 29 PG.03 & PG.09 13.0108(ARR)-31/03/08 79 PG.13 178 01/04/08-08/04/08(DEP.) 2008-09 08 PG.31 23/05/08-16/06/08 25 PG.31 & PG.32 02/011/08-13/11/08 12 PG.32 &14 13/12/08-04/01/09 23 PG.03 & PG. 04 20/03/09(ARR) 31/03/2009 12 PG.04 80 PURSUANT TO NOTICE U/S 153A OF THE ACT, THE APPELLA NT FILED ITS RETURN OF INCOME IN THE STATUS OF A NON- RESIDENT I NDIAN, DECLARING THE INCOME OF RS. 1,98,911/- AS AGAINST T HE INCOME OF RS. 15,8001- DECLARED IN THE RETURN FILED U/S 139 O F THE INCOME TAX ACT, 1961, THE AO HAS FRAMED AN ASSESSMENT U/S 153A READ WITH SECTION 143(3) DATED DECEMBER 16, 2010 FOR THE A Y 2007-08 IN THE STATUS OF RESIDENT DETERMINING THE TAXABLE INCOME O F RS. MR. BINOD KUMAR SINGH 16 19,82,67,9141- AS AGAINST THE STATUS OF NON-RESIDEN T WITH A DECLARED INCOME OF RS. 1,98,911/- RESULTING IN AN A DDITION OF RS. 19,80,69,0031-. WHILE FRAMING THE ORDER, THE A 0 HAS RECORDED FINDINGS AS UNDER;- A. STATUS: HELD THAT CLAUSE (B) OF EXPLANATION TO SECTION 6(1) (C) IS NOT APPLICABLE TO THE APPELLANT. HELD THAT NOTHING WAS BROUGHT ON RECORD TO INDICATE THAT THE APPELLANT IS PERMANENTLY DOMICILED IN UK DESPITE DO CUMENTARY EVIDENCE HAVING BEEN FILED. HELD THAT THE APPELLANT IS A RESIDENT AND ORDINARIL Y RESIDENT IN INDIA LIABLE TO PAY TAX ON GLOBAL INCOME. B. ADDITIONS U/S 68 OF THE INCOME TAX ACT,1961 1 ALLEGED UNEXPLAINED DEPOSITS IN INDIA BANK A/CS THROUGH REMITTANCES FROM ABROAD. RS.17,06,95,475 /- 2 ALLEGED UNEXPLAINED REMITTANCES FROM OVERSEAS TO GENOM BIOTECH PVT. LTD. RS.93,47,871/- 3 ALLEGED UNEXPLAINED DEPOSITS IN BANK A/CS MAINTAINED ABROAD -RS.1,72,24,053/- 4 ALLEGED UNSUBSTANTIATED LIABILITIES RS.7,91,604/ - TOTAL RS.19,08,69,003/- THE APPELLANT FILED COMBINED WRITTEN SUBMISSIONS FO R THE AY'S 2003-04 TO 2009-10 ALONG WITH PAPER BOOK THEREOF, C OPY OF WHICH WAS FORWARDED TO THE AO FOR HIS COMMENTS. THE AO FURNISHED HIS COMMENTS BY WAY OF REMAND REPO RT DATED OCTOBER 17, 2011 AND IN RESPECT OF RESIDENTIAL STAT US STATED 'DURING ASSESSMENT PROCEEDING REGARDING RESIDENTIAL STATUS THE ASSESSEE FURNISHED COPIES OF THE PASSPORT ALONG WITH THE DETAILS OF NO. OF DAYS OF STAY IN INDIA. THE ASSESS ING OFFICER HAVE ALREADY DISCUSSED RESIDENTIAL STATUS OF THE ASSESSE E IN DETAILS IN THE ASSESSMENT ORDER WHICH REVEALS THAT THE STATUS OF THE ASSESSEE IS 'RESIDENT AND ORDINARILY RESIDENT' AND NOT AS 'NON- RESIDENT' AS CLAIMED BY THE ASSESSEE. NO FURTHER VE RIFICATION IS REQUIRED IN THE ABOVE GROUND'. THAT DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT MR. BINOD KUMAR SINGH 17 FILED THE PETITION FOR ADDITIONAL EVIDENCE ON NOVEM BER 11,2011 IN TERMS OF RULE 46A OF THE INCOME TAX RULES, 1962, AL ONG WITH A PAPER BOOK CONTAINING 75 PAGES, CONSTITUTING THE ADDITIONAL EVIDENCE. THE SAID ADDITIONAL EVIDENCE, INTER ALIA CONTAINED EVIDENCE IN RESPECT OF:- STAY IN UK COMPRISING OF TELEPHONE/UTILITY/CREDIT C ARD STATEMENT OF UK, CHILDREN, UNDERGOING EDUCATION ABR OAD COPY OF TAX RETURN FILED IN UK RELATING TO RENTAL I NCOME SOURCES OF INVESTMENT IN INDIA INCLUDING FIRC, CERTIFICATES TO ESTABLISH DEPOSITS IN BANKS IN INDI A, GENOME BIOTECH PVT. LTD. CONFIRMATION FROM LAKEVIEW DEVELOPERS, ABHISHEK KUMAR, RAJESH JHA AND CONFIRMATION OF REGARDING TRANSFER O F SHARES. THE COPY OF PETITION ALONG WITH THE AFORESAID PAPER BOOK CONTAINING THE EVIDENCE WAS FORWARDED TO THE AO FOR HIS EXAMINATION, VERIFICATION AND SUBMITTING REPORT THE REON. THE AO HAS SUBMITTED HIS INTERIM REPORT DATED MARCH 22, 20 12 AND FINAL REPORT DATED APRIL 3, 2012 CONFIRMING THAT THE INTE RIM REPORT BE TREATED AS FINAL. THE AO IN BRIEF HAS IN HIS REP ORT STATED AS UNDER:- (A) THE APPELLANT HAS NOT FILED THE COPIES OF PASSPORT NO.U- 925873 AND HAS ALSO NOT PRODUCED THE ORIGINAL PASSPORT BEARING NOS.U-925873, A-1280977, Z-1023527 AND Z- 1023582 DURING THE REMAND PROCEEDINGS, DESPITE, BEI NG ASKED TO PRODUCE THE SAME. (B) THE AO IN TERM OF SECTION 133(6) OF THE ACT, SOUGHT INFORMATION FROM FRRO, MUMBAI, FRRO DELHI AND CENTR AL FOREIGNERS BUREAU DELHI. WHILE, FRRO DELHI AND CENT RAL FOREIGNERS BUREAU DELHI HAVE SENT THE DETAILS FOR T HE WHOLE PERIOD, FRRO MUMBAI HAS GIVEN DETAILS OF ARRIVAL/ D EPARTURE ONLY AFTER NOVEMBER 20, 2005. THE AO ON THE BASIS O F THE INFORMATION RECEIVED FROM THE SAID AGENCIES AND AS PER THE PASSPORT HAS RE-COMPUTED THE PERIOD OF THE STAY OF THE APPELLANT IN INDIA. THE RELEVANT EXCERPTS FROM THE INFORMATIO N IN THE TABLE SUBMITTED IN THE REPORT FOR THE AY 2007-08 TO 2009- 10 IS AS UNDER : MR. BINOD KUMAR SINGH 18 DT. OF ARRIVAL DATE OF DEPARTURE NO. OF DAYS IN INDIA (PASSPORT NO) AND REMARKS NO. OF DAYS AS PER ASSESSEE F.Y.2006-07 01/04/06 13/04/06 13 Z-1023527 12 22/10/06 06/11/06 16 Z-1023582 15 05/12/06 09/11/07 36 Z-1023582 35 25/02/07 31/03/07 35 Z-1023582 34 120 DAYS TOTAL TO READ 100 DAYS 96 F.Y.2007-08 01/04/07 18/04/07 18 Z-1023582 17 27/04/07 13/05/07 17 Z-1023582 16 08/07/07 11/08/07 35 Z-1023582 34 19/08/07 16/09/07 29 Z-1023582 28 31/01/08 31/03/08 79 (Z-1023582) AS PER ASSESSEE THE NO. OF DAYS OF STAY IN INDIA IS 78. HOWEVER, ON CALCULATION IT IS ARRIVED AT 79 178 DAYS 173 F.Y.2008-09 01/04/08 08/04/08 8 (Z-1023582) ASSESSEE ARRIVED IN INDIA ON 13/01/2008 AND LEFT ON 08/04/08 7 23.05.08 16.06.08 25 (Z-1023582) AS PER ASSESSEE THE NO. OF DAYS OF STAY IN INDIA IS 24. HOWEVER, ON CALCULATION IT IS ARRIVED AT 25 DAYS 24 02/11/08 13/11/08 12 (Z-1023582) AS PER ASSESSEE THE NO.OF DAYS STAY IN INDIA IS 11. HOWEVER, ON CALCULATION, IT IS ARRIVED AT 12 DAYS 11 13/12/08 04/01/09 23 (Z-1023582) AS PER ASSESSEE THE NO.OF DAYS STAY IN INDIA IS 22. HOWEVER, ON CALCULATION, IT IS 22 MR. BINOD KUMAR SINGH 19 ARRIVED AT 23 DAYS 20/03/09 31/03/09 12 Z-1023582 11 TOTAL 75 THE APPELLANT FILED HIS WRITTEN REPLY TO THE REMAND REPORT SUBMITTING WHAT HE HAD STATED DURING COURSE OF HEAR ING ON MARCH 26, 2012, IN WHICH SHRI U.N. MARWAH, FCA COUNSEL OF THE APPELLANT AND THE AO WERE PRESENT. SHRI MARWAH POINTED OUT THAT THE STATEMENT OF THE A O THAT THE APPELLANT HAD NOT PRODUCED THE ORIGINAL PASSPORT NO S. Z-1023527, A-1280977 WAS INCORRECT AND IN PRESENCE OF THE AO T HE ORIGINAL PASSPORTS WERE AGAIN PRODUCED. THE AO ACCEPTED THIS FACT AS HE STATED THAT HE WAS REFERRING TO NON-PRODUCTION OF T HE ORIGINAL PASSPORTS BEARING NOS.Z-1023582 AND U925873. THE PO INTED OUT THAT THE PASSPORT NO. Z-1023582 WAS PRODUCED IN THE ASSESSMENT PROCEEDINGS AND WAS NOT PRODUCED DURING PROCEEDINGS OF ADDITIONAL EVIDENCE. THE PASSPORT NO.U-925873 RELAT ING TO THE PERIOD ......TO 18.06.200 1 WAS MISPLACED AND NEITH ER A COPY NOR THE ORIGINAL COULD BE PRODUCED. THE COUNSEL PLEADED THAT THE AO, PURSUANT TO THE PE TITION FOR ADDITIONAL EVIDENCE WAS REQUIRED TO EXAMINE AND SUB MIT HIS REMAND REPORT WITH RESPECT TO THE ADDITIONAL EVIDEN CE SOUGHT TO BE ADMITTED BY THE ASSESSEE UNDER RULE 46A. HOWEVER , AFTER RECEIPT OF THE PETITION FOR ADDITIONAL EVIDENCE, IN STEAD OF RESTRICTING THE INQUIRY / INVESTIGATION WITH RESPEC T TO THE ADDITIONAL EVIDENCE HAS UNLAWFULLY STARTED RE-EXAMI NATION OF THE STATUS BY MAKING ENQUIRIES FROM FRRO MUMBAI FRRO DE LHI AND CENTRAL FOREIGNERS BUREAU DELHI. THE ASSUMPTION OF POWERS AND JURISDICTION UNDER SECTION 133(6) WAS NOT IN ACCORD ANCE WITH LAW. HE SUBMITTED THAT THE AO FURNISHED A REMAND REPORT DATED 17 TH OCTOBER, 2011 AND IN RESPECT OF RESIDENTIAL STATUS STATE NO FURTHER VERIFICATION IS REQUIRED IN THE ABOVE GROUND. THE COUNSEL PLEADED THAT THE DATES OF ARRIVAL/ DEPA RTURE IN /FROM INDIA ARE CORRECT, AS PER ASSESSMENT ORDER AND ACCE PTED BY THE APPELLANT, BUT PERIOD OF STAY IN INDIA, DETERMINED BY THE AO IS INCORRECT AS THE AO HAS CALCULATED THE PERIOD OF EA CH VISIT BY INCLUDING BOTH THE DATE OF ARRIVAL AND DEPARTURE WH ICH IS NOT IN ACCORDANCE WITH LAW. THE FIRST ISSUE TO BE DECIDED IS WHETHER THE ADDITI ONAL EVIDENCE FILED BY THE APPELLANT UNDER RULE 46A SHOULD BE ADM ITTED OR NOT. THE PETITION FILED BY THE APPELLANT CONTAINING 316 PAGES WAS FURNISHED TO THE AO GRANTING OPPORTUNITY TO EXAMINE THE SAME AND MR. BINOD KUMAR SINGH 20 THE AO HAS SUBMITTED HIS REPORT DATED MARCH 22, 201 2. THE APPELLANT HAS SUBMITTED THAT DUE TO CIRCUMSTANC ES BEYOND HIS CONTROL, THE OLD PASSPORTS NOT BEING REA DILY AVAILABLE WITH HIM, THE SAME COULD NOT BE FILED. TH E APPELLANT BEING RESIDENT ABROAD COULD NOT FURNISH THE REQUISI TE INFORMATION PERTAINING TO THE SOURCES OF INVESTMENT IN INDIA, A S THE SAME WAS TO BE OBTAINED FROM THE BANKER AND OLD INFORMATION WAS NOT EASILY ACCESSIBLE. THE COUNSEL PLEADED THAT THE DOCUMENTS FILED BY THE APPELLANT GO TO THE ROOT OF THE ASSESSMENT AND ARE NECESSARY FOR ARRIVING AT A JUDICIOUS DECISION. HE HAS CITED THE FOLLOWING JUDGMENTS:- CIT VS SURETECH HOSPITAL AND RESEARCH CENTRE LTD (2 007) 293 ITR 53 (BORN) THE RULE 46A OF THE 1962 RULES ALLOWS THE APPELLANT AUTHORITY TO PERMIT PRODUCTION OF DOCUMENTS WHICH ENABLE HIM TO DISPOSE OF THE APPEAL TRIBUNAL FOUND THAT THE DOCUMENTS PRODUC ED WERE NECESSARY FOR DISPOSAL OF THE APPEAL ON THE MERITS. HOWEVER, BEFORE ADMITTING THE ADDITIONAL EVIDENCE, THE CIT(A ) HAS TO GIVE OPPORTUNITY TO THE ASSESSING OFFICER TO CONSIDER OR CROSS EXAMINE OR REBUT THE ADDITIONAL SUPPORTING EVIDENCE FURNISH ED BY THE ASSESSEE. IN THE FOLLOWING CASES, THE COURTS HAD OC CASION TO CONSIDER UNDER WHAT CIRCUMSTANCES, THE ADDITIONAL E VIDENCE CAN BE ENTERTAINED BY THE APPELLATE AUTHORITIES. ELECTRA (JAIPUR)(P) LTD VS INSPECTING ASSISTANT COM MISSIONER (DELHI) 26 LTD 236 WHETHER IF EVIDENCE PRODUCED BY ASSESSEE IS GENUINE ,RELIABLE AND PROVES ASSESSEE'S CASE ,THEN ASSESSEE SHOULD NO T BE DENIED OPPORTUNITY OF IT BEING PRODUCED EVEN IF HE FIRST T IME PRODUCES BEFORE APPELLANT AUTHORITY-HELD YES. SMT .PRABHAVATI S.SHAH VS CIT (BORN) 2311TR 1 PRODUCTION OF ADDITIONAL EVIDENCE -ASSESSEE TAKING LOANS FROM 2 CREDITORS -ITO TREATING LOANS AS INCOME FROM UNDISC LOSED SOURCES AS SUMMONS COULD NOT BE SERVED ON CREDITORS - ITO T REATING LOANS AS INCOME FROM UNDISCLOSED SOURCES AS SUMMONS COULD N'T BE SERVED ON CREDITORS -ASSESSEE WANTING TO GENUINENES S OF LOAN BY RELYING ON FACT THAT AMOUNT BORROWED AND RE PAID BE CHEQUES-ASSESSEE PRODUCING ADDITIONAL EVIDENCES BUT AAC REFUSED TO ADMIT-AAC SHOULD HAVE CONSIDERED IT -MATTER REMA NDED. MR. BINOD KUMAR SINGH 21 ITO VS BAJORIA FOUNDATION (CAL) 2541TR 65 APPEAL CIT (A) -POWERS OF CIT (A)-POWERS OF CIT (A) -POWER TO ADMIT ADDITIONAL EVIDENCE -EFFECT OF SEC 250 AND RULE 46A-NO OPPORTUNITY FOR TRUST TO PRESENT EVIDENCE-CIT(A) JU STIFIED IN ADMITTING THE ADDITIONAL EVIDENCE. 3.20 THUS, HAVING REGARD THE SUBMISSIONS OF THE COU NSEL AND THE AO, AND CONSIDERING THE REPORT OF THE AO, I ADMIT TH E ADDITIONAL EVIDENCE AS SUBMITTED BY THE APPELLANT AS SAME GOES TO THE ROOT OF THE MATTER AND IS NECESSARY FOR REACHING A DECISION ON THE CASE. 4. ADDITIONAL GROUND:- 'THAT THE LID. A 0 HAS ERRED IN COMPUTING THE PERIO D OF STAY IN INDIA BY INCLUDING THEREIN BOTH THE DAY OF ARRIVAL AND DE PARTURE, AS REPRESENTING STAY IN INDIA '. THE COUNSEL SUBMITTED THAT THE DAY OF ARRIVAL HAS T O BE EXCLUDED FOR CALCULATING THE NUMBER OF DAYS. FOR IN STANCE, IF A PERSON ARRIVES ON 10TH AND LEAVES ON F' THE PERIOD WOULD BE ONE DAY AND NOT TWO. THE APPELLANT DREW SUPPORT FOR THI S PROPOSITION FROM THE CASE OF MANOJ KUMAR REDDY V ITO ITA T BANGALAORE (2009) 34 SOT180, (2010) 132TTJ 328. THE HON'BLE MEMBERS HAVE RELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF PRAVEEN KUMAR V SUNDER SINGH MAKKAR. THE HON'BLE HIGH COURT REFERRED TO SECTION 9 OF THE GENERAL CLAUSES ACT AND HELD 'IF THE WORD FROM IS USED THEN THE FIRST DAY IN THE SER IES OF DAYS WILL STAND EXCLUDED AND IF THE WORD TO IS USED THEN IT W ILL INCLUDE THE LAST DAY IN A SERIES OF DAYS OR ANY OTHER PERIOD OF TIME '. THE HON'BLE MEMBERS OBSERVED THAT THE PERIOD IS TO BE COUNTED FROM THE DATE OF ARRIVAL OF THE ASSESSEE IN INDIA TO THE DATE HE LEAVES INDIA. THUS, THE WORD 'FROM' AND 'TO' ARE TO BE INEVITABLY USED FOR ASCERTAINING THE PERIOD THOUGH, THESE WORDS ARE NOT MENTIONED IN THE STATUTE. ACCORDINGLY, WE H OLD THAT FIRST DAY OF EACH VISIT SHALL BE EXCLUDED' I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE AO. THE FACTS AS MENTIONED IN THE CASE OF THE APPELLANT ARE FILLY COVERED BY THE JUDGMENT AS MENT IONED ABOVE WHICH STATES THAT WHILE THE COMPUTING THE PER IOD OF STAY OF A PERSON IN INDIA, THE DATE OF ARRIVAL IS TO BE EXC LUDED. ACCORDINGLY, I HOLD THAT THE PERIOD OF STAY IN INDI A OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2007-08 TO 2009-10 SHALL B E 96, 173 AND 75 DAYS RESPECTIVELY AS AGAINST 100 DAYS, 178 DAYS & 8 0 DAYS DETERMINED BY THE AG. MR. BINOD KUMAR SINGH 22 5. GROUND NO. L: '1.1 THAT ON FACTS AND IN LAW THE LEARNED AO ERRED IN FRAMING AN ASSESSMENT U/S 143(3)1153.4 DETERMINING THE STATUS OF THE APPELLANT AS 'RESIDENT' AS AGAINST 'NON-RESIDENT' D ECLARED BY THE APPELLANT AND ACCEPTED AS SUCH IN EARLIER YEARS. 1.2 WHILE DETERMINING THE STATUS OF THE APPELLANT A S 'RESIDENT', THE LEARNED A 0 HAS ERRED IN..- (I) HOLDING THAT CLAUSE (B) OF EXPLANATION TO SECTION 6 (1)(C) IS NOT APPLICABLE TO THE APPELLANT. (II) HOLDING THAT THE APPELLANT HAS FAILED TO DISCHARGE ITS ONUS OF ESTABLISHING THAT HIS STAY IN INDIA DURING THE YEAR WAS LESS THAN 182 DAYS. (III) HOLDING THAT THE APPELLANT WAS IN FACT PERMANENTLY RESIDING IN INDIA AND UNDERTOOK VISITS ABROAD. (IV) HOLDING THAT NOTHING WAS BROUGHT ON RECORD TO INDIC ATE THAT THE APPELLANT WAS PERMANENTLY SETTLED ABROAD. 1 7 THAT WHILE DETERMINING THE STATUS OF THE APPELLANT AS 'RESIDENT AND ORDINARILY RESIDENT' THE LEARNED A. 0 . HAS FAILED TO CONSIDER THE PERIOD OF STAY OF THE APPELLANT IN IND IA IN THE PRECEDING NINE / SEVEN YEARS, NOR APPRECIATE THE PROVISIONS O F SECTION 6(6).' THE AO HAS DEALT WITH THE ISSUE RELATING TO RESIDEN TIAL STATUS AT PARA 19 OF ORDER. THEAO HAS ON THE BASIS OF THE PAS SPORT PREPARED A TABULAR CHART STATING THE PERIOD OF STAY IN INDIA COMMENCING FROM OCTOBER 1, 2003 AS THE TORT FOR THE EARLIER PE RIOD WAS NOT AVAILABLE. THE AO HAS MENTIONED THAT RECORDS AT PARA D, PAGE 2 0 OF THE ORDER STATES AS UNDER:- 'IN THIS CASE UNDER CONSIDERATION FOR F.Y.'S 2002-0 3, 2001- 02, 2000-01, 1999-00, NO INFORMATION HAS BEEN SUBMI TTED BY THE ASSES SEE, THEREFORE IN THE ABSENCE OF INFORMATION HIS CLAIM OF NRI CANNOT BE ENTERTAINED.' RECORDS AT PARA 1, PAGE 23 OF THE ORDER STATES THAT 'ASSESSEE CAN CLAIM THE BENEFIT OF RELAXATION PROVI DED IN EXPLANATION (B) ONLY WHEN IT IS ESTABLISHED THAT TH E ASSESSEE IS PERMANENTLY DOMICILED ABROAD OR DUE TO CERTAIN REAS ON HE IS BEING OUTSIDE INDIA COMES TO INDIA ONLY ON VISIT. THE WOR D ' VISITOR' AS UNDERSTOOD IN COMMON PARLANCE IS .....'MEET A PERSO N'. WHEN A PERSON HAVING HIS RESIDENCE AND PLACE OF WORK AT A PLACE COMES AND STAYS THAT PLACE, HE SHALL NOT BE TREATED AS A VISITOR. THIS MR. BINOD KUMAR SINGH 23 ASPECT IS MOST STRENGTHENED BY THE FACT THAT THE AS SESSEE HAS HIS HOME AND PART OF HIS FAMILY (PARENTS) IN INDIA. THE BUSINESS EMPIRE RUN BY HIM IS TOTALLY BASED IN INDIA. THE CO MPANY'S MAJOR ACTIVITY OF MANUFACTURING AND EXPORT ACTIVITY IS FU LLY CONTROLLED BY THE INDIAN TERRITORY. THE ASSESSEE HAS NO OTHER SOU RCE OF INCOME EXCEPT THE BUSINESS ACTIVITY CARRIED OUT BY HIM FRO M INDIA. THEREFORE, THE INTERPRETATION OF THE TERM 'BEING OU TSIDE INDIA, COMES ON A VISIT TO INDIA' IS RELEVANT ' IN THE LIGHT OF THE FACTS. THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE TO PROVE WH Y HE IS BEING OUTSIDE INDIA AND COMES ON A VISIT IN INDIA.' IN PARA E AT PAGE 24 OF THE ORDER MENTIONS AS UNDER 'THE ASSESSEE HAS FURNISHED COPIES OF CERTAIN DOCUM ENTS ........SCHOOL CERTIFICATES OF MS. TRISHA SINGH (DA UGHTER), MASTER VYOM SINGH (SON), ELECTRICITY BILLS, CLUB CARDS, PR OPERTY DOCUMENTS . ...... HOW THESE DOCUMENTS ARE RELEVANT FOR HIS C LAIM OF NRI STATUS. THE ASSESSEE HAS FURNISHED A RESIDENT PERMIT BY UK IN MARCH 2009 .............ASSESSEE HAS NOT FURNISHED ANY DE TAIL TO PROVE THAT HE WAS DOMICILED IN UK FROM FY 2002-03 TO 2008-09. IT IS ALSO NOTICED THAT FOR THE PREVIOUS YEAR 2004-05, THE INF ORMATION FURNISHED BY THE ASSESSEE REGARDING THE NO. OF DAYS OF STAY IN INDIA IS INCOMPLETE AS POINTED OUT IN THE ABOVE SAI D LETTER. (SEE AT POINT NO.3 OF PARA NO. 20(C) OF THIS ORDER). THE ASSESSEE HAS ONLY FURNISHED THE DATE OF DEPARTURE FROM INDIA BUT HAS NOT FURNISHED THE DATE OF ARRIVAL IN INDIA.'IN VIEW OF THIS, IT I S CONCLUDED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM OF NO N-RESIDENT STATUS. THEREFORE, THE ASSESSEE CLAIM IS REJECTED A ND HE IS TREATED AS RESIDENT AND ORDINARILY RESIDENT FOR THE PURPOSE OF THIS AY. THUS IN BRIEF (I) AO ANALYSED THE PROVISIONS OF SEC TION 6(1)(C) AND HELD THAT IF A PERSON STAYED IN INDIA F OR MORE THAN 182 DAYS OR IN PRECEDING YEARS THE PERSON IS IN IND IA FOR MORE THAN 365 DAYS AND IN THAT YEAR FOR 60 DAYS OR MORE THE INDIV IDUAL WILL BE TREATED AS RESIDENT. THE AO DID NOT HAVE COMPLETE DETAILS IN RESPECT OF THE PERIOD OF STAY FOR FINANCIAL YEAR 2002-03, 2001-02, 2000-2001 AND 1999- 2000 AND HENCE NRI STATUS CANNOT BE GRANTED. THE AO ALSO INVITED INTENTION OF THE APPELLANT TO E XPLANATION B OF SECTION 6(L)(C). THE AO ALSO HELD THAT THE WORD VISITOR MEANS WHO CO MES AND GOES OR MEETS A PERSON BUT A PERSON WHO HAS A RESIDENCE AND PLACE OF WORK IN INDIA CANNOT BE TREATED AS A VISITOR. THE A PPELLANT HAS MR. BINOD KUMAR SINGH 24 RESIDENCE, PLACE OF WORK, PARENTS STAY IN INDIA AND HAVE NOT SUBMITTED ANY EVIDENCE TO PROVE THAT WHY HE IS BEIN G OUTSIDE IN INDIA AND COMES ON A VISIT TO INDIA. HOWEVER, AO HE LD THAT THE RELAXATION IS AVAILABLE TO A PERSON WHO IS OUTSIDE INDIA AND IS NOT AVAILABLE TO PERSON WHO HAS PERMANENT RESIDENCE IN INDIA AND ALSO PLACE OF WORK. THE VISA OF THE APPELLANT H AS CAPTIONED A 'RESIDENCE PERMIT' AND IS AN INVESTOR VISA READ AS TIER I (INVESTOR) MIGRANT. THE DATE OF ISSUE OF THE VISA I S MARCH 18, 2009. THE ASSESSEE HAS FURNISHED COPIES OF CERTAIN DOCUME NTS TO SUPPORT HIS CLAIM THAT HE WAS DOMICILED IN UK DURIN G THE FINANCIAL YEAR 2002-03 TO 2008-09. THE DOCUMENTS RELATE TO SC HOOL CERTIFICATE OF HIS DAUGHTER, SON, ELECTRICITY BILLS , CLUB CARD AND PROPERTY DOCUMENTS. THESE DO NOT ESTABLISH THE CLAI M OF NRI STATUS. THAT THE FACTS AS AFORESAID WERE RE-AFFIRMED. IT WAS STATED THAT ONLY BECAUSE INFORMATION IS NOT AVAILABLE IN RESPECT TO AY 2000-2001 TO 2002-03 (INFORMATION FOR 2003 - 04 HAS BEEN FURNISHED), IT CANNOT BE HELD THAT APPELLA NT IS A RESIDENT. THE APPELLANT HAD FILED ITS RETURNS OF INCOME FOR A Y 2000-01, 2001-02 & 2002-03 U/S 139 IN STATUS OF NON-RESIDENT WHICH HAVE BEEN ACCEPTED AND STAND ASSESSED AS SUCH. THE ATTENTION WAS DRAWN TO THE FACT THAT SECTION 6 (1)(C) HAS CUMULATIVE CONDITION WITH RESPECT TO PRESENCE IN IN DIA IN 365 DAYS IN FOUR PRECEDING YEARS AND 60 DAYS OR MORE IN THAT YEAR. IN THE CASE OF AN INDIAN CITIZEN / PIO THE PERIOD O F 60 DAYS IS SUBSTITUTED BY 182 DAYS. THUS, IN CASE THE PERIOD OF STAY IS LESS THAN THE S TIPULATED NO. OF DAYS, THE OTHER CONDITION BECOMES IRRELEVANT AS BOT H THE CONDITIONS HAVE TO BE SATISFIED. THE AO HAS WHILE INTERPRETING THE PROVISIONS OF SEC TION 6(1)(A)/6(1)(C) READ WITH EXPLANATION B HAS ADMITTE D THAT THE RELAXATION OF EXTENDED TIME OF 182 DAYS IS AVAILABL E TO A CITIZEN OF INDIA / PERSON OF INDIAN ORIGIN PROVIDED THE SAID P ERSON IS RESIDING ABROAD AND COMES ON A VISIT TO INDIA. HE H AS DESPITE FURNISHING EVIDENCE OF RESIDING ABROAD SINCE OVER 2 0 YEARS INCLUDING EVIDENCE THAT EVERY TRAVEL AFTER 2002 COM MENCED AND ENDED IN UK, FOREIGN BANK ACCOUNTS SPECIFYING T HE ADDRESS ON WHICH KYC WAS DONE, BORROWING ABROAD, EARNING ABROA D, CONCLUDED THAT IN THE ABSENCE OF SATISFACTORY PROOF / EVIDENCE OF THE DOMICILE OF THE APPELLANT BEING ABROAD HAVIN G BEEN MR. BINOD KUMAR SINGH 25 ESTABLISHED, THE EXPLANATION B IS NOT APPLICABLE. NOW, HAVING GIVEN A FINDING THAT THE PERIOD OF STAY OF THE APPELLANT DURING AY 2007-08 TO 2009-10 IS LESS THAN 182 DAYS IN EACH OF THE YEARS , THE ISSUE FOR ADJUDICATION ON THE BASIS OF THE AFORESAID ARE:- WHETHER THE PROVISIONS OF EXPLANATION (B) OF SECTIO N 6(1)(C) APPLICABLE IN THE CASE OF THE ASSESSEE FOR THE A.Y. 'S 2007-08 TO 2009-10 AND CAN IT BE SAID THAT THE ASSESSEE IS ENT ITLED, ON MERITS, FOR THE BENEFIT OF 182 DAYS AS STIPULATED IN THE SA ID EXPLANATION. WHETHER DETERMINATION OF STATUS CAN BE CONSIDERED I N RE- ASSESSMENT U/S 153A, IN ABSENCE OF ANY INCRIMINATIN G MATERIAL FOUND DURING COURSE OF SEARCH WHICH WOULD WARRANT A CHANGE THEREOF? SECTION 6(1) IS REPRODUCED AS UNDER: AN INDIVIDUAL IS SAID TO BE RESIDENT IN INDIA IN AN Y PREVIOUS YEAR, IF HE:- IS IN INDIA IN THAT YEAR FOR A PERIOD OR PERIODS AM OUNTING IN ALL TO ONE HUNDRED AND EIGHTY TWO DAYS OR MORE; OR HAVING WITHIN THE FOUR YEARS PRECEDING THAT YEAR BE EN IN INDIA FOR A PERIOD OF PERIODS AMOUNTING IN ALL TO THREE HUNDR ED AND SIXTY FIVE DAYS OR MORE, IS IN INDIA FOR A PERIOD OR PERI ODS AMOUNTING IN ALL SIXTY DAYS OR MORE IN THAT YEAR. EXPLANATION-IN THE CASE OF AN INDIVIDUAL:- BEING A CITIZEN OF INDIA, WHO LEAVES INDIA IN ANY P REVIOUS YEAR [AS A MEMBER OF THE CREW OF INDIA SHIP ..........I FOR TH E PURPOSE OF EMPLOYMENT OUTSIDE INDIA, THE PROVISIONS OF SUB- E (C) SHALL APPLY IN RELATION TO THAT YEAR AS IF FOR THE WORDS SIXTY DAYS THE WORDS ONE RED EIGHTY TWO DAYS HAD BEEN SUBSTITUTED BEING A CITIZEN OF INDIA OR A PERSON OF INDIAN ORIG IN WITHIN THE MEANING OF EXPLANATION TO E (E) OF SECTION 115C, WH O, BEING OUTSIDE INDIA, COMES ON A VISIT TO INDIA IN ANY PRE VIOUS YEAR, THE PROVISION OF SUB-CLAUSE (C) SHALL APPLY IN RELA TION TO THAT YEAR AS IF FOR THE WORDS 'SIXTY DAYS' OCCURRING THEREIN, THE WORDS ONE HUNDRED AND EIGHTY TWO DAYS HAD BEEN SUBSTITUTED'. IN ACCORDANCE WITH THE PROVISION AFORESAID THE RESI DENTIAL STATUS BASED ON THE PHYSICAL PRESENCE IN INDIA IS D IVIDED INTO TWO MR. BINOD KUMAR SINGH 26 CATEGORIES:- THE FIRST YEAR WHEN AN INDIA CITIZEN GOES ABROAD TO TAKE UP EMPLOYMENT. THEREAFTER HAVING TAKEN UP EMPLOYMENT ABROAD / SETT LED THEREIN COMES TO INDIA FROM TIME TO TIME. IN THE CASE OF PERSONS FALLING UNDER CATEGORY (A) A BOVE THE RESIDENTIAL STATUS IS GOVERNED BY SECTION 6(L)(C) R EAD WITH EXPLANATION (A) I.E. IF AN ASSESSEE IN THE FIRST YE AR OF DEPARTURE FROM INDIA LEAVES INDIA WITH THE PURPOSE OF EMPLOYM ENT, THEN THE STATUS IS TO BE DETERMINED UNDER CLAUSE (C) BY COMP UTING THE FOLLOWING:- BEEN IN INDIA FOR 365 DAYS OR MORE IN FOUR YEARS PRECEDING THE YEAR OF DEPARTURE OR IN INDIA FOR A PERIOD OF 182 DAYS O R MORE IN CASE OF PERSONS FALLING UNDER CATEGORY (B), THE EXPLANATION (B) TO SECTION 6(L)(C) IS APPLICABLE AFTER AN ASSES SEE HAVING BECOME NON-RESIDENT IN AN EARLIER YEAR RESIDES / SE TTLED ABROAD. THUS, THE DETERMINATION OF RESIDENTIAL STATUS OF AN INDIVIDUAL UNDER SECTION 6(1) MAY BE SUMMARIZED AS FOLLOWS:- IF INDIVIDUAL HAS STAYED IN INDIA FOR A PERIOD OF 1 82 DAYS OR MORE IN ANY PREVIOUS YEAR HE IS A RESIDENT IN INDIA IN T HAT PREVIOUS YEAR OR IF HE HAS STAYED IN INDIA FOR A PERIOD OF 60 DAYS O R MORE DURING ANY PREVIOUS YEAR AND 365 DAYS OR MORE DURING THE FOUR PRECEDING PREVIOUS YEARS, HE IS A RESIDENT IN INDIA IN THAT P REVIOUS YEAR. IF BOTH THE ABOVE TWO CONDITIONS ARE NOT SATISFIED, HE IS A NON- RESIDENT IN INDIA IN THAT PREVIOUS YEAR. EXCEPTIONS TO SECTION 6(1) AN INDIVIDUAL, WHO IS AN INDIAN CITIZEN, LEAVES IND IA FOR THE PURPOSES OF EMPLOYMENT OUTSIDE INDIA; OR AN INDIVIDUAL WHO IS AN INDIAN CITIZEN LEAVES INDIA AS A CREW MEMBER ON AN INDIAN SHIP; OR AN INDIVIDUAL, WHO IS AN INDIAN CITIZEN OR PERSON O F INDIAN ORIGIN, COMES ON A VISIT TO INDIA. IN OTHER WORDS, IF ANY OF THE ABOVE THREE CATEGORIE S OF INDIVIDUALS MR. BINOD KUMAR SINGH 27 STAY IN INDIA FOR LESS THAN 182 DAYS IN THE RELEVAN T PREVIOUS YEAR HE SHALL BE REGARDED AS A NON-RESIDENT IN INDIA IN THAT PREVIOUS YEAR AND THE TEST OF STAY IN INDIA FOR 365 DAYS OR MORE IN THE FOUR PRECEDING PREVIOUS YEAR AS LAID DOWN IN SECTION 6(L )(C)SHALL NOT APPLY TO HIM. THE SPECIAL BENEFIT OF EXTENDED STAY UPTO 182 DAYS IS GIVEN FOR ALL INDIAN CITIZENS/PIO, WHEREAS ALL NON-INDIAN CITIZEN S ARE GOVERNED BY THE RESTRICTED NUMBER OF DAYS AS SPECIFIED IN 6( 1)(A)-182 DAYS OR 6(L)(C)-365 DAYS IN FOUR PRECEDING YEARS AND 60 DAYS IN THAT YEAR. THE LEGISLATIVE AMENDMENTS TO SECTION 6 HAVE BEEN M ADE BY THE DIRECT TAX LAWS (SECOND AMENDMENT) ACT, 1989 - NEW EXPLANATION HAS BEEN SUBSTITUTED IN SECTION 6(1 )(C) FOR THE THEN EXISTING EXPLANATION, WITH EFFECT FROM 1ST APRIL, 1990, I.E. FOR AND FROM ASSESSMENT YEAR 1990-91. ON A COMPARIS ON OF THE TWO EXPLANATIONS, IT MAY BE SEEN THAT CLAUSE (A ) OF THE NEW EXPLANATION IS, IN SUBSTANCE, THE SAME AS CLAUSE (A ) OF THE THEN EXISTING EXPLANATION. CLAUSE (B) OF THE NEW EXPLANA TION ALSO TAKES WITHIN ITS AMBIT A PERSON OF INDIAN ORIGIN WITHIN T HE MEANING OF EXPLANATION TO SECTION 115C(E). THE SCOPE AND EFFECT OF THESE AMENDMENTS HAVE ALSO BEEN ELABORATED IN THE FOLLOWING PORTION OF THE DEPARTME NTAL CIRCULAR NO. 554 DATED 13.02.1990, AS UNDER:- 'LIBERALIZATION OF THE CRITERION FOR DETERMINING TH E RESIDENTIAL STATUS IN THE CASE OF NON-RESIDENT INDIANS - UNDER THE PROVISIONS OF THE INCOME-TAX ACT, 1961, A N INDIVIDUAL WHO IS RESIDENT IN INDIA IS TAXABLE ON HIS GLOBAL I NCOME, I.E. IN RESPECT OF INCOME ACCRUING OR ARISING IN INDIA AS WELL AS OUTSIDE INDIA. PRIOR TO THE AMENDMENT BY THE SECOND AMENDIN G ACT, 1989, A CITIZEN. OF INDIA WHO WAS OUTSIDE INDIA AND CAME TO INDIA ON A VISIT IN ANY PREVIOUS YEAR WAS HELD TO BE RESI DENT IF HE HAD BEEN IN INDIA FOR A PERIOD OR PERIODS AMOUNTING IN ALL TO 365 DAYS OR MORE IN THE FOUR YEARS PRECEDING THAT YEAR AND W AS IN INDIA FOR A PERIOD OF 90 DAYS OR MORE IN THAT YEAR. IN THE CASE OF INDIVIDUALS WHO ARE NOT CITIZENS OF INDIA, THE PERIOD OF 90 DAYS OR MORE IS RESTRICTED TO 60 DAYS OR MORE . THE NON-RESIDENT INDIANS HAD BEEN REPRESENTING THAT THE PERIOD OF 90 DAYS OR 60 DAYS WAS TOO SHORT, ESPECIALLY FOR THOSE WHO HAD TO SUPERVISE THEIR INVESTMENTS IN INDIA. MR. BINOD KUMAR SINGH 28 IN ORDER TO ENABLE THE NON-RESIDENT INDIANS TO STAY IN INDIA FOR A LONGER PERIOD FOR LOOKING AFTER THEIR INVESTMENTS W ITHOUT LOSING THEIR 'NON-RESIDENT' STATUS, CLAUSE (B) OF T HE EXPLANATION TO CLAUSE (C) OF SUB-SECTION (1) OF SEC TION 6 HAS BEEN AMENDED. THE PERIOD OF 90 DAYS PROVIDED THERE UNDER HAS BEEN INCREASED TO 150 DAYS. THE AMENDED PROVISION WILL APPLY NOT ONLY TO A CITIZEN OF INDIA BUT ALSO TO A PERSON OF INDIAN ORI GIN WITHIN THE MEANING OF EXPLANATION TO CLAUSE (E) OF SECTION 115 C OF THE INCOME-TAX ACT. THE EFFECT OF THE AMENDED PROVISION IS THAT, SUBJECT TO THE OTHER CONDITIONS PRESCRIBED IN SECTI ON 6 OF THE INCOME-TAX ACT, SUCH PERSON CAN STAY IN INDIA ON A VISIT FOR 149 DAYS AS AGAINST 89 DAYS EARLIER IN THE CASE OF CITI ZENS OF INDIA AND 59 DAYS EARLIER IN THE CASE OF THOSE WHO WERE NOT C ITIZENS OF INDIA DURING A PREVIOUS YEAR WITHOUT LOSING THEIR 'NON-RE SIDENT' STATUS. THEREAFTER, AMENDMENT WAS AGAIN MADE BY THE FINANCE ACT, 1994 AND WERE CLARIFIED IN CIRCULAR NO. 684 DATED 1 0.06.1994 RELEVANT EXTRACT IS REPRODUCED HEREUNDER:- 'SUGGESTIONS HAD BEEN RECEIVED TO THE EFFECT THAT T HE AFORESAID PERIOD OF ONE HUNDRED AND FIFTY DAYS SHOULD BE INCR EASED TO ONE HUNDRED AND EIGHTY-TWO DAYS. THIS IS BECAUSE THE NO N-RESIDENT INDIANS, WHO HAVE MADE INVESTMENTS IN INDIA, FIND I T NECESSARY TO VISIT INDIA FREQUENTLY AND STAY HERE F OR THE PROPER SUPERVISION AND CONTROL OF THEIR INVESTMENTS. THE F INANCE ACT, THEREFORE, HAS AMENDED CLAUSE (B) OF THE EXPLANATIO N TO SECTION 6(1)(C) OF THE INCOME TAX ACT, IN ORDER TO EXTEND T HE PERIOD OF STAY IN INDIA IN THE CASE OF THE AFORESAID INDIVIDU ALS FROM ONE HUNDRED AND FIFTY DAYS TO ONE HUNDRED AND EIGHTY-TW O DAYS, FOR BEING TREATED AS RESIDENT IN INDIA, IN THE PREVIOUS YEAR IN WHICH THEY VISIT INDIA THUS, SUCH NON-RESIDENT INDIANS WO ULD NOT LOSE THEIR 'NON-RESIDENT' STATUS IF THEY STAY IN INDIA, DURING THEIR VISITS, UPTO ONE HUNDRED AND EIGHTY-ONE DAYS IN A PREVIOUS YEAR.' THE JUDICIAL AUTHORITIES HAVE HAD OCCASION TO CONSI DER THE IMPLICATIONS OF SECTION 6 OF THE INCOME TAX ACT REA D WITH VARIOUS EXPLANATIONS WHICH ARE AS UNDER: CIT VS AVTAR SINGH WADHWAN, 247 ITR 260 (BORN.) 'SECTION 6 INDICATES THE MEANING OF RESIDENCE IN IN DIA. SECTION 6 LAYS DOWN THAT FOR THE PURPOSE OF THE INCOME TAX AC T AN INDIVIDUAL IS SAID TO BE RESIDENT IN INDIA IF HE IS IN INDIA FOR A MR. BINOD KUMAR SINGH 29 PRESCRIBED PERIOD. THEREFORE SECTION 6 EMPHASIS PHY SICAL PRESENCE OF THE PERSON IN INDIA'. ITO V/S. DR. M.P. KONAN HALLI 55 LTD 266 CLAUSE (A) OF EXPLANATION TO SECTION 6(1) IS INTEND ED TO COVER CASES OF INDIANS WHO GO OUT OF INDIA FOR SECURING E MPLOYMENT OR BEING EMPLOYED OUTSIDE INDIA DURING THE RELEVANT PR EVIOUS YEAR ONLY. IF SOMEBODY IS ALREADY SETTLED ABROAD, HIS CA SE IS NOT COVERED BY CLAUSE (A) BUT FALLS WITHIN PURVIEW OF CLAUSE (B ). SHRIANURAG CHAUDHARY V/S. CIT(AAR) 839 / 2009 DATED 11.02.2010 SECTION 6 SUB-SECTION (1), WHICH DETERMINES THE RES IDENTIAL STATUS OF AN INDIVIDUAL, REQUIRES THAT EITHER THE APPLICAN T SHOULD HAVE BEEN IN INDIA FOR 182 DAYS OR MORE IN FOUR PRECEDIN G YEARS [VIDE CLAUSE (C)]. THE EXPLANATION TO THIS SUB-SECTION PR OVIDES THAT A CITIZEN OF INDIA WHO LEAVES INDIA FOR THE PURPOSE O F EMPLOYMENT OUTSIDE INDIA CAN BE CONSIDERED AS RESIDENT OF INDI A, IF HE HAS BEEN IN INDIA FOR 182 DAYS OR MORE EVEN THOUGH HE M AY HAVE BEEN IN INDIA FOR THAN 365 DAYS IN 4 PRECEDING YEAR S. THE NET EFFECT OF SECTION 6(1) READ WITH THE EXPLAN ATION IS THAT FOR AN INDIVIDUAL WHO HAS LEFT INDIA FOR EMPLOYMENT OUT SIDE INDIA HE SHOULD BE TREATED AS RESIDENT OF INDIA ONLY IF HE W AS IN INDIA DURING THE RELEVANT PERIOD / YEAR FOR 182 DAYS OR M ORE. IN OTHER WORDS, IF AN INDIVIDUAL HAS SPENT LESS THA N 182 DAYS IN INDIA DURING A PREVIOUS YEAR AND WAS OUTSIDE INDIA FOR THE PURPOSES OF EMPLOYMENT, THEN REGARDLESS OF HIS BEIN G IN INDIA FOR 365 DAYS OR MORE DURING 4 PRECEDING PREVIOUS YEARS, HE CANNOT BE TREATED AS A RESIDENT OF INDIA. VIJAY MALLYA V/S, ACIT 263 ITR 41 (CAL.) THE LORDSHIPS WHILE ANALYZING THE PROVISIONS OF SEC TION 6(1')(C) READ WITH BOTH THE EXPLANATION (A) & (B) H AVE HELD 'CLAUSE (A) OF EXPLANATION COVERS CASES WHERE A CIT IZEN OF INDIA LEAVES INDIA FOR THE PURPOSE OF EMPLOYMENT OUTSIDE INDIA, THEN HE WOULD BE A NONRESIDENT, IF HE IS A INDIA FOR LESS T HAN 182 DAYS. NOW HAVING BEEN EMPLOYED OUTSIDE INDIA, HE COMES TO INDIA FOR A VISIT, THE EXPLANATION (B) WOULD BE ATTRACTED. V. K. RATTI VS. CIT 299 1TR295 (P&H) THE LORDSHIP HAS HELD THAT PHYSICAL PRESENCE IN IND IA HAS BEEN INDICATED TO BE THE BASIS FOR DETERMINATION OF RESI DENCE. MR. BINOD KUMAR SINGH 30 CIT VS RAMASWAMY (K.S.)(1980) 122 ITR 217(SC) SECTION 6(1) APPLIES TO ALL INDIVIDUALS: SECTION 6(1) LAYS DOWN A TECHNICAL TEST OF TERRITORIAL CONNECTION AMOUNTIN G TO RESIDENCE TO ALL INDIVIDUALS - FOREIGNERS AS WELL AS INDIANS INCLUDING HINDUS, CHRISTIANS, MUSLIMS, PARSIS AND OTHER IRRE SPECTIVE OF THE PERSONAL LAW GOVERNING THEM. CIT V DHOTE (B.K.) (1967) 66 ITR 457 (SC) ALSO SEE MOOSA S. MADHT & AZAM S. MADHA V. CIT 89 ITR 65 (SC). ONUS TO PROVE STAY IN INDIA WITH DEPARTMENT: THE ON US OF PROVING THAT THE ASSESSEE WAS IN INDIA DURING THE FOUR YEAR S PRECEDING THE PREVIOUS YEAR FOR A PERIOD OR PERIODS IN THE AG GREGATE OF NOT LESS THAN 365 DAYS, AND WAS IN INDIA FOR AT LEAST 60 DAYS DURING THE PREVIOUS YEAR, LIES ON THE DEPARTMENT. PRADIP J MEHTA VS CIT (2008) 300 ITR 231(SC) INTERPRETATION OF TAXING STATUTES - WHERE 2 INTERPR ETATIONS POSSIBLE- COURT WILL ADOPT THAT IN FAVOUR OF TAXPAYER. DHRUV CHOUDHRIE, APPEAL NO. 90/0809. A. Y. 2005-06 THE COMMISSIONER OF INCOME TAX (APPEALS) XXIX, NEW DELHI VIDE ORDER DATED 03.07.2009 ON FACTS WHICH ARE SIMI LAR TO THAT OF THE APPELLANT HAS AFTER DUE ANALYSIS OF THE PROVISI ONS OF SECTION 6 OF THE INCOME TAX ACT RECORDED A FINDING THAT RESIDENT IAL STATUS IS DETERMINED ON THE BASIS OF PHYSICAL PRESENCE OF AN ASSESSEE IN INDIA. SUDHIR SAREEN APPEAL NO. 490/09-10 CIT (A)-1, NEW D ELHI. ORDER DATED 31.03.2011 HELD, ON IDENTICAL FACTS 'PARA 1.9' THE LEGISLATURE HAS BEEN GRANTING THE BENEFIT OF EXTENDED STAY TO INDIAN CIT IZEN / PLO'S ..........PERIOD HAS BEEN EXTENDED FROM 60 DAYS TO 181 DAYS WITH THE PRINCIPAL OBJECTIVE OF GRANTING MORE TIME TO STAY DURING EACH OF THE FREQUENT VISITS TO INDIA TO INDIAN CITI ZENS / PIO RESIDING ABROAD TO MANAGE THEIR AFFAIRS IN INDIA. THIS HAS B EEN CLEARLY BROUGHT OUT BY THE VARIOUS CIRCULARS BY THE CENTRAL BOARD OF DIRECT TAXES AT EACH RELEVANT TIME. IT IS ALSO SETTLED LAW THAT THE CIRCULARS OF THE CBDT ARE BINDING ON THE REVENUE OFFICERS. SI MILARLY, IN CASE A PROVISION OF LAW IS POSSIBLE OF TWO OPINIONS, THE I NTERPRETATION BENEFICIAL TO THE ASSESSEE IS TO BE FOLLOWED. PARA 1.9.1 'HELD THAT APPELLANT IS NOT A RESIDENT O F INDIA IN ACCORDANCE WITH SECTION 6 (1) (C) READ WITH EXPLANA TION B EVEN MR. BINOD KUMAR SINGH 31 THOUGH HIS PERIOD OF STAY FOR EACH OF THE FOUR PREC EDING YEARS EXCEEDS 365 DAYS YET IN THAT PREVIOUS YEAR HIS PERIOD OF STAY I N INDIA IS LESS THAN 181 DAYS AND AS SUCH THE APPELLA NT IS A NON- RESIDENT.' THE AO HAS MISINTERPRETED THE PROVISIONS OF SECTION 6(1) OF THE INCOME TAX ACT, BY RECORDING A FINDING THAT THE ASS ESSEE IS NOT DOMICILED IN U.K. AND NO EVIDENCE THEREOF HAS BEEN ADDUCED. IT HAS BEEN BROUGHT ON RECORD THAT THE APPELLANT IS (A) RE SIDING IN U. K. IN RESIDENTIAL HOUSE OWNED BY HIM (B) THE CHILDREN ARE UNDERGOING EDUCATION IN U.K. (C) THE PERIOD OF STAY IN U.K. CA N BE CONFIRMED FROM THE PASSPORTS, WHICH WOULD INDICATE HE IS DOMI CILED IN U.K. (D) THE RESIDENT PERMIT GRANTED BY U.K. IS ONLY ISSUED AFTER A PERSON IS DOMICILED IN U.K. BEYOND A CERTAIN PERIOD OF TIME ( E) THE BANKING ACCOUNTS IN THE NAME OF THE ASSESSEE WERE OPENED AF TER DUE VERIFICATION, COMPLIANCE WITH KYC NORMS AND ALL CLA SSIFIED AS NON-RESIDENT, BEARING THE PERMANENT ADDRESS OF UK ( F) ASSESSEE HAS FILED TAX RETURNS IN UK FOR 2007-08 TO 2009-10. FURTHER THE PROVISIONS OF SECTION 6 FOR DETERMINING THE RESIDENTIAL STATUS ARE BASED ON PH Y SICAL PRESENCE IN INDIA FOR DETERMINING THE PERIOD OF STAY IN INDIA. IN CASE AN ASSESSEE SATISFIES THE SAME OR OTHERWISE THE STATUS IS DETERMINED ACCO RDINGLY. THE APPELLANT STATES THAT, CIRCULAR NO.684 OF 1994 ISSUED BY THE CENTRAL BOARD, BEING BINDING ON THE AO, THE AO OUGH T NOT TO HAVE IGNORED THE SAME TO CONCLUDE ON ALLEGED GROUND THAT THE APPELLANT HAVING FAILED TO ADDUCE EVIDENCE, WHICH WAS ALREADY SUBMITTED TO THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS, FOR HER CLAIM AS NON RESIDENT. THE SUPREME COURT IN THE CASE OF KESHAVJI RAVJI & C O. REPORTED IN 183 ITR PG. 1 AT PAGE 17 HAS OBSERVED AS UNDER; 'HOWEVER, CIRCULARS BENEFICIAL TO THE ASSESSEES AND WHICH TONE DOWN THE RIGOUR OF THE LAW ISSUED IN EXERCISE OF THE STA TUTORY POWER UNDER SECTION 119 OF THE ACT OR UNDER CORRESPONDING PROVI SIONS OF THE PREDECESSOR ACT ARE BINDING ON THE AUTHORITIES IN T HE ADMINISTRATION OF THE ACT.' NAVNIT LAL C. JAVERI 56 ITR 198 (SC), NAVNIT LAL AMBA LAL VS. CIT 105 ITR 735 (BORN.), DATTATRAYA GOPAL SHETTE VS. CIT 150 ITR 460 (BORN.), CIT V. T.V. RAM ANAIAB & SONS (1986) 157 ITR 300, 307 (A.P) CIRCULARS ARE BINDING ON ALL OFFICERS AND PERSONS E MPLOYED IN THE EXECUTION OF THE INCOME TAX ACT. EVEN IF THE CIRCUL AR MAY MR. BINOD KUMAR SINGH 32 AMOUNT TO A DEVIATION OF A POINT TO LAW CONFERRING BENEFIT TO A ASSESSEE THE SAME IS BINDING ON THE DEPARTMENT. RELYING ON THE AFORESAID JUDGMENTS, THE APPELLANT S UBMITS THAT THE ASSESSING OFFICER ERRED IN REJECTING THE APPELLANT' S CLAIM BASED ON THE CIRCULAR NO. 684 OF 1994 EXPLAINING SECTION 6(1 )(C) R.W. EXPLANATION TO CLAUSE (E) TO SECTION 115C OF THE IN COME TAX ACT, 1961. THE STATUS OF THE APPELLANT, THEREFORE, SHOUL D HAVE BEEN CONSIDERED AS NON RESIDENT. THE DECISION OF THE ASS ESSING OFFICER IN THIS RESPECT MAY BE ANNULLED. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE AO. THE GIST OF THE FINDING OF THE AO IS AS UNDER: CLAUSE (B) OF EXPLANATION TO SECTION 6(1) (C) IS NO T APPLICABLE TO THE APPELLAN T. THE COMPLETE DETAILS OF HIS STAY IN INDIA FOR 4 YEA RS PRIOR TO ASSESSMENT YEAR 2003-04 WERE NOT FURNISHED. NO EVID ENCE THAT THE APPELLANT IS DOMICILED IN UK. THEREFORE, THE AP PELLANT IS RESIDENT AND ORDINARILY RESIDENT IN INDIA AND LIABL E TO TAX THE GLOBAL INCOME OF THE APPELLANT. THE PERIOD OF STAY OF THE APPLICANT IN INDIA FOR THE A.Y.2007-08 TO 2009-10 A RE ADMITTEDLY LESS THAN 182 DAYS IN EACH OF THE YEARS. THAT THE APPELLANT IS THE HOLDER OF INDIAN PASSPOR TS DETAILED AS UNDER: SL. NO. PASSPORT NO. PLACE OF ISSUE VALIDITY 1 R-691005 UKRAINE/KIEV 30/06/94 -31/08/98 2 U-925810 UKRAINE/KIEV ADDITIONAL BOOKLET TO PASSPORTNO.R-691005 ISSUED ON 04.08.1997 3 A-1280977 UKRAINE/KYIV 19/06/2001-21/01/08 4 Z-1023527 UKRAINE/KYIV 14/05/2003-21/01/08 5 Z-1023582 UKRAINE/KYIV 23/08/2006-10/08/16 AN EMBASSY IS A DIPLOMATIC OFFICE ESTABLISHED IN ON E COUNTRY BY ANOTHER COUNTRY WITH WHICH DIPLOMATIC RELATIONS HAV E BEEN ESTABLISHED. A CONSULATE IS THE REGIONAL BRANCH OF A COUNTRYS MAIN EMBASSY. TECHNICALLY THE EMBASSY BUILDING AND ITS PROPERTY ARE PART OF THE EMBASSY'S COUNTRY. MR. BINOD KUMAR SINGH 33 THE FOLLOWING SERVICES ARE PROVIDED BY THE INDIAN E MBASSY ABROAD RELATING TO THE PASSPORT. ISSUE EMERGENCY PASSPORT IN CASE YOU LOSE YOUR PASS PORT RENEWAL OF PASSPORT, ISSUING A NEW/ DUPLICATE PASSP ORT VALIDITY EXTENSION OF CURRENT PASSPORT, ADDITIONAL BOOKLET, GETTING A PASSPORT FOR A MINOR. HENCE, THE ISSUE OF INDIAN PASSPORT BY THE UKRAINE AND LONDON EMBASSY TO THE APPELLANT IS NOT WRONG AND IN FACT S HOWS THAT THE APPELLANT AT THAT POINT OF TIME WAS IN THAT COUNTRY . THE CONSULATE GENERAL OF INDIA, BIRMINGHAM LOCATED AT 20 AUGUSTA STREET, JEWELLERY QUARTER, HOCKLEY BIRMINGH AM B18 61L HAS THE FOLLOWING GUIDELINES FOR THE ISSUE OF N EW PASSPORTS: INDIAN PASSPORTS ARE NOW NORMALLY ISSUED WITH A VAL IDITY OF 10 YEARS (EXCEPT III THE CASE OF CHILDREN UP TO THE AG E OF 15 YEARS (PLEASE SEE RELEVANT PARAGRAPH BELOW). THEIR RENEWA L THEREAFTER INVOLVES THE ISSUE OF A NEW PASSPORT. THIS SECTION ALSO APPLIES TO PERSONS REQUIRING ADDITIONAL BOOKLETS WHERE THEIR P ASSPORT HAS RUN OUT OF AVAILABLE PAGES FOR VISAS, ETC. A NEW PASSPORT CAN BE ISSUED ON FINAL EXPIRY OR UP TO ONE YEAR BEFORE FINAL EXPIRY OF ANY PASSPORT ISSUED FOR 10 Y EARS. FOLLOWING ARE REQUIRED:- APPLICATION FORM DULY FILLED IN (CLICK HERE TO DOWN LOAD FORM) ORIGINAL PASSPORT (CURRENT/ EXPIRED) INCLUDING ANY ADDITIONAL BOOKLETS ISSUED LATEST IDENTICAL COLOURED PASSPORT SIZE PHOTOGRAPHS (FOUR). THERE IS A COIN-OPERATED PHOTO ME MACHINE INSTALLED IN TH E PUBLIC HALL OF THE CONSULATE BUILDING (1ST FLOOR) WHICH GIVES PHOT OGRAPHS OF THE REQUIRED SIZE AT A CHARGE OF 3.50. THIS FACILITY I S OPEN TO PUBLIC ON ALL WORKING DAYS OF THE CONSULATE DURING THE PUBLIC HOURS. SELF-ADDRESSED SPECIAL DELIVERY ENVELOPE (IN CASE R ETURN OF PASSPORT IS DESIRED BY POST) FEES THE ABOVE CLEARLY SHOWS THAT PASSPORT COULD BE ISSU ED TO AN INDIAN NATIONAL BY INDIAN EMBASSY IN ANY COUNTRY. A CCORDINGLY, THE APPELLANT WAS ISSUED SUCH PASSPORT BY INDIAN EM BASSY ' IN KYIV, UKRAINE AND FROM LONDON. THIS SHOWS THAT THE APPELLANT MR. BINOD KUMAR SINGH 34 WAS NOT IN INDIA AT THAT POINT OF TIME AND WAS IN U KRAINE AND UNITED KINGDOM. THE LEARNED COUNSEL IN ORDER TO ESTABLISH THAT THE APPELLANT WAS SETTLED ABROAD HAS FILED AND PLEADED:- THAT THE APPELLANT WAS INITIALLY RESIDING IN UKRAIN E IN A PROPERTY PURCHASED BY HIM IN 1975, EVIDENCE OF PURCHASE OF PROPERTY FLAT NO. 44, HOUSE NO. N-6A, STARONAVODNYTSKAYA STREET, APT. 44, KYIV TILL SHIFTING TO UK IN 2002-2003. THE MINOR DAUGHTER WAS UNDERGOING EDUCATION AT BRIT ISH INTERNATIONAL SCHOOL KYIV WHO HAS CONFIRMED THAT TR ISHA SINGH D/O OF ASSESSEE WAS IN THEIR SCHOOL FROM SEPTEMBER, 1996 TO JULY 2002 (DEPARTURE FROM UKRAINE) THEREAFTER THE FAMILY SHIFTED TO UK AND THE DAUGHTE R WAS ADMITTED IN BRENTWOOD SCHOOL, BRENTWOOD ESSEX, U.K. ON 1ST S EPTEMBER, 2002 AND COMPLETED HER SCHOOL IN 2007. COPIES OF BI LLS OF GAS, CREDIT CARDS, TELEPHONE ETC IN RESPECT OF UK EVIDENCE OF PURCHASING PROPERTY AT CIVIC BAY, UK IN 2003 WHICH WAS THE RESIDENTIAL PREMISES AND THEREAFTER S HIFTED TO A NEW HOUSE PURCHASED BY HIM ALL OVERSEAS TRAVEL COMMENCED FROM UK AND TERMINATE D IN UK IN EVIDENCE THAT HE WAS RESIDING IN UK AND ALWAYS RETU RNED TO HIS HOMETOWN. THE ASSESSEE IS SUBJECTED TO TAX IN UK FOR THE YEAR S 2007-08 TO 2009-10. COPIES OF RETURNS FILED. THE ASSESSEE WAS ASSESSED TO TAX IN INDIA FOR THE A .Y. 2005-06 IN A SCRUTINY ASSESSMENT IN OF NON-RESIDENT AND NO EVI DENCE HAS BEEN FOUND WHICH WOULD SUGGEST THAT THE -'SAID STAT US WAS DETERMINED FRAUDULENTLY. THE BANKING ACCOUNTS IN INDIA ARE ALL NON RESIDENT EXTERNAL ACCOUNTS BEARING ADDRESSES ABROAD. THE SAID ACCOUNT S WERE OPENED AFTER DUE DILIGENCE OF 'KNOW YOUR CUSTOMER ( K)' NORMS LAID DOWN BY RESERVE BANK OF INDIA. THUS THE LEARNED COUNSEL ARGUED THAT IN VIEW OF THE AFORESAID THE FINDINGS OF THE AO THAT ASSESSEE IS NOT SETTLED ABR OAD ARE OPPOSED TO FACTS AND NEED TO BE REVERSED. NOW, IT IS PERTINENT TO ANALYZE THE SECTION 6 OF TH E INCOME TAX ACT, MR. BINOD KUMAR SINGH 35 1961. THE RESIDENTIAL STATUS IS CRUCIAL IN DETERMINING TH E TAXES AN ASSESSEE IS REQUIRED TO PAY. SECTION 6 OF THE INCOM E TAX ACT DEFINES THE FOLLOWING CATEGORIES LIABLE TO PAY TAX IN INDIA: NON- RESIDENT INDIAN (NRI) RESIDENT RESIDENT, BUT NOT ORDINARILY RESIDENT (RNOR) NRIS AND RNORS ARE LIABLE TO PAY TAX ONLY ON THEIR 'INDIAN INCOME' WHILE TAX PAYERS WHO ARE RESIDENT IN INDIA AS PER INCOME TAX ACT ARE TAXED ON THEIR 'WORLD INCOME'. CHAPTER XI OF THE ACT DEFINES A NON-RESIDENT INDIAN AS AN INDIVIDUAL, BEING A CITIZEN OF INDIA OR A PERSON OF INDIAN ORIGIN, WHO IS NOT A RESIDENT. A PERSON IS OF INDIAN ORIGIN IF HE OR EITHER OF HIS INDIAN PARENTS OR ANY OF HIS GRANDPARENTS WA S BORN IN UNDIVIDED INDIA. TO AVAIL OF TAX SOPS EXTENDED TO N RIS, AN INDIVIDUAL MUST SATISFY THE FOLLOWING CRITERIA A PERSON WHO HAS BEEN IN INDIA FOR 60 DAYS OR MORE DURING A FINANCIAL YEAR AND 365 DAYS OR MORE DURING THE PRECEDING FOUR FINANCIAL YEARS QUALIFIES AS A 'RESIDENT' OF INDIA. THIS HAS BEEN RELAXED AND CAN BE EXTENDED TO 182 DAYS. NOT MEETIN G THIS CRITERION QUALIFIES THE INDIVIDUAL FOR A 'NON-RESID ENT' STATUS. NRIS BASED OUTSIDE INDIA CAN CONTINUE TO ENJOY NON- RESIDENT STATUS IN INDIA IF THEIR PRESENCE IN INDIA IS MORE THAN 60 DAYS BUT LESS THAN 182 DAYS, EVEN IF THEIR STAY IN INDIA DURING T HE PAST FOUR FINANCIAL YEARS IS 365 DAYS OR MORE HAVING BEEN DEPUTED OVERSEAS FOR OVER 6 MONTHS ALSO QUALIFIES AN INDIVIDUAL FOR NRI STATUS. THE RELAXATION TO 182 DAYS APPLIES TO: INDIAN CREW MEMBERS SAILING OVERSEAS ON INDIAN SHIP S - THEIR STAY ABROAD IS TREATED AS EMPLOYMENT OUTSIDE INDIA IN THE CASE OF INDIAN CITIZENS AS WELL AS IN THE CA SE OF 'PERSONS OF INDIAN ORIGIN' WHO ARE SETTLED ABROAD BUT VISIT IND IA FOR PERSONAL REASONS. THE CONCESSION OF EXTENDED STAY IS AVAILABLE ONLY T O INDIAN CITIZENS OR TO 'PERSONS OF INDIAN ORIGIN' A 'PERSON OF INDIAN ORIGIN' IS A PERSON WHO IS NOT AN INDIAN CITIZEN, B UT WAS BORN, OR MR. BINOD KUMAR SINGH 36 EITHER OF HIS PARENTS OR GRANDPARENTS WAS BORN IN I NDIA. IN THE CASE OF C.N. TOWNSEND VS. CIT [1974] 97 ITR 185 (PAT) IS WAS HELD THAT IF ANY OF THE CONDITIONS MENTIONED IN CLA USE (A), (B) OR (C) OF SECTION 6(1) IS FULFILLED, THE ASSESSEE WILL BE 'RESIDENT' WITHIN THE MEANING OF THE ACT. IN THE CASE OF VIJAY MALLYA VS. ACIT [2003] 131 TAXMAN 477 (CAL.) IT WAS HELD THAT WHILE DECIDING THE RESIDENT IAL STATUS OF AN ASSESSEE, THE ASSESSING OFFICER SHOULD CONSIDER THE PROVISIONS OF BOTH SECTION 6(1)(A) AND 6(1)(C) AND THIS IS A MAND ATORY REQUIREMENT OF LAW. AN ASSESSEE MAY NOT BE A 'RESID ENT' OF INDIA UNDER SECTION 6(1)(A) BUT MAY BE A RESIDENT OF INDI A UNDER SECTION 6(1)(C). THE AUTHORITIES FUNCTIONING UNDER THE ACT WHO HAVE BEEN EMPOWERED TO SEE THAT PROPER REVENUES ARE COLLECTED CAN SUO MOTU CALL FOR THE RECORDS TO SEE WHETHER QUESTION OF RES IDENTIAL STATUS HAS BEEN PROPERLY DETERMINED BY THE ASSESSIN G OFFICER OR NOT. UNDER THE CIRCUMSTANCES, EVEN WHEN THE ASSESSI NG OFFICER ACCEPTS THE CLAIM OF ASSESSEE AND DECIDES THAT THE ASSESSEE IS A 'NON-RESIDENT' UNDER SECTION 2(30), THEN ALSO HE IS DUTY-BOUND TO RECORD THE REASONS AS TO WHY HE IS NOT HOLDING THE ASSESSEE AS A 'RESIDENT' IN INDIA EITHER UNDER THE PROVISION S OF SECTION 6(1)(A) OR UNDER SECTION 6(L)(C). RECENTLY, THE HON'BLE HIGH COURT OF KARNATAKA DECID ED THE QUESTION WHETHER THE PERIOD OF VISIT BY NRI PRECEDIN G HIS RETURN TO INDIA SHOULD BE EXCLUDED FROM THE TOTAL STAY OF NPJ. THE HON'BLE KARNATAKA HIGH COURT IN MANOJ KUMAR REDDY NARE (201 1) 12 TAXMANN.COM 326 (KAR) HAS HELD THAT THE PERIOD OF V ISIT BY A NON RESIDENT SHALL BE EXCLUDED FOR COUNTING THE NUMBER OF DAYS OF STAY IN A YEAR FOR THE PURPOSE OF DETERMINATION WHETHER HE/SHE IS RESIDENT IN INDIA IN THAT YEAR. IN THIS CASE, THE I SSUE BEFORE THE KARNATAKA HIGH COURT WAS TO DETERMINE THE RESIDENTI AL STATUS OF AN INDIVIDUAL ASSESSEE FOR ASSESSMENT YEAR 2005-06 (PREVIOUS YEAR 2004-05). THE ASSESSEE WHO WAS AN EMPLOYEE OF AN INDIAN COMPANY WAS DEPUTED TO CHICAGO, USA WITH EFFECT FRO M 1ST FEBRUARY 2004. HE STAYED IN INDIA FOR 365 DAYS DURI NG EACH OF THE YEARS FROM PREVIOUS YEAR 2000-01 TO 2006-07, EX CEPT FOR THE PREVIOUS YEARS 2003 -04 AND 2004-05, WHEREIN HE STAYED IN INDIA FOR 306 DAYS AND 78 DAYS RESPECTIVELY. THE ST AY OF 78 DAYS DURING PREVIOUS YEAR 2004-05 ('THE RELEVANT PREVIOU S YEAR') INCLUDED THE DAYS OF HIS VISIT TO INDIA FROM 19TH A UGUST 2004 TO 6TH SEPTEMBER 2004.THE ASSESSEE CAME BACK PERMAN ENTLY TO INDIA ON 31ST JANUARY 2005. THE ASSESSEE WAS HELD T O BE RESIDENT AS HIS STAY DURING THE RELEVANT PREVIOUS YEAR EXCEE DED 60 DAYS AND STAY DURING THE FOUR YEARS IMMEDIATELY PRECEDIN G THE RELEVANT MR. BINOD KUMAR SINGH 37 PREVIOUS YEAR WAS MORE THAN 365 DAYS. DURING THE CO URSE OF PROCEEDINGS BEFORE THE ITAT, AN ALTERNATIVE CONTENT ION WAS RAISED ON BEHALF OF THE ASSESSEE. IT WAS CONTENDED THAT PERIOD OF 60 DAYS REFERRED TO IN SECTION 6(1)(C) OF THE AC T SHOULD EXCLUDE THE PERIOD OF STAY IN INDIA WHILE ON A VISIT AND TH AT NON-ACCEPTANCE OF THIS CONTENTION WOULD LEAD TO AN ABSURD RESULT T WO EXAMPLES WERE GIVEN IN THIS REGARD: EXAMPLE A: A PERSON (CITIZEN OF INDIA / PIO) WHO CO MES ON A VISIT TO INDIA AND STAYS IN INDIA FOR 120 DAYS WOULD BE TREA TED AS NON-RESIDENT, AS THE THRESHOLD IN HIS CASE FOR BEING TREATED AS R ESIDENT IN INDIA WOULD GET EXTENDED TO 182 DAYS INSTEAD OF 60 DAYS B Y VIRTUE OF CLAUSE (B) OF THE EXPLANATION. EXAMPLE B: IF A PERSON (CITIZEN OF INDIA /P10) COME S ON VISIT AND STAYS IN INDIA FOR 90 DAYS AND RETURNS ABROAD AND L ATER ON COMES BACK TO INDIA PERMANENTLY AND HE STAYS IN INDIA FOR A PERIOD OF 30 DAYS, HE WILL BECOME A RESIDENT ACCORDING TO A 0. I N THIS CASE, THE THRESHOLD WOULD NOT GET EXTENDED TO 182 DAYS AS THE ASSESSEE HAS COME BACK TO INDIA PERMANENTLY. THUS, IT WAS PUT FORTH ON BEHALF OF THE ASSESSEE TH AT AN INDIVIDUAL COMING TO INDIA DURING A PREVIOUS YEAR ON A VISIT A ND LATER COMING BACK TO INDIA PERMANENTLY DURING THE SAME YEAR WOUL D FACE HARDSHIP VIS-A-VIS A PERSON COMING TO INDIA ONLY ON VISITS DURING A PREVIOUS YEAR AND STAYING IN INDIA FOR THE SAME PER IOD AS THE FORMER. WHILE CONSIDERING THIS CONTENTION, THE ITAT REFERRED TO THE CORRESPONDING PROVISIONS OF THE INDIAN INCOME-T AX ACT, 1922 AND AFTER CONSIDERING THE LEGISLATIVE HISTORY AND T HE INTENTION OF THE LEGISLATURE, AGREED WITH THE CONTENTION OF THE ASSESSEE THAT PERIOD OF STAY ON A CASUAL OR OCCASIONAL VISIT TO I NDIA IS NOT TO BE RECKONED WHILE COMPUTING THE PERIOD OF STAY IN INDI A. THUS, THE PERIOD OF THE ASSESSEE'S VISIT (FROM 18TH AUGUS T 2004 TO 6TH SEPTEMBER 2004) WAS HELD TO BE EXCLUDIBLE FROM HIS STAY IN INDIA DURING THE RELEVANT PREVIOUS YEAR. THE HON'BLE KARN ATAKA HIGH COURT HELD AS UNDER THE MATERIAL ON RECORD WOULD CLEARLY SHOW THE FACT THAT THE ASSESSEE WAS TO WORK IN U S.A., THOUGH BE AN EMPLOYEE OF THE COMPANY IN INDIA, ON THE BASIS OF THE LETTER OF DEPUTATION. HO WEVER, A CONCURRENT FINDING BY THE ASSESSING OFFICER, THE AP PELLATE AUTHORITY AND THE TRIBUNAL THAT EXCLUDING THE TIME DURING WHI CH HE WAS VISITING INDIA, THE REQUISITE NUMBER OF DAYS, THAT IS 60 DAYS DURING THE CURRENT YEAR, THE ASSESSEE WAS NOT IN INDIA AND THEREFORE, HE IS TO MR. BINOD KUMAR SINGH 38 BE TREATED AS NON-RESIDENT AND CANNOT BE TAXED AS A RESIDENT UNDER SECTION 6(1)(C). THE SAID FINDING OF FACT IS ARRIVE D AT ON THE BASIS OF THE MATERIAL ON RECORD. THE TRIBUNAL AND THE APPELLATE AUTHORITY HAVE RELIED UPON A CERTIFICATE ISSUED BY WARTON RESIDENT IAL, THE EMPLOYER, WHICH IS DATED 18-1-2008. IN THE CERTIFICATE IT IS STATED THAT THE ASSESSEE WAS RESIDENT OF RIVER NORTH PARK APARTMENT S FROM 20TH MARCH, 2004 UNTIL 9TH APRIL, 2005 AND THAT DURING T HE SAID PERIOD, HE RESIDED AT 320 W, ILLINOIS ST. #801, CHICAGO. IT IS HELD BY THE TRIBUNAL THAT IT IS A FACT THAT THE ASSESSEE WAS ON DEPUTATI ON FROM APRIL 2004 TO JANUARY 2005 AND HIS STAY IN INDIA FROM 1 AUGUST TO 6' SEPTEMBER WAS IN RESPECT OF A VISIT TO INDIA AND THIS PERIOD IS TO BE EXCLUDED WHILE CONSIDERING THE APPLICABILITY OF SECTION 6 (1 ) (C). BY HOLDING SO, THE TRIBUNAL ACCEPTED THE ALTERNATIVE CONTENTION OF THE ASSESSEE AND HELD THAT FOR THE PURPOSE OF COMPUTING THE PERIOD O F 60 DAYS AS MENTIONED IN SECTION 6 (1) (C), THE PERIOD OF VISIT TO INDIA WOULD BE EXCLUDED AND ASSESSMENT SHALL BE DONE CONSIDERING H IS STATUS AS 'NON-RESIDENT'. THE ABOVE SAID FINDING OF FACT, CANNOT AT ALL SAID TO BE PERVERSE AND ARBITRARY AS IT IS WELL-FOUNDED AND ALL THE MATERIA L AVAILABLE HAVE BEEN TAKEN INTO CONSIDERATION BY THE APPELLATE AUTH ORITY AND THE TRIBUNAL. THEREFORE, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION IN THIS APPEAL. ACCORDINGLY, APPEAL I S DISMISSED. IT IS NOW RELEVANT TO UNDERSTAND THE MEANING OF THE WORD 'VISIT' AND THE CONTEXT IN WHICH THE SAME HAS BEEN USED IN THE EXPLANATION (B) TO SECTION 6(1)(C). AS PER INCOME TAX ACT, FIRST IT SHOULD BE DETERMINED WHETHER A PERSON IS A RESIDENT OR A NON-RESIDENT. IF A PERSON IS A NON- RESIDENT, THEN ONE HAS TO SEE WHETHER A PERSON IS A N NRI OR NOT. GRAPHICALLY, THE POSITION CAN BE EXPLAINED AS UNDER PERSON RESIDENT OR NON-RESIDENT NRI OR NON-NRI AS PER THE INCOME TAX ACT - SECTION 6(1), IT IS THE NUMBER OF DAYS WHICH DETERMINE THE RESIDENTIAL STATUS. A PERS ON IS CONSIDERED AS A NON-RESIDENT FOR THE PREVIOUS YEAR (HEREINAFTER MR. BINOD KUMAR SINGH 39 REFERRED TO AS RELEVANT PREVIOUS YEAR), IF HE IS IN INDIA FOR A PERIOD OF LESS THAN 181 DAYS IN THE YEAR. HOWEVER THERE IS ANOTHER CONDITION. IF THE PERSON H AS BEEN IN INDIA IN THE FOUR PRECEDING YEARS (PRECEDING THE RE LEVANT PREVIOUS YEAR FOR WHICH RESIDENTIAL STATUS HAS TO B E DETERMINED) FOR 365 DAYS OR MORE, THEN HE SHOULD IN INDIA FOR LESS THAN 60 DAYS. FOR NRIS HOWEVER, THE NUMBER OF DAYS FOR WHICH HE BE IN INDIA AND STILL BE A NON-RESIDENT, IS LESS THAN 182 DAYS (INSTEAD OF LESS THAN 60 DAYS). THUS THEY CAN BE FO R ALMOST SIX MONTHS IN A YEAR AND CONTINUE TO BE NON-RESIDENTS. THUS THE CONDITION OF 60 DAYS IS REDUNDANT IN CASE OF NRIS. THERE IS HOWEVER ONE CONDITION TO BE FULFILLED. THE RELIEF O F ALLOWING TO BE IN INDIA FOR UPTO 181 DAYS AND STILL CONTINUING TO BE A NON- RESIDENT IS AVAILABLE IF THE NIRI COMES TO INDIA FO R A VISIT. WHAT IS A VISIT IS NOT EXPLAINED. GENERALLY IF HE COMES TO IN DIA (FOR ANY PURPOSE), AND GOES BACK, IT SHOULD BE CONSIDERED AS A VISIT TO INDIA. THIS CAN HAVE AN IMPACT IN THE YEAR IN WHICH A PERS ON RETURNS TO INDIA. THE WORD VISIT HAS NOT BEEN DEFINED IN THE INCOME TAX ACT. HOWEVER, THE DEFINITION OF THE WORD VISIT IS AS U NDER VIS.IT VERB\VI-ZET\ VIS.IT.ED:VIS.IT.ING DEFINITION OF VISIT TRANSIT VERB 1 A ARCHAIC: COMFORT USED OF THE DEITY B (1) AFFLICT (2): INFLICT, IMPOSE C: AVENGE D: TO PRESENT ITSELF TO OR COME OVER MOMENTARILY 2 TO GO TO SEE IN ORDER TO COMFORT OR HELP 3 A : TO PAY A CALL ON AS AN ACT OF FRIENDSHIP OR COURTES Y B : TO RESIDE WITH TEMPORARILY AS A GUEST C: TO GO TO SEE OR STAY AT (A PLACE) FOR A PARTICULAR PURPOSE (AS BUSINESS OR SIG HTSEEING) D TO GO OR COME OFFICIALLY TO INSPECT OR OVERSEE INTRANSITIVE VERB MR. BINOD KUMAR SINGH 40 1 TO MAKE A VISIT; ALSO: TO MAKE FREQUENT OR REGULAR VISITS 2 CHAT, CONVERSE EXAMPLES OF VISIT SHE IS VISITING HER AUNT IN NEW YORK. WHEN ARE YOU COMING TO VISIT? HE IS VISITING A CLIENT IN PHOENIX. SHE VISITS HER DOCTOR REGULARLY. I WOULD LIKE TO VISIT ROME SOMEDAY. CITY OFFICIALS VISITED THE BUILDING SITE. OUR TOWN WAS ONCE VISITED BY THE PRESIDENT. BE SURE TO VISIT OUR WEB SITE. ORIGIN OF VISIT MIDDLE ENGLISH, FROM ANGLO-FRENCH VISITER, FROM LATIN VISITARE, FREQUENTATIVE OF VISERE TO GO TO SEE, FREQUENTATIVE OF VIDRE TO SEE FIRST KNOWN USE: 13TH CENTURY RELATED TO VISIT SYNONYMS: CALL (ON OR UPON), DROP IN (ON), SEE ANTONYMS: AVOID, SHUN IN THE INSTANT CASE, THE AG HAS HELD THAT THE VISIT TO INDIA CANNOT BE FOR THE PURPOSE OF LOOKING AFTER HIS BUSINESS AN D STAY AT HIS OWN HOME/RESIDENCE IN INDIA. HOWEVER, IN THE ABSENCE OF THE DEFINITION BEING PROVIDED OF THE WORD 'VISIT' IN THE INDIAN IN COME TAX ACT, 1961, THE ABOVE DEFINITION CAN BE ADOPTED. THE ABOV E DEFINITION COVERS THE BUSINESS, SOCIAL, INSPECTION, TEMPORARY VISITS. THEREFORE, IT CAN SAFELY BE SAID THAT THE PURPOSE OF VISIT IS IMMATERIAL AS FAR AS THE INCOME TAX ACT IS CONCERNED. IN THE CASE OF PRADIP J. MEHTA VS CIT (2002) 175 CTR 394 (GUJ) IT WAS HELD ON 3 MAY, 2002, AS UNDER: MR. BINOD KUMAR SINGH 41 'FROM THE CONDITION OF NOT BEING RESIDENT IN INDIA IN NINE OUT OFTEN PRECEDING YEARS LAID DOWN IN SUB-SECTION (6) OF SEC TION 6, IT DOES NOT AUTOMATICALLY FOLLOW THAT FOR BEING ORDINARILY RESI DENT IN INDIA, ONE SHOULD BE RESIDENT IN INDIA FOR EIGHT YEARS. A RESI DENT IN INDIA WILL BE AN ORDINARILY RESIDENT IN INDIA UNLESS HE QUALIFIES TO BE A 'NOT ORDINARILY RESIDENT IN INDIA' UNDER SECTION 6(6)(A) . ORDINARY RESIDENCE IS THE COUNTRY WHERE A PERSON NORMALLY LIVES OR MAK ES HABITUAL VISITS, AS IN CASE OF AN INDIVIDUAL WHO VISITS THREE HUNDR ED AND SIXTY-FIVE DAYS OR MORE IN THE PRECEDING FOUR YEARS AS CONTEMP LATED IN CLAUSE OF SECTION 6(1)ORDINARIL Y RESIDENT FOR THE PURPOSES OF INCOME-TAX CONNOTES RESIDENCE IN A PLACE WITH SOME DEGREE OF C ONTINUITY AND APART FROM ACCIDENTAL OR TEMPORARY ABSENCES (SEE LE VENE V IRC (1928) A. C. 217, UNION CORPORATION LTD. V. IRC (19 53) 2 WLR 615). THUS, IN LEVENE V. IRC (SUPRA), A BRITISH SUBJECT, WHO HA D BEEN ORDINARILY RESIDENT HERE, RETURNED TO THIS COUNTRY FOR PERIODS OF BETWEEN FOUR AND FIVE MONTHS EVERY YEAR FOR DOMESTIC AND OTHER R EASONS, LIVING IN HOTELS WITHOUT A PERMANENT PLACE OF ABODE. IT WAS H ELD ON THE FACTS THAT HE WAS RESIDENT IN THIS COUNTRY. A SIMILAR DEC ISION WAS GIVEN IN IRC V. LYSAGHAT (1928) AC 234, WHERE THE FACTS WERE NOT SO STRONGLY IN FAVOUR OF THE CROWN; IN THAT CASE A CITIZEN OF THE IRISH FREE STATE CAME TO ENGLISH COMPANY, AND STAYED IN HOTELS FOR A WEEK ON THE OCCASION OF EACH VISIT. THE SPECIAL COMMISSIONERS FOUND AS A FA CT THAT HE WAS RESIDENT IN THE UNITED KINGDOM, AND THE HOUSE OF LO RDS (VISCOUNT CAVE L. C. DISSENTING) REFUSED TO INTERFERE WITH THEIR F INDING. THIS CASE SHOWS THAT THE MOTIVE OF PRESENCE HERE IS IMMATERIAL; IT IS A QUESTION OF QUALITY WHICH THE PRESENCE ASSUMES. THE FOREIGN INCOME OF EVERY RESIDENT EVEN WHEN IT I S NOT BROUGHT INTO THE COUNTRY IS CHARGEABLE TO TAX EXCEPT WHEN T HE RESIDENT IS 'NOT ORDINARILY RESIDENT' IN INDIA. FOR AN INDIVIDU AL INCLUDING A RESIDENT IN ORDER TO BE 'NOT ORDINARILY RESIDENT' S O AS TO ESCAPE TAX ON HIS FOREIGN INCOME, IT MUST BE SHOWN THAT THE PO SITION IS COVERED BY CLAUSE (A) OF SUB-SECTION (6) OF SECTION 6 OF ACT. WHEN AN INDIVIDUAL HAS BEEN A RESIDENT IN INDIA FOR NINE OUT OFTEN PRECEDING YEARS, THEN IN ORDER TO ESCAPE TAX ON HIS FOREIGN INCOME, HE MUST NOT HAVE BEEN IN INDIA FOR SEVEN HUNDRED TH IRTY DAYS OR MORE IN THE AGGREGATE DURING THE PRECEDING SEVEN YE ARS. THE TEST IS ONE OF PRESENCE AND NOT ABSENCE FROM INDIA AND T HE LENGTH OF MR. BINOD KUMAR SINGH 42 PRESENCE WILL DETERMINE WHEN AN INDIVIDUAL IS 'NOT ORDINARILY RESIDENT' IN INDIA. IN ORDER THAN AN INDIVIDUAL IS NOT AN ORDINARILY RESIDENT, HE SHOULD SATISFY ONE OF THE TWO CONDITIO NS LAID DOWN IN SECTION 6(6)(A) OF THE ACT, THE FIRST CONDITION IS THAT HE SHOULD NOT BE RESIDENT IN INDIA IN ALL THE NINE OUT OFTEN YEAR S PRECEDING THE ACCOUNTING YEAR AND THE SECOND CONDITION IS THAT HE SHOULD NOT HAVE DURING THE SEVEN YEARS PRECEDING THAT-YEAR, BE EN IN INDIA FOR A TOTAL PERIOD OF SEVEN HUNDRED THIRTY OR MORE DAYS . THE TRIBUNAL HAS FOUND AS A FACT THAT THE ASSESSEE WAS A RESIDENT IN INDIA FOR EIGHT YEARS OUT OFTEN PRECEDING YEARS AND HIS CASE, THEREFORE, CANNOT FALL UNDER THE FIRST PART OF CLAU SE (A) OF SUB- SECTION (6) OF SECTION 6 OF THE ACT. HIS CASE WILL ALSO NOT FALL IN THE SECOND PART OF THAT CLAUSE, BECAUSE, IN THE SEVEN Y EARS PRECEDING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE HAD BEEN I N INDIA FOR O ZE THOUSAND FOUR HUNDRED AND TWO DAYS, I.E., MUCH M ORE THAN SEVEN HUNDRED THIRTY DAYS BEING THE UPPER LIMIT REF ERRED TO IN THAT CLAUSE. FOR THE ABOVE REASONS, WE ARE OF THE OPINION THAT T HE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE STATUS OF THE ASSESSE E FOR THE YEAR IN QUESTION WAS NOT THAT OF 'NOT ORDINARILY RESIDENT' AS CLAIMED BY HIM, AND THAT IT HAS NOT COMMITTED ANY ERROR IN INT ERPRETING THE PROVISIONS OF SECTION 6(6) OF THE ACT. THE QUESTION NO. I REFERRED TO US IS THEREFORE ANSWERED IN THE AFFIRMATIVE IN F AVOUR OF THE REVENUE AND AGAINST THE ASSESSEE AND THE QUESTION N O. 2 IS ANSWERED IN THE NEGATIVE IN FAVOUR OF THE REVENUE A ND AGAINST THE ASSESSEE. THE REFERENCE STANDS DISPOSED OF ACCORDIN GLY WITH NO ORDER AS TO COSTS. '(EMPHASIS SUPPLIED). FURTHER, IN THE CASE OF CIT V THE HINDU 18 ITR 237, 250; CIT V SRINIVASAN & GOPALAN 23 ITR 87 (SC) IT WAS HELD THA T A DEFINITION OR INTERPRETATION CLAUSE, WHICH EXTENDS THE MEANING OF A WORD, SHOULD NOT BE CONSTRUED AS TAKING AWAY I TS ORDINARY MEANING. FURTHER, SUCH A CLAUSE SHOULD BE SO INTERP RETED AS NOT TO DESTROY THE BASIC CONCEPT OR ESSENTIAL MEANING O F THE EXPRESSION DEFINED, UNLESS THERE ARE COMPELLING WOR DS TO THE CONTRARY. WORDS, WHICH ARE NOT SPECIFICALLY DEFINED, MUST BE TAKEN IN THEIR LEGAL SENSE OR THEIR DICTIONARY MEANING OR TH EIR POPULAR MR. BINOD KUMAR SINGH 43 OR COMMERCIAL SENSE AS DISTINCT FROM THEIR SCIENTIF IC OR TECHNICAL MEANING UNLESS A CONTRARY INTENTION APPEARS. THE SUPREME COURT OF INDIA IN THE CASE OF TARLOCHAN DEV SHARMA VS STATE OF PUNJAB HAS HELD ON JULY 25, 2001 THAT EVEN THE MEANING OF THE WORDS NOT DEFINED IN THE STATUTES SH OULD BE ASSIGNED AFTER READING THE SAME INTO THE CONTEXT. 2.4. BEFORE COMING TO ANY CONCLUSION, WE ARE ANALYZ ING THE BACKGROUND OF THE ASSESSEE (AS IS EVIDENT FROM STATEMENT OF FACTS FILED BEFORE THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) BY THE ASSESSEE THROUGH LETTER DATED 09/0 2/2011- AVAILABLE ON RECORD). THE ASSESSEE WAS BORN IN INDI A ON 14/11/1960 AND AFTER COMPLETING HIS HIGHER SECONDAR Y EDUCATION AT ST. XAVIER COLLEGE RANCHI, JHARKHAND, HE WAS SELECTED BY HEAVY ENGINEERING CORPORATION LTD. AND IN 1978 HE WENT TO SOVIET UNION FOR FURTHER EDUCATION. DURI NG THE PERIOD FROM 1978 TO 1984 HE DID HIS MASTERS IN ENGI NEERING IN RADIO TECHNOLOGY IN SYSTEMS AND ALSO DID POST GR ADUATION IN RUSSIAN LANGUAGE. FROM 1984 TO 1986, HE WORKED I N TRADING PHARMA COMPANY IN USSR AND FROM 1986 AND 87 , HE DID HIS BUSINESS MANAGEMENT FROM SWEDEN AND FROM 19 87 TO 1989 AGAIN WORKED IN A TRADING PHARMA COMPANY. THER EAFTER, FROM 1989 TO 1995, HE WORKED IN A TRADING COMPANY I N UKRAINE. THEREAFTER HE SET-UP HIS OWN BUSINESS IN PHARMACEUTICAL SECTOR PRIMARILY IN RUSSIA, UKRAINE AND CIS COUNTRIES BY SETTING UP A TRADING HOUSE UNDER THE N AME OF TRIGRAM INTERNATIONAL IN UKRAINE. AS PER THE ASSE SSEE, THE BUSINESS VENTURE WAS SUCCESSFUL AND HE ACQUIRED RES IDENTIAL PROPERTIES IN UKRAINE IN 1995 AND 1997. THE ASSESSE E MR. BINOD KUMAR SINGH 44 CONTINUED TO MAINTAIN HIS PERMANENT RESIDENT IN UKR AINE CONDUCTING BUSINESS IN UKRAINE, TILL 2002. THEREAFT ER, ALONG WITH HIS FAMILY, HE SHIFTED TO ENGLAND BUT HIS BUSI NESS INTEREST CONTINUED IN UKRAINE, RUSSIA AND CSI COUNT RIES. THEREAFTER, THE ASSESSEE ACQUIRED FURTHER PROPERTIE S IN UK, THE ADDRESSES OF WHICH ARE PROVIDED IN PARA 1.3 OF THE SAID LETTER. THEREAFTER, THE ASSESSEE CONTINUED HIS BUS INESS IN UKRAINE AND HIS PRIMARY SOURCE OF INCOME WAS BUSINE SS VENTURES/INVESTMENT MADE IN UKRAINE, USSR AND CSI COUNTRIES AND CYPRUS. 2.5. NOW, WE SHALL DEAL WITH THE ALLEGATION OF THE DEPARTMENT THAT ORIGINAL PASSPORT WAS NEVER PRODUCE D BY THE ASSESSEE. AS IS EVIDENT FROM THE RECORD AND THE REM AND REPORT SOUGHT BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FROM THE ASSESSING OFFICER, IT IS EVIDENT THAT IN FACT, THE ASSESSEE PRODUCED THE ORIGINAL PASSPORT BEFORE THE ASSESSING OFFICER AND ALSO BEFORE THE LD. COMMISSIO NER OF INCOME TAX (APPEALS), THE DETAILS OF WHICH ARE SUMM ARIZED HEREUNDER ALONG WITH THEIR VALIDITY:- SR. NO. PASSPORT NO. PLACE OF ISSUE VALIDITY 1. R - 691005 KIEV /UKRAINE 30/06/1994 TO 31/08/1998 2. A - 1280977 KYIV/UKRAINE 19/06/2001 TO 21/01/2008 3. Z - 102352 7 KYIV/UKRAINE 14/05/2003 TO 21/01/2008 4. Z - 1023582 KYIV/UKRAINE 23/08/2006 TO 10/08/2016 5. H - 3291213 LONDON/UK 23/11/2009 TO 22/11/2019 MR. BINOD KUMAR SINGH 45 2.6. SO FAR AS, THE ALLEGATION OF THE LD. CIT-DR T HAT THE ASSESSEE DID NOT SUBMIT THE ORIGINAL PASSPORT IS CO NCERNED, WE FIND, AS IS EVIDENT FROM WRITTEN SUBMISSIONS OF THE ASSESSEE, WHICH HAVE BEEN REPRODUCED IN PARA -3 (P AGE-3) ONWARDS OF THE IMPUGNED ORDER AT PAGE 4, THERE IS A CATEGORICAL FINDING THAT THE ASSESSEE PRODUCED THE ORIGINAL PASSPORTS, BEARING NOS.Z1023527 AND Z1023582, DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS AS IS BORNE OUT FR OM THE LETTER DATED 11/10/2010 AND FROM THE ASSESSMENT ORD ER. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REV ENUE. IN VIEW OF THIS FACTUAL FINDING, WE ARE NOT AGREEING W ITH THE ARGUMENT OF THE LD. CIT-DR, THAT ORIGINAL PASSPORT WAS NOT PRODUCED BY THE ASSESSEE. FROM THE FACTS, IT IS CLEARLY OOZING OUT THAT THE ASSESSEE IN FACT PRODUCED THE PASSPORT ALONG WITH THEIR VALIDITY SO, THE ALLEGATION OF THE ASSES SING OFFICER WHICH WERE IDENTICALLY ARGUED BY LD. CIT-DR ARE NOT SUBSTANTIATED, THEREFORE, ON THE BASIS OF FINDING R ECORDED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND EX AMINED BY US CLEARLY INDICATES THAT THE PASSPORT WERE IN F ACT PRODUCED BY THE ASSESSEE. 2.7. NOW, SO FAR AS, STATUS OF THE ASSESSEE IS CON CERNED WHICH IS TO BE IDENTIFIED BY HIS STAY IN INDIA, IS CONCERNED, IT IS SUMMARIZED AS UNDER:- PREVIOUS YEAR A.Y. DAYS OUTSIDE INDIA DAYS IN INDIA CONSEQUENT RESIDENTIAL STATUS REMARKS 1994 - 95 1995 - 96 337 28 NON - RESIDENT 1995 - 96 1996 - 97 306 59 NON - MR. BINOD KUMAR SINGH 46 RESIDENT 1996 - 97 1997 - 98 337 28 NON - RESIDENT 1997 - 98 1998 - 99 346 19 NON - RESIDENT PASSPORT FOR PERIOD 1 ST SEPT. 1998 TO 18 TH JUNE 2001 NOT TRACEABLE AT PRESENT. NO. OF DAYS COMPUTED FOR THE PERIOD 1 ST APRIL 1998 TO 31 ST AUGUST 98. 1998 - 99 1999 - 00 N.A. N.A. PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 1999 - 00 2000 - 01 N.A. N.A. PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 2000 - 01 2001 - 02 N.A. N.A. PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 2001 - 02 2002 - 03 215 150 PASSPORT FOR PERIOD 1 ST SEP. 1998 TO 18 TH JUNE, 2001 NOT TRACEABLE AT PRESENT 2002 - 03 2003 - 04 206 159 NON - RESIDENT (AS PER SECTION 6(1)(C) READ PERIOD COMPUTED FROM ORIGINAL PASSPORT MR. BINOD KUMAR SINGH 47 WITH EXPLANATION B) 2003 - 04 2004 - 05 261 104 NON - RESIDENT (AS PER SECTION 6(1)(C) READ WITH EXPLANATION B) PERIOD COMPUTED FROM ORIGINAL PASSPORT. STAYED IN INDIA FOR LESS THAN 182 DAYS FOR EACH PREVIOUS YEAR & CONTINUOUSLY RESIDENT ABROAD 2004 - 05 2005 - 06 187 178 2005 - 06 2006 - 07 223 142 2006 - 07 2007 - 08 265 100 2007 - 08 2008 - 09 188 177 2008 - 09 2009 - 10 288 77 IT IS NOTEWORTHY THAT DURING THE SEARCH OPERATION A ND THEREAFTER ALSO, THE ASSESSEE WAS NEVER CONFRONTED BY THE ASSESSING OFFICER WITH THE HELP OF ANY RELEVANT MAT ERIAL, SEIZED DURING SEARCH, JUSTIFYING THE CHANGE OF STAT US OF THE ASSESSEE FROM NON-RESIDENT TO RESIDENT. THE DETAIL S OF PERIOD OF STAY, IN INDIA, BY THE ASSESSEE IS TABULATED HER EUNDER (AS IS EVIDENT FROM RECORD) FOR READY REFERENCE:- DATE OF ARRIVAL & DEPARTURE NO. OF DAYS IN INDIA GRAND TOTAL NO. OF DAYS RELEVANT A.Y. REFERENCE 26/12/1994 TO 23/01/1995 28 28 1995-96 COMMISSIONER OF INCOME TAX (APPEALS) ORDER FOR A.Y. 2003-04 PAGE- 10 31/03/1995 TO 04/04/1995 5 59 1996-97 07/04/1995 TO 14/04/1995 7 24/10/1995 TO 02/11/1995 9 21/12/1995 TO 18/01/1996 28 09/02/1996 TO 12/02/1996 3 08/03/1996 TO 15/03/1996 7 20/15/1996 TO 17/01/1997 28 28 1997-98 MR. BINOD KUMAR SINGH 48 01/05/1997 TO 08/05/1997 7 19 1998-99 24/07/1997 TO 31/07/1997 7 22/09/1997 TO 27/09/1997 5 17/04/1998 TO 24/04/1998 8 39 1999-00 CIT(A) ORDE R OF A.Y. 2003-04 PAGES 12 & 13 10/071998 TO 17/07/1998 8 29/12/1998 TO 20/01/1999 23 8/4/1999 TO 19/4/1999 11 123 2000-01 CIT(A) ORDER OF A.Y.2006-07 PAGES 7 & 8 28/6/1999 TO 1/9/1999 65 18/10/1999 TO 25/10/1999 7 16/12/1999 TO 10/1/2000 25 13/3/2000 TO 28/3/2000 15 5/10/2000 TO 24/10/2000 19 57 2001-02 27/12/2000 TO 23/1/2001 27 5/3/2001 TO 16/3/2001 11 03/07/2001 TO 19/09/2001 68 150 2002-03 CIT(A) OR DER OF A.Y. 2003-04 PAGES 10 & 11 19/10/2001 TO 24/10/2001 5 18/11/2001 TO 13/01/2002 56 03/03/2002 TO 24/03/2002 21 03/05/2002 TO 22/05/2002 20 179 2003-04 01/07/2002 TO 28/08/2002 58 09/09/2002 TO 02/11/2002 53 17/11/2002 TO 30/11/2002 13 17/12/2002 TO 21/01/2003 35 02/04/2003 TO 04/04/2003 2 162 2004-05 CIT(A) ORD ER OF A.Y.2004-05 PAGES 13 & 17 05/07/2003 TO 02/09/2003 59 01/10/2003 TO 29/12/2003 89 02/02/2004 TO 11/02/2004 9 28/03/2004 TO 31/03/2004 3 01/04/2004 TO 22/05/2004 51 174 2005-06 CIT(A) OR DER OF A.Y.2005-06 PAGES 11 & 16 16/07/2004 TO 18/07/2004 2 30/07/2004 TO 07/09/2004 39 29/10/2004 TO 21/11/2004 23 20/12/2004 TO 17/02/2005 59 31/03/2005 TO 31/03/2005 NIL 01/04/2005 TO 09/06/2005 69 209 2006-07 CIT(A) OR DER OF A.Y.2006-07 PAGES 7 & 13 31/07/2005 TO 05/09/2005 36 25/11/2005 TO 28/11/2005 3 07/12/2005 TO 08/01/2006 32 10/01/2006 TO 03/02/2006 23 12/02/2006 TO 28/03/2006 44 29/03/2006 TO 31/03/2006 2 01/04/2006 TO 13/04/2006 12 96 2007-08 22/10/206 TO 06/11/2006 15 05/12/2006 TO 09/11/2007 35 25/02/2007 TO 31/03/2007 34 01/04/2007 TO 18/04/2007 17 173 2008-09 CIT(A) ORDE R OF A.Y.2008-09 PAGES 9, 10 & 11 27/04/2007 TO 13/05/2007 16 08/07/2007 TO 11/08/2007 34 19/08/2007 TO 16/09/2007 28 13/01/2008 TO 31/03/2008 78 MR. BINOD KUMAR SINGH 49 01/04/2008 TO 08/04/2008 7 75 2009-10 CIT(A) ORDER OF A.Y.2009-10 PAGES 11 & 15 23/05/2008 TO 16/06/2008 24 02/11/2008 TO 13/11/2008 11 13/12/2008 TO 04/01/2009 22 20/03/2009 TO 31/03/2009 11 BASED UPON THE ABOVE DETAILS, RELEVANT TO PROVISION S OF THE ACT, THE YEAR WISE RESIDENTIAL STATUS/POSITION OF T HE ASSESSEE IS SUMMARIZED HEREUNDER:- A.Y. F.Y. NO. OF DAYS IN INDIA DURING THE YEAR STATUS IN TERMS OF SECTION 6(1)(A) AND 6(1)(C) IF RESIDENT WHETHER COVERED BY SECTION 6(6)(A)( YES/NO) NOT ORDINARILY RESIDENT 1995 - 96 1994 - 95 28 NON - RESIDENT NOT APPLICABLE 1996 - 97 1995 - 96 59 NON - RESIDENT NOT APPLICABLE 1997 - 98 1996 - 97 28 NON - RESIDENT NOT APPLICABLE 1998 - 99 1997 - 98 19 NON - RESIDENT NOT APPLICABLE 1999 - 2000 1998 - 99 39 NON - RESIDENT NOT APPLICABLE 2000 - 01 1999 - 00 123 NON - RESIDENT NOT APPLICABLE 2001 - 02 2000 - 01 57 NON - RESIDENT NOT APPLICABLE 2002 - 03 2001 - 02 150 NON - RESIDENT NOT APPLICABLE 2003 - 04 2002 - 03 159 NON - RESIDENT NOT APPLICABLE 2004 - 05 2003 - 04 162 NON - RESIDENT NOT APPLICABLE 2005 - 06 2004 - 05 1 74 NON - RESIDENT NOT APPLICABLE 2006 - 07 2005 - 06 209 RESIDENT YES RESIDENT BUT NOT ORDINARY RESIDENT (REFER NOTE (II) 2007 - 08 2006 - 07 96 NON - RESIDENT NOT APPLICABLE 2008 - 09 2007 - 08 173 NON - RESIDENT NOT APPLICABLE 2009 - 10 2008 - 09 75 NON - RESIDENT NOT APPLI CABLE THE ASSESSEE BEFORE THE AUTHORITIES PUT THE FOLLOWI NG NOTES:- I. THE ASSESSEE IS AN INDIVIDUAL, CITIZEN OF INDIA/PER SON OF INDIAN ORIGIN, WHO COMES ON A VISIT TO INDIA, THE MR. BINOD KUMAR SINGH 50 PROVISION OF SUB-CLAUSE (C) SHALL APPLY IN RELATION TO ANY YEAR AS IF FOR THE WORDS SIXTY DAYS THE WORD ONE HUNDRED AND EIGHTY TWO DAYS HAS BEEN SUBSTITUTED, THEREFORE, IN TERMS SECTION 6 (1)(C), EVEN IF ASSES SEE IS WITHIN INDIA FOR A TOTAL OF 365 DAYS IN FOUR YEARS PRECEDING THE RELEVANT YEAR, THEN ALSO THE PERSON I S TO BE CONSIDERED AS RESIDENT FOR A PARTICULAR YEAR AS HE HAS TO BE IN INDIA FOR 182 DAYS ARE MORE IN THAT YE AR. II. DURING A.Y. 2006-07, THE ASSESSEE WAS IN INDIA FOR MORE THAN ONE EIGHTY TWO DAYS, THEREFORE, HE IS A RESIDE NT IN INDIA FOR THAT YEAR. HOWEVER, KEEPING IN VIEW, THE AFORESAID HISTORY OF THE ASSESSEE, HE IS NOT ORDIN ARILY RESIDENT AS IN ALL THE TEN PREVIOUS YEAR PRECEDING F.Y. 2005-06, THE ASSESSEE IS A NON-RESIDENT. 2.8. IF THE TOTALITY OF FACTS ARE ANALYZED FOR A.Y . 2008-09, THE TOTAL STAY OF THE ASSESSEE IN INDIA COMES TO 17 3 DAYS, WHICH IS FURTHER FORTIFIED BY THE FINDING CONTAINED IN PAGES 9,10 AND 11 OF THE IMPUGNED ORDER. NOW, WE SHALL A NALYZE THE SECTION 6 OF THE ACT, WHICH READS AS UNDER:- 6. FOR THE PURPOSES OF THIS ACT, (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 PERI ODS AMOUNTING IN ALL TO ONE HUNDRED AND EIGHTY-TWO DAYS OR MORE; OR (B) [* * *] (C) HAVING WITHIN THE FOUR YEARS PRECEDING THAT Y EAR 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 AMOUNT ING IN ALL TO SIXTY DAYS OR MORE IN THAT YEAR. 28 [ EXPLANATION 1 ] .IN THE CASE OF AN INDIVIDUAL, MR. BINOD KUMAR SINGH 51 (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 MERCHANT SHIPPING ACT, 1958 (44 OF 1958), OR FOR THE PURPOSES OF EMPLOYMENT OUTSIDE INDIA, THE PROVISIONS OF SUB-CLA USE (C) SHALL APPLY IN RELATION TO THAT YEAR AS IF FOR THE WORDS 'SIXTY DA YS', OCCURRING THEREIN, THE WORDS 'ONE HUNDRED AND EIGHTY-TWO DAYS' HAD BEE N SUBSTITUTED ; (B) BEING A CITIZEN OF INDIA, OR A PERSON OF INDI AN ORIGIN WITHIN THE MEANING OF EXPLANATION TO CLAUSE (E) OF SECTION 115C , WHO, BEING OUTSIDE INDIA, COMES ON A VISIT TO INDIA IN ANY PREVIOUS YEAR, THE PROVISIONS OF SUB- CLAUSE (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. 29 [ EXPLANATION 2.FOR THE PURPOSES OF THIS CLAUSE, IN THE CASE OF AN INDIVIDUAL, BEING A CITIZEN OF INDIA AND A MEMBER O F THE CREW OF A FOREIGN BOUND SHIP LEAVING INDIA, THE PERIOD OR PERIODS OF STAY IN INDIA SHALL, IN RESPECT OF SUCH VOYAGE, BE DETERMINED IN THE MANNER AND SUBJECT TO SUCH CONDITIONS AS MAY BE PRESCRIBED. ] IF THE FACTUAL POSITION AND THE AFORESAID PROVISION OF THE ACT ARE KEPT IN JUXTAPOSITION, THE INCIDENTS OF TAX DEP END UPON THE RESIDENTIAL STATUS OF THE ASSESSEE IN INDIA. I N CASE OF NON-RESIDENT ONLY INCOME AROSE IN INDIA I.E. IN COME RECEIVED OR DEEMED TO BE RECEIVED IN INDIA ARE TAXA BLE IN INDIA. FOREIGN INCOME IS NOT TAXABLE IN INDIA. BUSINESS INCOME IN CASE OF BUSINESS, WHICH IS CONTR OLLED WHOLLY OR PARTLY FROM INDIA (A) INCOME FROM PROFESSION/BUSINESS SET UP IN INDIA. IN CASE OF A RESIDENT ASSESSEE, THE INCOME ARISIN G IN INDIA AND FOREIGN INCOME ARE TAXABLE IN INDIA. MR. BINOD KUMAR SINGH 52 2.9 SO FAR AS, THE CONTENTION OF THE LD. CIT-DR TH AT THERE IS VIOLATION OF RULE-46A OF THE RULES AND FUR THER NO OPPORTUNITY WAS PROVIDED TO THE ASSESSING OFFICER I S CONCERNED, WE NOTE THAT THE DETAILS, FILED BY THE A SSESSEE, WERE EXAMINED BY LD. COMMISSIONER OF INCOME TAX (APPEALS ) ALONG WITH THE CONTENTION OF THE ASSESSING OFFICER, WHO W AS VERY MUCH PRESENT BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DURING FIRST APPELLATE STAGE PROCEEDINGS AS IS EVIDENT FROM THE IMPUGNED ORDER (PAGE-1) THAT SHRI VIJENDRA OJHA ADDL. CIT AND SHRI AMIT SINGH ACIT BOTH WERE PRESEN T, THEREFORE, THE CONTENTION OF THE LD. DR THAT OPPORT UNITY WAS NOT PROVIDED TO THE ASSESSEE IS NOT SUBSTANTIATED. IT IS ALSO NOTED FROM THE IMPUGNED ORDER (PAGE-13) THAT THE CO NTENTION OF THE ASSESSING OFFICER HAS BEEN DULY INCORPORATED IN THE IMPUGNED ORDER, WHEREIN, THE ASSESSEE FURNISHED CER TAIN COPIES OF DOCUMENTS, EVIDENCING THAT DURING F.Y. 20 02-03 TO 2008-09, HE WAS DOMICILED IN U.K. THE DOCUMENTS REL ATES TO SCHOOL CERTIFICATE OF HIS DAUGHTER, SON, ELECTRICIT Y BILLS, CLUB CARDS, PROPERTY DOCUMENTS, ETC. IT IS ALSO NOTED TH AT FOR A.Y. 2007-08, THE CONTENTION OF THE ASSESSEE AS WELL AS OTHER DETAILS, CONTENTION OF THE ASSESSING OFFICER WERE C ONSIDERED HOLDING THAT THE PERIOD OF STAY OF THE ASSESSEE IN INDIA WAS 173 DAYS AS AGAINST 178 DAYS DETERMINED BY THE ASSE SSING OFFICER, MEANING THEREBY, THE PERIOD OF STAY WAS LE SS 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-RESIDE NT, THEREFORE, THE GLOBAL INCOME CANNOT BE TAXED IN IND IA. WE, MR. BINOD KUMAR SINGH 53 THEREFORE, ON THIS ISSUE, AFFIRM THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 3. THE NEXT GROUND RAISED BY THE REVENUE PERTAINS T O DELETING THE ADDITION OF RS.33,67,59,738/- U/S 68 O F THE ACT ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN INDIAN B ANK ACCOUNTS, MERELY ON THE EVIDENCE OF TRANSFER OF FUN DS AND CONFIRMATION WITHOUT INVESTIGATING THE SOURCE OF FU NDS TRANSFERRED FROM FOREIGN BANK ACCOUNTS. 3.1. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE REVENUE IS IN SUPPORT OF THE ASSESSMENT ORDER, WHEREIN, THE ADDITION OF RS.18,08,83,727/- (AXIS BANK) AND RS.15,58,76,011/- (HSBC BANK) (TOTAL RS.33,67,59,738/-) BEING REMITTANCE RE CEIVED FROM ABROAD FROM THE FUNDS OF THE ASSESSEE (OWNED FUNDS/ACCUMULATED) EARNINGS OVER THE PERIOD OF YEAR S WAS MADE BY THE ASSESSING OFFICER. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE, EXPLAINED THAT THESE ARE OWN FUNDS/ACCUMULATED EARNING OVER A PERIOD OF MANY YEA RS WERE REMITTED FROM THESE BANKS BY THE ASSESSEE. THE CONC LUSION DRAWN IN THE IMPUGNED ORDER WAS DEFENDED. 3.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE OF FOREIGN REMITTANCE HAS BEEN DISCUSSED IN PARA 24 (P AGE 29) OF THE ASSESSMENT ORDER BY HOLDING THAT THE ASSESSEE R EFUSED TO EXPLAIN THE SOURCE AND THE NATURE OF THE REMITTANCE S, THEREFORE, THE LD. ASSESSING OFFICER TREATED THE RE MITTANCE AS UNEXPLAINED CREDIT U/S 68 OF THE ACT AND ADDED TO T HE TOTAL MR. BINOD KUMAR SINGH 54 INCOME OF THE ASSESSEE. THE STAND OF THE ASSESSEE IS THAT NECESSARY DETAILS WERE FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND IF HE WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, HE SHOULD HAVE ASKED F OR FURTHER DETAILS. WE NOTE THAT BEFORE THE LD. COMMISSIONER O F INCOME TAX (APPEALS), THE ASSESSEE FILED ADDITIONAL EVIDEN CE IN SUPPORT OF THE REMITTANCES, WHICH ARE AS UNDER:- (A) COPY OF HSBS BANK INDIA FIRC IN SUPPORT OF REMI TTANCE OF RS.13,57,72,439/-, RECEIVED IN INDIA, IN NRE ACCOUN T OF THE ASSESSEE FROM A FOREIGN BANK ACCOUNT (B) COPY OF CONFIRMATION OF RS.2,01,03,572/-, RECEI VED FROM M/S SELESTA HOING LTD. AGAINST THE AMOUNTS OWED BY M/S BIOGENETICA LTD. (SUBSIDIARY OF M/S SELESTA HOING L TD.) TO THE ASSESSEE ALONG WITH FUNDS TRANSFER ADVICE FROM BANK OF CYPRUS AND FRIC ISSUED BY HSBC BANK, INDIA. (C) COPY OF FRIC, ISSUED BY AXIS BANK, INDIA, IN SU PPORT OF REMITTANCE OF RS.18,08,83,727/-, RECEIVED IN INDIA FROM FOREIGN BANK ACCOUNT OF THE ASSESSEE (SHRI VINOD SI NGH). 3.3. IT IS NOTEWORTHY THAT AFORESAID EVIDENCE WAS FORWARDED FOR EXAMINATION BY THE ASSESSING OFFICER AND REPORT, NO COMMENTS WERE OFFERED EXCEPT SAYING THAT EVIDENC E SHOULD NOT BE ADMITTED. SO FAR AS, ADMISSION OF ADDITIONAL EVIDENCE IS CONCERNED, WE ARE OF THE VIEW, THAT THE LD. COMMISS IONER OF INCOME TAX (APPEALS) IS EMPOWERED TO ADMIT THE ADDI TIONAL EVIDENCE AND SOUGHT REMAND REPORT FROM THE ASSESSIN G MR. BINOD KUMAR SINGH 55 OFFICER. THE AMOUNT OF RS.31,66,56,166/- WAS RECEIV ED IN BANK ACCOUNTS OF THE ASSESSEE THROUGH REGULAR BANK ING CHANNEL FROM HIS BANK ACCOUNT MAINTAINED IN OVERSEA S BRANCH/ABROAD. SO FAR AS, THE BALANCE AMOUNT OF RS.2,01,03,572/-, IS CONCERNED, IT REPRESENTS THE A MOUNTS REMITTED BY M/S SELESTA HOLDING LTD. AGAINST THE AM OUNT OWED BY M/S BIOGENETICA LTD. (SUBSIDIARY OF M/S SELESTA HOING LTD.) TO THE ASSESSEE ALONG WITH FUNDS TRANSFER ADVICE FR OM THE BANK OF CYPRUS AND FIRC ISSUED BY HSBC BANK IN WHICH THE ASSESSEE HAD AN INTEREST. THE IMPUGNED AMOUNTS WERE REMITTED FROM RESPECTIVE BANK ACCOUNTS OF THE ASSES SEE IN INDIA. THESE WERE PERSONAL FOREIGN BANK ACCOUNTS OF THE ASSESSEE AND REMITTED TO NRE INDIAN BANK ACCOUNTS I N INDIA. THIS FACTUAL FINDING WAS NEITHER CONTROVERTED BY TH E REVENUE NOR ANY ADVERSE MATERIAL WAS BROUGHT ON RECORD. THE REFORE, SO FAR AS, APPLICATION OF SECTION 68 OF THE ACT IS CON CERNED, WE FIND THAT THE ASSESSEE HAS PROVED ALL THE THREE ING REDIENTS I.E. SOURCE, CREDITWORTHINESS AND GENUINENESS OF THE TRA NSACTION, AS CONTAINED IN SECTION 68 OF THE ACT, THEREFORE, I F THE ASSESSING OFFICER WAS STILL NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THEN BURDEN SHIFTS UPON THE REVENUE TO PROVE OTHERWISE. IT IS ALSO NOTED FROM PAGE 15 (LAST PARA ) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HIMSELF EXAMIN ED THE EVIDENCE WITH RESPECT TO REMITTANCE WHICH WERE SUPP ORTED BY FIRC, ISSUED BY BANK IN INDIA, REMITTANCE ADVICE OF A FOREIGN BANK, CONFIRMATION OF EACH COMPANIES, CONFIRMING TH AT REMITTANCE WERE MADE AT THE INSTANCE OF THE ASSESSE E TO WHOM SUBSTANTIAL AMOUNTS WERE OWED BY THEM, CERTIFICATE OF MR. BINOD KUMAR SINGH 56 INCORPORATION OF THE SAID COMPANIES, CONFIRMATION T HAT THE AMOUNTS ARE NOT LOANS BUT WERE OWN FUNDS, DUE FROM THE SAID COMPANIES, THUS, IN THE ABSENCE OF ANY ADVERSE MATE RIAL, WE AFFIRM THE FINDING OF THE LD. COMMISSIONER OF INCOM E TAX (APPEALS). EVEN OTHERWISE, ADDITION U/S 68 CAN BE M ADE ONLY WHEN THE THREE INGREDIENTS, CONTAINED IN THE SECTIO N, ARE NOT SATISFIED BY THE ASSESSEE. THE REVENUE HAS NOT PROD UCED ANY MATERIAL THAT THE ASSESSEE VIOLATED THE PROVISION O F THE ACT. EVEN OTHERWISE, WE ARE SATISFIED THAT THE ASSESSEE HAS FULFILLED THE CONDITIONS ENSHRINED IN SECTION 68 OF THE ACT A S IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTION HAS BEE N SATISFACTORILY EXPLAINED BY THE ASSESSEE. THE ASSES SEE HAS PROVED THE SOURCE OF RECEIPT OF THE IMPUGNED AMOUNT S. WE ARE AWARE THAT INITIAL BURDEN IS UPON THE ASSESSEE TO P ROVE THE SOURCE OF SUCH RECEIPTS BUT ONCE IT IS DISCHARGED, NO ADDITION CAN BE MADE U/S 68 OF THE ACT. EVEN OTHERWISE, IF T HE ASSESSING OFFICER WAS STILL NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THEN THE ONUS SHIFTS TO THE REVENUE T O PROVE OTHERWISE, CONSEQUENTLY, WE FIND NO MERIT IN THE AR GUMENT OF THE DEPARTMENT WITH RESPECT TO THE IMPUGNED GROUND. THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), ON THIS ISSUE, IS AFFIRMED. 4. THE NEXT GROUND RAISED BY THE REVENUE PERTAINS T O DELETING THE ADDITION OF RS.15,44,72,906/- MADE U/S 68 OF THE ACT. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ADDITION MADE BY THE LD. ASSES SING OFFICER, MR. BINOD KUMAR SINGH 57 WHEREAS, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 4.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. ASSESSING OFFICER MADE THE ADDITION U/S 68 OF THE INCOME TAX ACT, FOR THE AMOUNT OF RS.15,44,72,906/- ($ 32,86,657 AT THE RAT E OF RS.47 PER DOLLAR AT THE RELEVANT TIME) WHICH WAS FOUND DE POSITED IN THE ACCOUNT MAINTAINED BY THE ASSESSEE WITH HSBC BA NK USA. THE ADDITION WAS MADE BY THE LD. ASSESSING OFF ICER ON THE GROUND THAT THE ASSESSEE REFUSED TO FURNISH THE NATURE AND SOURCE OF THESE DEPOSITS. WE FIND FROM THE ASS ESSMENT ORDER ITSELF (PARA-18, PAGE-17) THAT VIDE LETTER DA TED 13/09/2010, THE ASSESSEE CLAIMED THAT SINCE HE IS N ON- RESIDENT, THE INCOME EARNED ABROAD (OUTSIDE INDIA) IS NOT CHARGEABLE TO TAX IN INDIA. HOWEVER, THE LD. ASSESS ING OFFICER MADE ADDITION OF THE IMPUGNED AMOUNT U/S 68 OF THE ACT. 4.2. ON APPEAL, BEFORE THE LD. FIRST APPELLATE AUTH ORITY, THE FACTUAL MATRIX WAS EXAMINED AND FINALLY, AS IS EVID ENT FROM PARA NO.10 (PAGE-16 ONWARDS), BY FOLLOWING VARIOUS DECISIONS, THE ADDITION WAS DELETED, AGAINST WHICH, THE REVENU E IS IN APPEAL BEFORE THIS TRIBUNAL. 4.3. WE FIND THAT THERE IS A CATEGORICAL FINDING IN THE IMPUGNED ORDER (PAGE-16) THAT THE I.T. DEPARTMENT C ONDUCTED INDEPENDENT ENQUIRIES ABROAD WITH RESPECT TO BANK A CCOUNT OF THE ASSESSEE AND THE AMOUNT WAS TREATED UNEXPLAINED . THIS ENQUIRY, IF ANY, WAS MADE BEHIND THE BACK OF THE AS SESSEE AND MR. BINOD KUMAR SINGH 58 THE DEPARTMENT WAS DUTIFULLY BOUND TO CONFRONT THE ASSESSEE, IF ANY, ADVERSE MATERIAL IS FOUND. ADMITTEDLY, THE ASSESSEE WAS RESIDING ABROAD FOR THE LAST MANY YEARS. THE NE CESSARY INFORMATION/DETAILS WITH RESPECT TO INCOME EARNED I N INDIA, PROPERTIES IN INDIA, DIRECTORSHIP, SHARE HOLDING IN INDIAN COMPANIES, ETC. WERE FURNISHED BY THE ASSESSEE. IN VIEW OF THIS FACTUAL POSITION, WE ARE IN AGREEMENT, WITH TH E FINDING OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT N O PERSON SHOULD BE CONDEMNED UNHEARD AND RIGHT TO CONFRONT/C ROSS EXAMINATION IS THE INHERENT RIGHT OF A PERSON AGAIN ST WHOM ALLEGATIONS ARE MADE. THE RATIO LAID DOWN IN FOLLOW ING DECISIONS SUPPORTS THE CASE OF THE ASSESSEE AND ALS O OUR VIEW. I. RAJESH KUMAR VS DCIT (2006) 287 ITR 91 (SC) II. CIT VS DHRAMPAL PREMCHAND LTD. 295 ITR 105 (DEL.) III. PRAKASHCHAND NAHATA VS CIT (2008) 301 ITR 134 (MP) IV. CIT VS SMC SHARE BROKERS LTD. (2007) 288 ITR 345 (DEL.) 4.4. THE CRUX OF THE RATIO LAID DOWN BY HONBLE HI GH COURTS AND ALSO BY HONBLE APEX COURT ARE THAT THE ASSESSMENT PROCEEDINGS ARE PART OF JUDICIAL PROCESS , THUS, ATTRACT PRINCIPLE OF NATURAL JUSTICE AND ANY EVIDEN CE WHICH IS PUT FORTH AGAINST THE ASSESSEE HAS TO BE CONFRONTED TO THE ASSESSEE SUBJECT TO RIGHT OF CROSS EXAMINATION. THE RELEVANT PORTION OF FACTS AND DECISION IN THE CASE OF PRAKAS HCHAND NAHATA (SUPRA) IS REPRODUCED HEREUNDER:- MR. BINOD KUMAR SINGH 59 ON A BARE READING OF THE SAID PROVISION IT IS MANI FEST THAT THE SAME EMPOWERS THE INCOM E-TAX OFFICER TO ENFORCE THE ATTENDANCE OF ANY PERSON AND EXAMINE HIM ON OATH. T HAT POWER HAS BEEN EXERCISED BY THE ASSESSING OFFICER I N THE ASSESSMENT PROCEEDING. IT IS CONTENDED BY MR. SHRIV ASTAVA THAT WHEN A WITNESS HAS BEEN EXAMINED BY THE ASSESS ING OFFICER AND HIS STATEMENT HAS BEEN PRESSED INTO SER VICE, THE ASSESSEE SHOULD HAVE BEEN ALLOWED TO CROSS-EXAM INE, MORE SO, WHEN, HE HAD FILED AN AFFIDAVIT RETRACTING FROM HIS EARLIER STATEMENTS . 4.5. IN P.S. ABDUL MAJEED V. AGRICULTURAL ITO AND STO , THE HIGH COURT OF KERALA TOOK NOTE OF THE ORDER OF REASSESSMENT WHICH WAS MADE WITHOUT ANY REFERENCE T O INSPECTION RECORDS AND MADE ON THE BASIS OF THE STR ENGTH OF THE ENTRIES IN THE AUCTIONEERS' RECORDS. IN THAT CO NTEXT, IT WAS HELD THAT RELIANCE ON THE AUCTIONEER'S RECORDS AND TREATING THEM AS IF THEY WERE CONCLUSIVE DID VIOLENCE TO THE PRINCIPLES OF NATURAL JUSTICE WHEN THE PETITIONER HAD PRAYED FOR AN OPPORTUNITY TO CROSS-EXAMINE THE AUCTIONEERS. IT WA S RULED THEREIN THAT WHEN SUCH A REQUEST WAS MADE IT WAS IN CUMBENT ON THE OFFICER TO AFFORD AN OPPORTUNITY TO THE ASSE SSEE TO CROSS- EXAMINE THE AUTHORS OF THOSE BOOKS. 4.6. IN THIS CONTEXT, WE MAY REFER TO A THREE-JUDG E BENCH JUDGMENT OF THE APEX COURT RENDERED IN STATE OF KER ALA V. K.T. SHADULI YUSUFF , WHEREIN THEIR LORDSHIPS EXPRESSED THE VIEW THAT WHERE THE ENTRIES IN THIRD PARTY'S ACCOUNTS WE RE USED TO REJECT THE ASSESSEE'S ACCOUNTS TO PASS BEST JUDGMEN T ASSESSMENT, DENIAL OF THE ASSESSEE'S REQUEST TO CRO SS-EXAMINE THE THIRD PARTY VITIATES THE ORDER OF ASSESSMENT. MR. BINOD KUMAR SINGH 60 4.7. IN RAJESH KUMAR, THE APEX COURT HAS EXPRESSED THE OPINION THAT ASSESSMENT PROCEEDING IS A PART OF JUD ICIAL PROCESS AND WHEN A STATUTORY PROCESS IS EXERCISED B Y THE ASSESSING AUTHORITY IN EXERCISE OF ITS JUDICIAL FUN CTIONS WHICH IS DETRIMENTAL TO THE ASSESSEE, IT IS NOT AND CANNO T BE ADMINISTRATIVE IN NATURE. THEIR LORDSHIPS EXPRESSED THE OPINION THAT WHEN CIVIL CONSEQUENCES ENSUE, THERE I S HARDLY ANY DISTINCTION BETWEEN AN ADMINISTRATIVE ORDER AND A QUASI- JUDICIAL ORDER AND IT ATTRACTS THE PRINCIPLES OF NA TURAL JUSTICE. MR. ROHIT ARYA, LEARNED SENIOR COUNSEL FOR THE REVE NUE, SUBMITTED THAT THE SAID DECISION IS DISTINGUISHABLE AS THAT DEALS WITH GIVING OF REASONS. WE HAVE REFERRED TO T HE SAME ONLY TO SHOW THAT THE PRINCIPLES OF NATURAL JUSTICE ARE APPLICABLE WHEN ADVERSE CIVIL CONSEQUENCES ARE VISITED TO AN A SSESSEE. 4.8. IN DHARAM PAL PREM CHAND LTD. [2007] 295 ITR 105, THE DELHI HIGH COURT TOOK NOTE OF THE FACT SIT UATION WHERE THE ASSESSING OFFICER HAD PASSED AN ASSESSMENT ORDE R ON THE BASIS OF A REPORT OBTAINED FROM THE RESEARCH INSTIT UTE, NAMELY, SHRI RAM INSTITUTE FOR INDUSTRIAL RESEARCH, NEW DEL HI. THE ASSESSEE HAD FILED OBJECTIONS THERETO AND REQUESTED TO CROSS- EXAMINE THE ANALYST. THE ASSESSING OFFICER DID NOT PAY ANY HEED TO THE SAME AND PROCEEDED TO PASS ORDER OF ASS ESSMENT. THE ORDER OF ASSESSMENT WAS ASSAILED BY THE ASSESSE E BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) AND A CONT ENTION WAS RAISED THAT REQUEST TO CROSS-EXAMINE THE ANALYS T HAD NOT BEEN ALLOWED. THE COMMISSIONER OF INCOME-TAX (APPEA LS) ACCEPTED THE CONTENTION OF THE ASSESSEE AND CONCLUD ED THAT THE ASSESSING OFFICER HAD WRONGLY AVOIDED GRANTING PERMISSION MR. BINOD KUMAR SINGH 61 TO THE ASSESSEE TO CROSS-EXAMINE THE ANALYST AND HE LD THAT THE ORDER OF ASSESSMENT IS VITIATED IN LAW. 4.9. IN THE CASE OF PRAKASHCHAND NAHATA (SUPRA) T HE REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL DISMISSED THE APPEAL ON THE GROUND THAT IN THE ABSENCE OF GRANT OF PERMISSION TO CROSS-EXAMINE THE ANALYST WHO HAD PREPARED THE TEST REPORT THE ORDER OF ASSES SMENT WAS VULNERABLE. AGAINST THE ORDER OF THE TRIBUNAL THE R EVENUE APPROACHED HONBLE HIGH COURT, WHEREIN, WHILE DISMI SSING THE APPEAL, FILED BY THE REVENUE, HAS HELD AS UNDER (PA GE 108): THERE IS NO DOUBT THAT EVEN IF THE STRICT RULES OF EVIDENCE MAY NOT APPLY, THE BASIC PRINCIPLES OF NATURAL JUST ICE WOULD APPLY TO THE FACTS OF THE CASE. THE ASSESSING OFFICER PLACED RELIANCE UPON THE REPORT OF THE SHRI RAM INS TITUTE FOR INDUSTRIAL RESEARCH FOR DECIDING AGAINST THE AS SESSEE. THE REPORT CANNOT BE AUTOMATICALLY ACCEPTED PARTICU LARLY SINCE THERE IS A CHALLENGE TO IT AND THE ASSESSEE H AD SOUGHT PERMISSION TO CROSS-EXAMINE THE ANALYST MAKI NG THE REPORT. SINCE THE ASSESSING OFFICER DID NOT PER MIT THE CORRECTNESS OR OTHERWISE OF THE REPORT TO BE TESTED , THERE IS A CLEAR VIOLATION OF THE PRINCIPLES OF NATURAL J USTICE COMMITTED BY HIM IN RELYING UPON IT TO THE DETRIMEN T OF THE ASSESSEE. AS OBSERVED BY THE CONSTITUTION BENCH IN C.B. GAUTAM V. UNION OF INDIA , THAT, 'THE OBSER VANCE OF THE PRINCIPLES NATURAL JUSTICE IS THE PRAGMATIC REQUIREMENT OF FAIR PLAY IN ACTION' . 4.10. IN THE CASE AT HAND MOHD. RASHID WAS SUMMONE D AND HIS STATEMENT WAS RECORDED. A REQUEST WAS MADE BY THE ASSESSEE TO CROSS-EXAMINE HIM. THE SAME WAS NOT ALL OWED. ON A PERUSAL OF THE ASSESSMENT ORDER IT IS PERCEIVABLE THAT THE ASSESSING OFFICER HAS HEAVILY RELIED UPON THE STATE MENT OF MR. BINOD KUMAR SINGH 62 MOHD. RASHID. THE ASSESSING OFFICER HAS EXPRESSED T HE OPINION THAT THERE COULD NOT HAVE BEEN ANY TRANSACT ION BETWEEN M/S. RASHID AND CO., AS IT WAS A SMALL FIRM AND NOT ASSESSED TO INCOME-TAX. 4.11. IN THE OBTAINING FACTUAL MATRIX, THE SEMINAL QUESTION IS WHETHER THE SAID STATEMENT OF MOHD. RAS HID COULD HAVE BEEN UTILISED AGAINST THE ASSESSEE WITHOUT CAL LING HIM FOR CROSS-EXAMINATION. IT IS OF IMMENSE SIGNIFICANCE TH AT MOHD. RASHID HAS FILED AN AFFIDAVIT IN VARIANCE OF HIS OR IGINAL STATEMENT. THAT APART, THE ASSESSING OFFICER HAS IG NORED THE AFFIDAVIT AND ASCRIBED REASONS HOW THE TRANSACTION WITH THE SAID MOHD. RASHID WAS NOT WORTH GIVING CREDENCE. TH E GENUINENESS OF BILLS PRODUCED BY THE ASSESSEE HAS N OT BEEN ACCEPTED EXCLUSIVELY ON THE BASIS THAT THE SAID MOH D. RASHID WAS A SMALL BUSINESSMAN AND WAS NOT ASSESSED TO INC OME-TAX. THE AFORESAID CIRCUMSTANCES ELOQUENTLY SPEAK THAT T HE ADDITION IN THE ORDER OF ASSESSMENT HAS BEEN MADE O N THE BASIS OF THE STATEMENT MADE BY MOHD. RASHID. THERE IS NO CAVIL THAT A PRAYER WAS MADE UNDER SECTION 131 OF T HE ACT TO SUMMON THE SAID MOHD. RASHID FOR CROSS-EXAMINATION. THAT HAS NOT BEEN DONE. THE LANGUAGE EMPLOYED UNDER SECT ION 131 OF THE ACT EMPOWERS THE ASSESSING OFFICER TO EN SURE THE ATTENDANCE OF ANY PERSON. WHEN THE STATEMENT OF MOH D. RASHID WAS USED AGAINST THE ASSESSEE AND AN AFFIDAV IT WAS FILED CONTROVERTING THE SAME, WE THINK, IT WAS OBLI GATORY ON THE PART OF THE ASSESSING OFFICER TO ALLOW THE PRAYER F OR CROSS- EXAMINATION. THAT WOULD HAVE BEEN IN THE FITNESS OF THINGS AND IN COMPLIANCE WITH THE PRINCIPLES OF NATURAL JU STICE. MR. BINOD KUMAR SINGH 63 THE HONBLE HIGH COURT OF MADHYA PRADESH CONCLUDED AS UNDER:- IN VIEW OF THE AFORESAID WE ANSWER THE REFERENCE HO LDING THAT AS THE ASSESSING OFFICER HAD NOT SUMMONED MOHD . RASHID, THE PROPRIETOR OF M/S. RASHID AND CO., JABA LPUR, IN SPITE OF THE REQUEST MADE UNDER SECTION 131 OF THE ACT, THE EVIDENCE OF THE SAID MOHD. RASHID COULD NOT HAVE BE EN USED AGAINST THE ASSESSEE AND IN THE ABSENCE OF AFFORDIN G A REASONABLE OPPORTUNITY OF BEING HEARD BY SUMMONING THE SAID WITNESS THE ASSESSMENT ORDER IS VITIATED AND C ANNOT BE SAVED AS THE ADDITION HAS BEEN MADE ON THE FOUNDATI ON OF HIS DEPOSITION. IN THE RESULT, WE ANSWER THE REFERE NCE IN THE AFFIRMATIVE IN FAVOUR OF THE ASSESSEE AND AGAINST T HE REVENUE. THERE SHALL BE NO ORDER AS TO COSTS. SINCE, THE ASSESSEE IS A NON-RESIDENT DURING THE YE AR, THE AMOUNT FOUND DEPOSITED IN THE FOREIGN BANK CANNOT B E HELD TO BE TAXABLE IN INDIA, HENCE, IN VIEW OF THE FOREG OING DECISIONS AND THE UNCONTROVERTED FACTUAL MATRIX, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMIS SIONER OF INCOME TAX (APPEALS), ON THIS ISSUE, AND AFFIRMED T HE SAME. 5. THE NEXT GROUND RAISED BY THE ASSESSEE PERTAINS TO DELETING THE ADDITION OF RS.2,76,410/- ON ACCOUNT O F UNSUBSTANTIATED LIABILITY BY CONSIDERING THE ADDITI ONAL EVIDENCE IN CONTRAVENTION OF RULE-46A OF THE RULES. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE REVENUE IS ID ENTICAL TO THE GROUND WHEREAS, THE LD. COUNSEL FOR THE ASSESSE E DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 5.1. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION MR. BINOD KUMAR SINGH 64 DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT THE LD. AS SESSING OFFICER HAS DISCUSSED THE ISSUE IN PARA 27 (PAGE 33 ) OF THE ASSESSMENT ORDER BY HOLDING THAT THE ASSESSEE DID N OT FURNISH ANY EXPLANATION/EVIDENCE/CONFIRMATION WITH RESPECT TO THESE LIABILITIES, REPRESENTING THE AMOUNT DUE T O SHRI CMP SINGH (RS.1,70,000/-), ABHAY JHA (RS.95,000/-) AND SHRI RAJESH JHA (RS.20,000/-) AND MADE ADDITION U/S 68 O F THE ACT. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) E XAMINED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE SUCH AS LEDGER ACCOUNT OF SHRI CMP SINGH FOR THE PERIOD FROM 01/04 /2007 TO 31/03/2008, COPY OF BANK STATEMENT OF SHRI BINOD SINGH (ASSESSEE), IN SUPPORT OF REPAYMENT OF LIABILITY, C OPY OF CONFIRMATION ALONG WITH LEDGER ACCOUNT OF SHRI ABHA Y JHA FOR THE PERIOD 01/04/2007 TO 31/03/2008, COPY OF CONFIR MATION ALONG WITH LEDGER ACCOUNT OF SHRI RAJESH JHA FOR TH E SAME PERIOD AND UPON EXAMINATION OF EVIDENCE FOUND THE S AME IN ORDER. IN VIEW OF THIS UNCONTROVERTED FACTUAL FINDI NG, WE AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AS NO CONTRARY EVIDENCE WAS BROUGHT TO OU R NOTICE BY THE REVENUE, CONSEQUENTLY, THIS GROUND OF THE RE VENUE IS DEVOID OF ANY MERIT. 6. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.8,25,00,000/- MADE U/S 69 OF THE ACT IN CONTRAVE NTION OF RULE 46A OF THE RULES BY ACCEPTING ADDITIONAL EVIDE NCE. THE LD. DR, DURING HEARING, SUPPORTED THE CONCLUSION AR RIVED AT MR. BINOD KUMAR SINGH 65 IN THE ASSESSMENT ORDER AND CONSEQUENT ADDITION, WH EREAS, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCL USION ARRIVED AT IN THE IMPUGNED ORDER. 6.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE DOCUMENTS/PROOF FILED BEFORE THE LD. COMMISSIONER O F INCOME TAX (APPEALS), WHICH WAS CLAIMED TO BE ADDITIONAL E VIDENCE BY THE DEPARTMENT:- PROPERTY AT 9HZ, HADRIAN WAY, CHILWORTH, SOUTHAMPTON, U.K. (GBP 7,75,000)-RS. 7,00,00,000/-. COPY OF LOAN SANCTION LETTER (4,80,000 GBP) FOR PURCHASE AND AGAINST HYPOTHECATION OF THE PROPERTY AT 9HZ, HADRIAN WAY, CHILWORTH, SOUTHAMPTON, U.K. BEIN G PART OF THE SOURCE FOR THE PURCHASE. COPY OF LOAN SANCTION LETTER (2,11,200 GBP) FOR PURCHASE OF THE AFORESAID PROPERTY AND AGAINST HYPOTHECATION OF PROPERTY AT 29, RUSHDEN GARDENS ILFORD, ESSEX, U.K. BEING PART OF THE SOURCE FOR TH E PURCHASE. THE APPELLANT IN RESPECT OF ADDITION U/S 69 OF THE ACT RELATING TO RESIDENTIAL HOUSE AT 3 CIVIC WAY, ILFOR D. (GBP 284000)-RS.1,25,00,000/- HAS SUBMITTED THAT THE ASSESSING OFFICER HAS WITHOUT VERIFICATION ON FACTS , FRAMED THE ASSESSMENT WITHOUT APPLICATION OF MIND, IN A HAZARD MANNER, MADE THE IMPUGNED ADDITION IGNORING THE CRITICAL FACT THAT THE PROPERTY WAS PURCHASES I N A.Y. 2003-04 AS EVIDENCED BY COPY OF SALE DEED PLACED ON RECORD, WHICH HAS ALSO AVAILABLE WITH THE ASSESSING OFFICER. THUS, THIS ADDITION IS WHOLLY OPPOSED TO F ACTS AND LAW. IN ANY CASE THE ASSESSEE HAS ALSO PLACED O N MR. BINOD KUMAR SINGH 66 RECORD THE SOURCE OF INVESTMENT MADE OUT OF EARNING AND SAVING THEREOF ABROAD AND BEING NON RESIDENT THE SA ME IS NOT TAXABLE IN INDIA. THE APPELLANT IN RESPECT OF PROPERTY AT 9 HZ, HADRI AN WAY, CHILWORTH, SOUTHAMPTON, U.K (GBP 7,75,000) - R S. 7,00,00,0001- PURCHASED ON 30.8.2007 HAS SUBMITTED THAT THE SAME WAS PURCHASED OUT OF (I) LOAN OF GBP 4,80,0001 FROM BANKS AGAINST HYPOTHECATION OF THE PROPERTY AT 9 HZ, HADRIAN WAY, CHILWORTH, SOUTHAMPTON, U.K. (II) LOAN OF GBP 2,11,200 FROM BANKS AGAINST HYPOTHECATION OF PROPERTY AT 29, RUSHDEN PARDENS ILFORD, ESSEX, U.K- (III)BA1ANCE OF GBP 83,800 WAS PAID BY APPELLANT OU T OF OWN RESOURCES. THE APPELLANT IN SUPPORT OF THE AFORESAID HAS FILED (A) COPY OF LOAN SANCTION LETTER (4,80,000 GBP) FOR PURCHASE AGAINST HYPOTHECATION OF THE PROPERTY AT 9 HZ, HADRIAN WAY, CHILWORTH, SOUTHAMPTON, U.K.(B) COPY O F LOAN SANCTION LETTER (2,11,200 GBP) FOR PURCHASE OF THE AFORESAID PROPERTY AGAINST HYPOTHECATION OF PROPERT Y AT 29, RUSHDEN GARDENS ILFORD, ESSEX, U.K. THE APPELLANT HAS FURNISHED COMPLETE DETAILS AND EVIDENCE REGARDING SOURCE OF INVESTMENTS REPRESENTI NG HIS ACCUMULATED SAVINGS ABROAD OUT OF INCOMES EARNE D OVERSEAS AS NON RESIDENT. 6.2. ON THE BASIS OF THE ABOVE EVIDENCE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONCLUDED AS U NDER:- SINCE I HAVE HELD THAT THE APPELLANT TO BE A NON- RESIDENT, ALL MONEYS EARNED OVERSEAS ARE NOT TAXABL E MR. BINOD KUMAR SINGH 67 IN INDIA IN TERMS OF AND IN ACCORDANCE WITH SECTION 5 OF THE 1. T. ACT. ACCORDINGLY FOR THE REASON THAT THE SOURCE OF INVESTMENT IS ESTABLISHED AND THE APPELLANT HAS BEEN HE TO BE A NON RESIDENT, THE ADDITION OF RS 8,25,00,000/- REPRESENTING INVESTMENTS IN ACQUIRING IMMOVABLE PROPERTIES MADE BY THE AO IS DELETED. ACCORDINGLY THE APPELLANT SUCCEEDS IN THIS GROUND OF APPEAL NO 3.5 AND GETS A RE1IEF OF RS 8,25,00,000/-. AO IS DIRECTED TO GIVE EFFECT ACCORDINGLY . 6.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, THERE IS CATEGORICAL FI NDING IN THE IMPUGNED ORDER THAT THE SOURCE OF INVESTMENT MADE B Y THE ASSESSEE WAS ESTABLISHED/PROVED AND THE ASSESSEE DU RING THE RELEVANT PERIOD WAS NON-RESIDENT. IT IS ALSO NOTED THAT THE ACCOUNTS OF THE ASSESSEE WERE OPENED AND OPERATED I N THE STATUS OF NON-RESIDENT. THIS FACTUAL MATRIX WAS A LSO CONSENTED TO BE CORRECT BY THE DEPARTMENT. IT IS A LSO NOTED WHEN ANY ACCOUNTS IN THE STATUS OF NON-RESIDENT ARE OPENED AT THAT STAGE EVEN THE BANK AUTHORITIES ANALYZE THE PASSPORT AND OTHER DOCUMENTS OF THE ASSESSEE. WE FURTHER NO TE THAT FOR INITIAL YEARS, THE STATUS OF THE ASSESSEE AS NO N-RESIDENT WAS ACCEPTED BY THE DEPARTMENT ITSELF. DURING HEAR ING, THE LD. CIT-DR, FAIRLY ADMITTED THAT FOR A.Y. 2005-06, THE ASSESSEE WAS ASSESSED AS NON-RESIDENT, THEREFORE, W ITHOUT BRINGING ANY CONTRARY MATERIAL, ON THE PRINCIPLE OF CONSISTENCY ALSO, THE ASSESSEE IS HAVING A CASE IN ITS FAVOUR AS CONSISTENCY HAS TO BE MAINTAINED. SO FAR AS, THE DATE OF MR. BINOD KUMAR SINGH 68 ARRIVAL AND DEPARTURE ARE CONCERNED, BOTH THESE DAT ES ARE TO BE EXCLUDED WHILE COUNTING THE STAY IN INDIA, FOR W HICH WE ARE FORTIFIED BY THE DECISION FROM HONBLE KARNATAK A HIGH COURT IN 245 CTR 350 (KARNATAKA) DIT(IT) VS MANOJ K UMAR REDDY (2011) 201 TAXMAN 30(KAR)-(2011) 12 TAXMAN.CO M326 (KAR) AND ITO VS FAUSTA C. CORDEIRO (2012) 24 TAXMA N.COM 193 (MUM.). SO FAR AS, THE ISSUE OF CONSISTENCY IS CONCERNED, IT HAS TO BE FOLLOWED, FOR WHICH, WE HAVE FORTIFIED BY THE FOLLOWING DECISIONS. I. PARSHURAM POTTERY WORKS LTD. VS ITO 106 ITR 1 (SC) II. SECURITY PRINTERS 264 ITR 276(DEL.) III. CIT VS NEO POLYPACK PVT. LTD. 245 ITR 492 (DEL.) IV. CWT VS ALLIED FINANCE PVT. LTD. 289 ITR 318 (DEL.) V. BERGER PAINTS INDIA LTD. VS CIT 266 ITR 99 (SC) VI. DCIT VS UNITED VANASPATI (275 ITR 124) (AT)(CHANDIGARH ITAT) VII. UNION OF INDIA VS KUMUDINI N. DALAL 249 ITR 219 (SC ) VIII. UNION OF INDIA VS SATISH PANNALAL SHAH 249 ITR 221 IX. B.F.VARGHESE VS STATE OF KERALA 72 ITR 726 (KER.) X. CIT VS NARENDRA DOSHI 254 ITR 606 (SC) XI. CIT VS SHIVSAGAR ESTATE 257 ITR 59 (SC) XII. PRADIP RAMANLAL SETH VS UOI 204 ITR 866 (GUJ.) XIII. RADHASWAMY SATSANG VS CIT 193 ITR 321 (SC) XIV. AGGARWAL WAREHOUSING & LEASING LTD. 257 ITR 235 (MP) 6.4. THE SUM AND SUBSTANCE OF THE AFORESAID DECISI ONS IS THAT ON THE BASIS OF PRINCIPLE OF JUDICIAL DISCIPLI NE, MR. BINOD KUMAR SINGH 69 CONSISTENCY HAS TO BE FOLLOWED AND ONCE IN A PARTIC ULAR YEAR, IF ANY VIEW IS TAKEN, IN THE ABSENCE OF ANY CONTRAR Y MATERIAL, NO CONTRARY VIEW IS TO BE TAKEN AS FINALITY TO THE LITIGATION IS ALSO A PRINCIPLE WHICH HAS TO BE FOLLOWED. BEFORE U S, NO CONTRARY FACTS OR ANY ADVERSE MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE, THEREFORE, WE FIND NO INFIRMITY IN THE FINDING/CONCLUSION OF THE LD. FIRST APPELLATE AUTHO RITY. WE AFFIRM HIS VIEW BEING UNCONTROVERTED ON FACT. FINALLY, THIS APPEAL OF THE REVENUE IS HAVING NO ME RIT, THEREFORE, DISMISSED. 7. SO FAR AS, CROSS OBJECTION NO.149/MUM/2013 (AGAINST THE ITA NO.4597/MUM/2012) FILED BY THE ASS ESSEE, IS CONCERNED, THE SAME WAS NOT PRESSED BY THE LD. C OUNSEL, THEREFORE, THE CROSS OBJECTION OF THE ASSESSEE IS D ISMISSED AS NOT PRESSED. 8. SO FAR AS THE APPEAL OF THE REVENUE FOR A.Y. 20 07-08 (ITA NO.4596/MUM/2012) IS CONCERNED, THE ISSUES INV OLVED ARE IDENTICAL TO ITA NO.4597/MUM/2012) (A.Y. 2008-0 9), THEREFORE, ON THE SAME REASONING, WE FIND NO MERIT IN THE APPEAL OF THE REVENUE FOR THIS ASSESSMENT YEAR ALSO , THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 8.1. THE CROSS OBJECTION NO.148/MUM/2013 (AGAINST THE ITA NO.4596/MUM/2012) WAS NOT PRESSED BY THE LD . COUNSEL FOR THE ASSESSEE, THEREFORE, IT IS DISMISSE D AS NOT PRESSED. MR. BINOD KUMAR SINGH 70 9. NOW, WE SHALL TAKE UP ITA NO.4598/MUM/2012 (A.Y. 2009-10), THE APPEAL OF THE REVENUE, WHEREIN, IDENTICAL GROUNDS HAVE BEEN RAISED. WE HAVE MADE ELABORATE DISCUSSIONS ON FACTS ON THE ISSUES IN HAND IN PRECE DING PARAS OF THIS ORDER, THEREFORE, ON THE SAME REASONING, WE FIND NO MERIT IN THIS APPEAL ALSO, THEREFORE, DISMISSED. 9.1. THE CROSS OBJECTION NO.150/MUM/2013 (AGAINST THE ITA NO.4598/MUM/2012) WAS NOT PRESSED BY THE LD . COUNSEL FOR THE ASSESSEE, THEREFORE, IT IS DISMISSE D AS NOT PRESSED. 10. SO FAR AS, THE APPEAL OF THE REVENUE FOR A.Y. 2003- 04 (ITA NO.5530/MUM/2012) IS CONCERNED, IDENTICAL G ROUND HAVE BEEN RAISED, THEREFORE, ON THE SAME REASONING AS DISCUSSED IN PRECEDING PARAS OF THIS ORDER, ON IDEN TICAL FACTS/GROUNDS, THIS APPEAL OF THE REVENUE IS DISMIS SED. IT IS ALSO NOTED THAT FOR A.Y. 2003-04, THE STATUS OF THE ASSESSEE WAS NON-RESIDENT AND WAS ACCEPTED BY THE DEPARTMENT . 10.1 SO FAR AS C.O. NO.212/MUM/2013 (AGAINST THE IT A NO.5530/MUM/2012) IS CONCERNED, IT WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE DISMISSED A S NOT PRESSED. 11. IDENTICAL IS THE SITUATION FOR THE APPEAL OF T HE REVENUE IN ITA NO.5531/MUM/2012 (A.Y. 2004-05), THEREFORE, ON THE SAME REASONING, WE FIND NO MERIT IN THIS APPEAL ALSO, THEREFORE, DISMISSED. MR. BINOD KUMAR SINGH 71 11.1 IDENTICALLY, C.O. NO.213/MUM/2013 (A.Y. 2004- 05) WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE , THEREFORE, IT IS DISMISSED AS NOT PRESSED. 12. THE APPEAL FOR A.Y. 2005-06 (ITA NO.5532/MUM/2012), BEING ON IDENTICAL GROUND, IS AL SO DESERVES TO BE DISMISSED ON THE SAME REASONING. 13. C.O. NO.214/MUM/2013 (A.Y. 2005-06) WAS NOT PRE SSED BY THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, DIS MISSED AS NOT PRESSED. 14. NOW, WE SHALL TAKE UP ITA NO.6143/MUM/2012 (A.Y. 2006-07), WHEREIN, THE GROUNDS ARE IDENTICAL. HOWEVER, IN THIS CASE, THE FIRST ISSUE PERTAINS TO RESIDENT BUT NOT ORDINARILY RESIDENT AS DEFINED U/S 6(6)(A) OF THE A CT IGNORING THE REPORT OF THE ASSESSING OFFICER AS THE ASSESSEE WAS NOT RESIDENT IN NINE OUT OF TEN PREVIOUS YEARS AND FURT HER THE APPEAL OF THE DEPARTMENT ON THE POINT OF STATUS IS PENDING FOR A.Y. 2003-04 TO 2005-06 AND 2007-08 TO 2009-10. IDENTICAL ARGUMENT WAS RAISED BY THE LD. CIT-DR. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE, DEFEN DED THE CONCLUSION IN THE IMPUGNED ORDER. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OBSERVATI ON MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO T HE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MAT ERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RES PECTIVE MR. BINOD KUMAR SINGH 72 COUNSEL, IF KEPT IN JUXTAPOSITION AND ANALYZED, THE ONLY DISTINGUISHED FEATURE IN THIS GROUND IS THAT THE AS SESSEE IS A RESIDENT BUT NOT ORDINARILY RESIDENT. THE STAY OF THE ASSESSEE, DURING THE RELEVANT FINANCIAL YEAR IS 209 DAYS (AS SUMMARIZED ABOVE (TABLE). TO EXPRESS OUR OPINION, THE STATUS OF THE ASSESSEE FOR EARLIER AND LATER YEAR NEEDS TO BE EXA MINED WITH THE HELP OF VARIOUS CASE LAWS. THE ISSUE OF NOT OR DINARILY RESIDENT HAS BEEN DEFINED IN SECTION 6(6) OF THE AC T. BEFORE COMING TO ANY CONCLUSION, WE SHOULD UNDERSTAND THE LEGISLATIVE HISTORY. THE LAW COMMISSION RECOMMENDED THE TOTAL ABOLITION OF THE PROVISIONS OF SECTION 4B OF THE 1922 ACT DEFINING 'ORDINARY RESIDENCE' OF THE TAXABLE ENTITI ES. THE INCOME-TAX BILL, 1961 (BILL NO. 27 OF 1961), THEREF ORE, DID NOT CONTAIN ANY SUCH PROVISION. ON THE LEGISLATIVE ANVI L, IT WAS FELT NECESSARY TO KEEP THE PROVISIONS OF SECTION 4B OF THE 1922 ACT IN FACT AND, THEREFORE, SECTION 6(6) HAD TO BE ENACTED IN THE 1961 ACT. 16. SECTION 6(6) CONSISTS OF TWO LIMBS. IT DOES NOT DEFINE 'ORDINARILY RESIDENT' BUT DEFINES, IN NEGATIVE, 'NO T ORDINARILY RESIDENT'. ON READING THE CORRESPONDING PROVISIONS IN THE TWO ACTS, IT SEEMS THAT THERE IS LITTLE SUBSTANTIAL CHANGE IN THE PROVISIONS. CLAUSE (A) MAKES AN INDIVIDUAL 'NOT ORD INARILY RESIDENT' IF HE HAS NOT BEEN RESIDENT IN INDIA IN N INE OUT OF THE TEN PRECEDING PREVIOUS YEARS OR HAS NOT, DURING THE SEVEN PRECEDING PREVIOUS YEARS, BEEN IN INDIA FOR A TOTAL PERIOD OF AT MR. BINOD KUMAR SINGH 73 LEAST 730 DAYS OR MORE. CLAUSE (B) MAKES A HINDU UN DIVIDED FAMILY 'NOT ORDINARILY RESIDENT' IF ITS MANAGER* HAS NOT BEEN RESIDENT IN INDIA IN NINE OUT OF THE TEN PRECEDING PREVIOUS YEARS OR HAS NOT, DURING THE SEVEN PRECEDING PREVIO US YEARS, BEEN IN INDIA FOR A TOTAL PERIOD OF AT LEAST 730 DA YS OR MORE. ALTHOUGH THE CHANGE IS THERE IN THE PHRASEOLOGY, TH ERE IS NO CHANGE IN THE PRESCRIPTIONS. SECTION 4B(C) OF THE 1 922 ACT, WHICH DID NOT MAKE ANY DISTINCTION BETWEEN A 'RESID ENT' AND 'RESIDENT BUT NOT ORDINARILY RESIDENT', IN THE CASE OF A COMPANY, FIRM OR OTHER ASSOCIATION OF PERSONS, FIND S NO PLACE IN THE 1961 ACT. IN THE FACTS OF DR. SURMUKH SINGH UPPAZ V. CIT [(19 83) 144 ITR 191 (PUNJ)], A CASE UNDER THE 1922 ACT PROVISIO NS IT WAS HELD THAT THE STATUS OF THE ASSESSEE WAS CORRECTLY TAKEN AS 'RESIDENT BUT NOT ORDINARILY RESIDENT' NEGATIVING A SSESSEE'S CONTENTION THAT HIS STATUS SHOULD BE TAKEN AS 'NON- RESIDENT'. ENQUIRY IS NECESSARY ONLY IF THE ASSESSEE HAS BEEN FOUND TO BE A RESIDENT. THE ENQUIRY WHETHER OR NOT AN INDIVIDUA L OR A HINDU UNDIVIDED FAMILY IS 'ORDINARILY RESIDENT' OR 'NOT ORDINARILY RESIDENT' IS NEEDED ONLY AFTER IT IS FOU ND THAT HE OR IT IS 'RESIDENT' WITHIN THE MEANING OF SECTION 6(1) OR 6(2), AS THE CASE MAY BE. IF IT IS ASCERTAINED, ON FACTS, THAT T HE ASSESSEE IS NON-RESIDENT, NO SUCH ENQUIRY IS NEEDED AT ALL. THE ONLY DIFFERENCE IN THE INCIDENCE OF INCOME-TAX ON A 'RESIDENT AND ORDINARILY RESIDENT' ASSESSEE ON THE ONE HAND A 'RESIDENT AND NOT ORDINARILY RESIDENT' ASSESSEE ON THE OTHER HAND IS IN RESPECT OF FOREIGN INCOME. IN THE FORMER CASE IT IS MR. BINOD KUMAR SINGH 74 LIABLE TO BE INCLUDED IN THE TOTAL INCOME ASSESSABL E; IN THE LATTER CASE IT IS NOT SO INCLUDIBLE UNLESS IT IS DE RIVED FROM A BUSINESS CONTROLLED IN, OR A PROFESSION SET UP, IN INDIA [SEE SECTION 5(1)]. REVERSING THE PROVISIONS CONTAINED IN SECTION 6(6), IT MAY BE SEEN THAT A PERSON IS 'RESIDENT AND ORDINARILY RESI DENT' IN INDIA IN A PREVIOUS YEAR, ONLY- (I) IF HE IS AN INDIVIDUAL, (A) HE HAS BEEN RESIDEN T IN INDIA IN NINE OUT OF THE TEN PREVIOUS YEARS PRECEDING THAT Y EAR AND (NOT OR) (B) DURING THE SEVEN PREVIOUS YEARS PRECEDING T HAT YEAR HE HAS BEEN IN INDIA FOR A TOTAL PERIOD OF SEVEN HUNDR ED AND THIRTY DAYS OR MORE; (II) IF IT IS A HINDU UNDIVIDED FAMILY, (A) ITS MAN AGER HAS BEEN RESIDENT IN INDIA IN NINE OUT OF TEN PREVIOUS YEARS PRECEDING THAT YEAR AND (NOT OR) (B) DURING THE SEVEN YEARS P RECEDING THAT YEAR HE HAS BEEN IN INDIA FOR A TOTAL PERIOD OF SEV EN HUNDRED AND THIRTY DAYS OR MORE (CN. TOWNSEND V. CIT, (1974 ) 97 ITR 185 (PAT); K.M.N.N. SWAMINATHAN CHETTIAR V. CLT, (1 947) 15 ITR 418 (MAD); P.B.I. BAVA V. CIT, (1955) 27 ITR 46 3 (TRA-CO). THE FOLLOWING DEPARTMENTAL CIRCULAR IS RELEVANT ON THE POINT:- C.I.T., W.B.'S CIRCULAR LETTER NO. JI2832014A110151 58-59, DATED CALCUTTA, THE 5TH DECEMBER, 1962, ADDRESSED T O THE SECRETARY, INDIAN CHAMBER OF COMMERCE, CALCUTTA- 1.-I AM DIRECTED TO REFER TO THE CORRESPONDENCE RES TING WITH THE MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) LETTER NO. MR. BINOD KUMAR SINGH 75 4122/61-IT(AT), DATED 25TH NOVEMBER, 1961, AND TO S TATE THAT THE DEPARTMENT'S VIEW HAS ALL ALONG BEEN THAT AN IN DIVIDUAL IS 'NOT ORDINARILY RESIDENT' UNLESS HE SATISFIES BOTH THE CONDITIONS IN SECTION 4B(A), I.E.,- (I) HE MUST HAVE BEEN A RESIDENT IN NINE OUT OF TEN PRECEDING YEARS; AND (II) HE MUST HAVE BEEN IN INDIA FOR MORE THAN TWO Y EARS IN THE PRECEDING SEVEN YEARS. THUS, A PERSON WILL BE 'RESIDENT AND ORDINARILY RES IDENT' IF BOTH THESE CONDITIONS ARE SATISFIED BUT HE WILL BE 'RESI DENT BUT NOT ORDINARILY RESIDENT' IF EITHER OF THOSE CONDITIONS IS NOT SATISFIED.' THUS, A PERSON WILL BECOME RESIDENT AND ORDINARILY RESIDENT ONLY IF (A) HE HAS BEEN 'RESIDENT' IN NINE OUT OF TEN PRECE DING PREVIOUS YEARS, AND (B) HAS BEEN IN INDIA FOR AT LEAST 730 DAYS IN THE SEVEN PRECEDING PREVIOUS YEARS; AND HE WILL BE TREATED AS RESIDENT BUT NOT ORDINARILY RESIDENT IF EITHER OF THESE COND ITIONS IS NOT FULFILLED [ADVANCE RULING APPLICATION NO. P-5 OF 19 95, IN RE, (1997) 223 ITR 379, 385 (AAR)]. IN THE FACTS OF THA T CASE, IT HAS BEEN HELD THAT THE APPLICANT WILL HAVE THE STATUS O F A RESIDENT BUT NOT ORDINARILY RESIDENT FOR ASSESSMENT YEARS 19 96-97 TO 2004-05. ALSO SEE, ADVANCE RULING APPLICATION NO. P -12 OF 1995, IN RE, (1997) 228 ITR 61,66 (AAR). IN MORGENSTERN WERNER V. CIT [(1998) 233 ITR 751, 7 55 (ALL), AFFIRMED IN CIT V. MORGENSTERN WERNER, (2003 ) 259 ITR MR. BINOD KUMAR SINGH 76 486 (SC)], THE PETITIONER, A FOREIGN TECHNICIAN HAS BEEN HELD TO BE 'NOT ORDINARILY RESIDENT'. IT IS PERTINENT TO NOTE THAT THE PROPOSED ABOLITION (W.E.F. 1-4-1999) OF THE SPECIAL CATEGORY OF 'NOT ORDINARIL Y RESIDENT' BY THE FINANCE (NO. 2) BILL, 1998, HAS BEEN WITHDRAWN BY THE FINANCE MINISTER ON 17-7-1998 WHILE INTRODUCING IN LOK SABHA NOTICE OF AMENDMENTS TO THE FINANCE (NO. 2) B ILL, 1998. THUS, SUCH SPECIAL CATEGORY HAS BEEN RETAINED. IN PRADIP J. MEHTA V. CIT [(2002) 256 ITR 647, 65 4, 656- 57 (GUJ), SPECIAL LEAVE PETITION GRANTED BY THE SUP REME COURT: (2002) 257 ITR (ST.) 35 (SC)], IT HAS BEEN HELD THA T SECTION 6(6) DOES NOT DEFINE 'ORDINARILY RESIDENT IN INDIA' BUT DESCRIBES 'NOT ORDINARILY RESIDENT' IN INDIA. IT RESORTS TO THE CO NCEPT 'RESIDENT IN INDIA' FOR WHICH THE CRITERIA ARE LAID DOWN IN S ECTION 6(1). 'ORDINARILY RESIDENT' FOR THE PURPOSES OF INCOME-TA X CONNOTES RESIDENCE IN A PLACE WITH SOME DEGREE OF CONTINUITY AND APART FROM ACCIDENTAL OR TEMPORARY ABSENCES. WHEN AN INDI VIDUAL HAS BEEN A RESIDENT IN INDIA FOR NINE OUT OF TEN PR ECEDING YEARS, THEN IN ORDER TO ESCAPE TAX ON HIS FOREIGN I NCOME, HE MUST NOT HAVE BEEN IN INDIA FOR 730 DAYS OR MORE IN THE AGGREGATE DURING THE PRECEDING SEVEN YEARS. THE TES T IS ONE OF PRESENCE AND NOT ABSENCE FROM INDIA AND THE LENGTH OF PRESENCE WILL DETERMINE WHEN AN INDIVIDUAL IS 'NOT ORDINARILY RESIDENT' IN INDIA. IN ORDER THAT AN INDIVIDUAL IS NOT AN ORDINARILY RESIDENT, HE SHOULD SATISFY ONE OF THE T WO CONDITIONS LAID DOWN IN SECTION 6(6)(A), THE FIRST CONDITION I S THAT HE MR. BINOD KUMAR SINGH 77 SHOULD NOT BE RESIDENT IN INDIA IN ALL THE NINE OUT OF TEN YEARS PRECEDING THE PREVIOUS YEAR AND THE SECOND CONDITIO N IS THAT HE SHOULD NOT HAVE DURING THE SEVEN YEARS PRECEDING THAT YEAR, BEEN IN INDIA FOR A TOTAL PERIOD OF 730 OR MO RE DAYS. IN THE FACTS OF THAT CASE, THE TRIBUNAL HAS FOUN D (PP. 656-57) AS A FACT THAT THE ASSESSEE WAS A RESIDENT IN INDIA FOR 8 YEARS OUT OF 10 PRECEDING YEARS AND HIS CASE, THE REFORE, CANNOT FALL UNDER THE FIRST PART OF SECTION 6(6)(A) . HIS CASE WILL ALSO NOT FALL IN THE SECOND PART OF THAT SECTION, B ECAUSE, IN THE 7 YEARS PRECEDING THE RELEVANT PREVIOUS YEAR, THE A SSESSEE HAD BEEN IN INDIA FOR 1402, I.E., MUCH MORE THAN 730 DA YS BEING THE UPPER LIMIT REFERRED TO IN THAT BEHALF. THEREFO RE, THE HIGH COURT WAS OF THE OPINION (P. 657) THAT THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE STATUS OF THE ASSESSE E FOR THE YEAR IN QUESTION WAS NOT THAT OF 'NOT ORDINARILY RESIDEN T' AS CLAIMED BY HIM AND THAT THE TRIBUNAL HAS NOT COMMITTED ANY ERROR IN INTERPRETING THE PROVISIONS OF SECTION 6(6). REVERSING THE DECISION OF GUJARAT HIGH COURT [256 I TR 647 (GUJ)], IN PRADIP J. MEHTA V. CIT [(2008) 300 I TR 231 (SC)], IT HAS BEEN HELD THAT THE ASSESSEE WAS 'NOT ORDINAR ILY RESIDENT' IN INDIA WITHIN THE MEANING OF SECTION 6(6)(A) AS H E WAS NOT RESIDENT FOR 9 OUT OF 10 YEARS. A PERSON WOULD BECO ME AN ORDINARY RESIDENT ONLY (1) IF HE HAD BEEN RESIDING IN INDIA IN 9 OUT OF 10 PRECEDING YEARS, AND (2) HE HAD BEEN IN I NDIA FOR AT LEAST 730 DAYS IN THE PREVIOUS SEVEN YEARS. MR. BINOD KUMAR SINGH 78 EFFECT OF THE SUBSTITUTION (W.E.F. 1-4-2004) OF SEC TION 6(6) BY THE FINANCE ACT, 2003.-SECTION 6(6) HAS NEWLY BE EN SUBSTITUTED (W.E.F. 1-4-2004) BY THE FINANCE ACT, 2 003 (32 OF 2003) [FOR THE TEXT OF SO-SUBSTITUTED SECTION 6(6), SEE, ANTE]. ON A COMPARISON OF THE PHRASEOLOGY EMPLOYED IN THE THE N EXISTING SECTION 6(6), AND THE NEWLY SUBSTITUTED SECTION 6(6 ), THE FOLLOWING POINTS OF DIFFERENCE EMERGE: SL. NO. SECTION EXISTING PROVISION SUBSTITUTED (1) 6(6)(A) HAS NOT RESIDENT HAS BEEN A NON-RESIDEN T (2) 6(6)(A) HAS NOT DURING HAS DURING (3) 6(6)(A) SEVEN HUNDRED AND THIRTY DAYS OR MORE SEVEN HUNDRED AND TWENTY NINE DAYS OR LESS (4) 6(6)(B) HAS NOT BEEN RESIDENT HAS BEEN A NON-RE SIDENT (5) 6(6)(B) HAS NOT DURING HAS DURING (6) 6(6)(B) SEVEN HUNDRED AND THIRTY DAYS OR MORE SEVEN HUNDRED AND TWENTY NINE DAYS OR LESS TO PUT IT DIFFERENTLY, ACCORDING OF SECTION 6(6)(A) , AN INDIVIDUAL IS SAID TO BE 'NOT ORDINARILY RESIDENT' IN INDIA IN ANY PREVIOUS YEAR IF HE- -(UPTO ASSESSMENT YEAR 2003-04) HAS NOT BEEN RESIDE NT -(FOR AND FROM ASSESSMENT YEAR 2004-05) HAS BEEN A NON- RESIDENT IN INDIA IN 9 OUT OF THE 10 PREVIOUS YEARS PRECEDING THAT YEAR, OR -(UPTO ASSESSMENT YEAR 2003-04) HAS NOT -(FOR AND FROM ASSESSMENT YEAR 2004-05) HAS DURING THE 7 PREVIOUS YEARS PRECEDING THAT YEAR BEEN IN INDIA FO R A PERIOD OF, OR PERIODS AMOUNTING IN ALL TO,- MR. BINOD KUMAR SINGH 79 -(UPTO ASSESSMENT YEAR 2003-04) 730 DAYS OR MORE -(FOR AND FROM ASSESSMENT YEAR 2004-05) 729 DAYS OR LESS. ACCORDING TO SECTION 6(6)(B), A HINDU UNDIVIDED FAM ILY IS SAID TO BE 'NOT ORDINARILY RESIDENT' IN INDIA IN ANY PREV IOUS YEAR IF ITS MANAGER- -(UPTO ASSESSMENT YEAR 2003-04) HAS NOT BEEN RESIDE NT -(FOR AND FROM ASSESSMENT YEAR 2004-05) HAS BEEN A NON- RESIDENT IN INDIA IN 9 OUT OF THE 10 PREVIOUS YEARS PRECEDING THAT YEAR, OR -(UPTO ASSESSMENT YEAR 2003-04) HAS NOT -(FOR AND FROM ASSESSMENT YEAR 2004-05) HAS DURING THE 7 PREVIOUS YEARS PRECEDING THAT YEAR BEE N IN INDIA FOR A PERIOD OF, OR PERIODS AMOUNTING IN ALL TO,- -(UPTO ASSESSMENT YEAR 2003-04) 730 DAYS OR MORE -(FOR AND FROM ASSESSMENT YEAR 2004-05) 729 DAYS OR LESS. IT IS EVIDENT FROM THE WORD 'OR', OCCURRING FOR THE FIRST TIME IN SUB-CLAUSE (A) OR (B) OF CLAUSE (6) OF SECTION 6 , THAT THE TWO CONDITIONS CONTEMPLATED IN THOSE SUB-CLAUSES ARE AL TERNATE AND THESE ARE NOT CUMULATIVE. THE FULFILLMENT OF EI THER OF THE CONDITIONS WOULD BE SUFFICIENT TO TREAT AN INDIVIDU AL OR A HINDU UNDIVIDED FAMILY AS 'NOT ORDINARILY RESIDENT' IN IN DIA. MR. BINOD KUMAR SINGH 80 SECTION 6(6) WAS AMENDED BY THE FINANCE ACT 2003, W ITH EFFECT FROM 1-4-2004. AS A RESULT OF THE SAID AMEND MENT, AN INDIVIDUAL THOUGH RESIDENT, IS NOT ORDINARILY RESID ENT IN ANY PREVIOUS YEAR: (1) EITHER WHERE HE HAS NOT BEEN RESIDENT, I.E., HA S BEEN A NON- RESIDENT IN 9 OUT OF 10 PREVIOUS YEARS PRECEDING TH AT PREVIOUS YEAR; (2) OR WHERE HE HAS NOT BEEN IN INDIA (I.E., HAS BE EN ABSENT FROM INDIA) FOR 730 DAYS OR MORE DURING THE SEVEN P REVIOUS YEARS PRECEDING THAT YEAR. EVEN THOUGH THE DEPARTME NTAL CIRCULAR NO. 7 OF 2003 STATES THAT THE AMENDMENT WA S MADE IN ORDER TO REMOVE DOUBTS ABOUT THE INTERPRETATION OF THE SECTION AND IT IS CLARIFICATORY IN NATURE, NEVERTHE LESS, IT HAS BEEN MADE APPLICABLE ONLY FROM 1-4-2004. THE SAID AMENDMENT CANNOT BE HELD TO BE CLARIFICATORY, AS TH E RESIDENTIAL STATUS OF AN ASSESSEE DETERMINES THE TA X BURDEN OF THE ASSESSEE. THUS, THE SAID AMENDMENT CAN BE HELD ONLY AS SUBSTANTIVE IN NATURE AND CANNOT BE GIVEN RETROSPEC TIVE EFFECT [CIT V. KARAN BIHARI THAPAR, (2011) 335 ITR 541 (DE L)]. IF THE TOTALITY OF FACTS, AND THE JUDICIAL PRONOUNCEMENTS, DISCUSSED HEREINABOVE AND MORE SPECIFICALLY, DURING THE EARLI ER AND LATER YEARS, THE ASSESSEE WAS PRACTICALLY RESIDING ABROAD , THEREFORE, IT CAN BE CONCLUDED THAT THE CONTROLLING MANAGEMENT OF THE ASSESSEE DURING THE AFORESAID PERIOD REMAINED ABROA D AND FURTHER THE FACTUAL FINDING RECORDED BY THE LD. FIR ST APPELLATE AUTHORITY WAS NEITHER CONTROVERTED BY THE DEPARTMEN T NOR ANY ADVERSE MATERIAL WAS PRODUCED BEFORE US, IN SUPPORT OF THE MR. BINOD KUMAR SINGH 81 ASSERTION MADE BY THE REVENUE, CONSEQUENTLY, THE AS SESSEE IS NOT AN ORDINARY RESIDENT, THUS, WE AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). FINALLY, THE APPEALS OF THE REVENUE AND THE CROSS OBJECTIONS OF THE ASSESSEE, ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 18/12/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; ( DATED :18/12/2015 F{X~{T? P.S/. .. !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34.$ ! , 0 *+'*! 5 , / DR, ITAT, MUMBAI 6. 6'7 / GUARD FILE. ! / BY ORDER, /3+$.$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI