ITO, Faridabad v. Sh. Jalesh Kumar Rawal,, Faridabad

ITA 3742/DEL/2009 | 2006-2007
Pronouncement Date: 18-02-2010 | Result: Dismissed

Appeal Details

RSA Number 374220114 RSA 2009
Assessee PAN AEJPR9634Q
Bench Delhi
Appeal Number ITA 3742/DEL/2009
Duration Of Justice 5 month(s) 15 day(s)
Appellant ITO, Faridabad
Respondent Sh. Jalesh Kumar Rawal,, Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 18-02-2010
Date Of Final Hearing 18-02-2010
Next Hearing Date 18-02-2010
Assessment Year 2006-2007
Appeal Filed On 03-09-2009
Judgment Text
ITA NO. 3742/DEL/2009 A.Y. 2006-07 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 3742/DEL/2009 A.Y. : 2006-07 INCOME TAX OFFICER VS. SHRI JALESH KUMAR RA WAL WARD-I(3) FARIDABAD H.NO. 65 SECTOR-15 FARIDABAD [PAN: AEJPR9634Q] (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJEEV GROVER CA DEPARTMENT BY : SHRI AROOP KR. SINGH SR. DR O R D E R PER SHAMIM YAHYA : AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A) DATED 14.7.2009 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. CIT(A) ERRED IN DEL ETING THE ADDITION OF RS. 12 79 609/- MADE BY THE AO. 3. IN THIS CASE THE BRIEF FACTS ARE THAT THE ASSESS EE FILED HIS RETURN OF INCOME AT A LOSS OF RS. 64 086/- ON 31.7. 2006. THE AO IN THE PROCEEDINGS U/S 143(3) ENQUIRED INTO THE LOSS. IT WAS SUBMITTED THAT THE ASSESSEE (E NO. 18249) OF INFOSY S TECHNOLOGIES LIMITED WAS ON A SECONDMENT TO INFOSYS TECHNOLOGIES (CHINA) COMPANY LIMITED AT SHANGHAI PRC IN THE PERIOD BET WEEN OCTOBER 2004 TO JULY 2006. THE AO ALSO ENQUIRED INTO THE AMOUNT OF ITA NO. 3742/DEL/2009 A.Y. 2006-07 2 RS. 3 00 000/- AS LEAVE ENCASHMENT EXEMPTION SHOWN IN THE FORM NO. 16 U/S 10(10AA) OF THE INCOME TAX ACT 1961. T HE ASSESSEES COUNSEL VIDE LETTER DATED 01.02.2008 STATED THAT S HRI SURJIT KUMAR RAWAL FATHER OF THE ASSESSEE GAVE A LOAN OF RS. 3 00 000/- TO HIS SON IN SUPPORT OF WHICH CONFIRMATION FROM SHRI SUR JIT KUMAR RAWAL WAS ATTACHED FOLLOWED BY HIS BANK STATEMENT. TO THE A.O.S CONCLUSION THAT THE ASSESSEES CASE WAS COVERED UND ER SECTION 80RRA THE ASSESSEE HAD REPLIED THAT IT WAS NOT APP LICABLE TO THE ASSESSEE DURING THE YEAR BECAUSE HE WAS A NON-RESID ENT AND HIS SALARY RECEIVED FROM THE FOREIGN EMPLOYER COULD NO T BE BROUGHT TO TAX. THE AO HAS REPRODUCED THE PROVISIONS OF SECT ION 80RRA IN HIS EFFORTS TO ESTABLISH THAT THE WHOLE REMUNERATION FO R THE ASSESSMENT YEAR 2006-07 IN THE INSTANT CASE WAS TAXABLE. ALSO HE INFERRED THE WORDS STARTING FORM WHO IS A CITIZEN OF INDIA IN SECTION 80RRA TO BE OF WIDER IMPORT THAN THAT OF RESIDENT OR NON-RES IDENT ETC. AND THE CASE OF THE ASSESSEE AS PER LETTER DATED 03.09 .2004 FROM INFOSYS TECHNOLOGICAL LIMITED BANGALORE PERTAINING TO SECONDMENT OF THE ASSESSEE IN INFOSYS CHINA CLEARLY SPOKE THA T THE REMUNERATION OF THE ASSESSEE WAS COVERED U/S 80RRA OF THE INCOME TAX ACT 1961 WHICH CONFIRMED THAT WHOLE REMUNERAT IONS BROUGHT BY THE ASSESSEE IN INDIA IN CONVERTIBLE FOREIGN EXC HANGE WERE TAXABLE FOR THE ASSESSMENT YEAR IN QUESTION. THE A O EXAMINED THE COMPUTATION OF INCOME MADE BY THE ASSESSEE IN THE R ETURN OF INCOME WHICH DECLARED A LOSS OF RS. 64 086/- AND ASSESSED IT AT POSITIVE INCOME OF RS. 12 15 520/- WHICH HAS THE R ESULT OF ITA NO. 3742/DEL/2009 A.Y. 2006-07 3 DETECTION OF CONCEALED INCOME ON THE PART OF THE ASSESSEE AMOUNTING TO ADDITION OF RS. 12 79 609/-. 4. UPON ASSESSEES APPEAL LD. CIT(A) ELABORATELY CO NSIDERED THE SUBMISSIONS AND HELD AS UNDER:- 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND PERUSED THE IMPUGNED ORDER OF ASSESSMENT. I HAVE ALSO EXAMINED THE FACTS OF THE CASE WITH REFERENCE TO THE PROVISIONS OF SECTION 9 AS WELL AS THE DEDUCTION AVAILABLE U/S 80RRA. IT IS FOUND THAT T HE ASSESSES CASE DOES NOT FALL UNDER THE PROVISIONS OF SECTION 80RRA UNDER WHICH DEDUCTION WAS ALSO NOT CLAIMED BY THE ASSESSEE BUT THE AO HAS COMPULSIVELY TREATED THE ASSESSEE U/S 80RRA BY UNNECESSARILY DWELLING UPON THE ISSUE OF CITIZENSHI P WHILE IT WAS CLEARLY A CASE OF A NON-RESIDENT ASSESSEE WHICH IS DEFINED AS PER THE PROVISIONS OF SECTION 6 TO 9 OF THE INCOME TAX ACT 1961 WHICH DE AL WITH THE RESIDENCE IN INDIA AND INCOME DEEMED TO ACCRUE OR ARISE IN INDIA AND WHICH ARE THE ONLY RELEVANT CONSIDERATIONS FOR THE TAXABILITY OF AN IN COME AS PER THE PROVISIONS OF SECTION 5 OF THE INCOME TA X ACT 1961. THE DOCUMENTS ATTACHED BY THE LD. AR CLEARLY ESTABLISH THAT THE ASSESSEE A SOFTWARE ENGINEER WAS NON-RESIDENT DURING THE YEAR UNDER CONTEXT AND HENCE THE FOREIGN REMITTANCES RECEIVED BY THE ASSESSEE WERE NOT TAXABLE FOR THE ASSESSMENT YEAR 2006-07 UNDER REFERENCE. THE LOSS OF RS. 64 086/- RETURNED BY THE ASSESSEE AROSE ON ACCOUNT OF INTEREST PAID ON BORROWED CAPITAL TO THE EXTENT OF RS. 1 01 904/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY AFTER SETTING OFF A SALARY INCOME OF RS. 27 968/- AND BANK INTEREST ETC. OF RS. 9 850/-. THE AMOUNT OF RS. 3 00 000/- SHOWN AS EXEMPT INCOME UNDER THE HEAD LEAVE ENCASHMENT IN THE ORIGINAL RETURN WAS SUBSEQUENTLY SHOWN AS BORROWED AMOUNT FROM THE ASSESSES FATHER IN THE REVISED RETURN FILED ON 19.10.2007 BECAUSE THROUGH AN OVER- ITA NO. 3742/DEL/2009 A.Y. 2006-07 4 SIGHT IN READING IN THE FORM NO. 16 THE MISTAKE W AS FOUND TO HAVE OCCURRED DUE TO THE CONFUSION BECAUS E DURING THE FINANCIAL YEAR 2005-06 THE ASSESSEE TOO K A SUM OF RS. 3 00 000/- FORM HIS FATHER TOO. ALTHOUGH THE ASSESSEE IS A SALARIED EMPLOYEE AND WAS NOT CONDUCTING ANY BUSINESS IT WAS FOUND THAT THE POINTS RAISED IN THE QUESTIONNAIRE DATED 14.1.2008 BY THE AO ARE NOT RELEVANT AT ALL TO THE FACTS OF THE ASSESSEE. HOWEVER THE ASSESSEE STIL L MADE THE COMPLIANCE BY FURNISHING ALL THE NECESSARY EXPLANATIONS AND CONFIRMATIONS WITH THE EVIDENCES O F THE LOAN OF RS. 3 00 000/- RECEIVED FROM HIS FATHER . FROM THE EXAMINATION OF THE FACTS IT BECOMES EVIDE NT THAT THE ASSESSING DURING THE CONCERNED YEAR WAS A NON-RESIDENT AS HE WAS POSTED BY INFOSYS TECHNOLOGIES LIMITED TO INFOSYS TECHNOLOGIES (CHINA ) COMPANY LIMITED FROM 10.10.2004 TO 20.7.12006 I.E. THE ENTIRE PERIOD FROM 1.4.2005 TO 31.3.2006 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE WAS IN INDIA AND HENCE WAS A NON- RESIDENT WHICH FACT HAS ALSO BEEN CONFIRMED BY THE AO AT PAGE 2 OF HIS ORDER. THEREFORE KEEPING IN V IEW THE PROVISIONS OF SECTION 6 TO 9 OF THE INCOME TAX ACT 1961 THE INCOME RECEIVED BY THE ASSESSEE AT ABROAD IS NOT TAXABLE AND HENCE THE AO IS DIRECTED TO DELE TE THE ADDITIONS MADE BY HIM AT RS. 12 79 609/-. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT ASSESSEE DURING THE CONCERNED YEAR WAS NON-RESIDENT AS PER SECTION 6 OF THE IT ACT. AS HE WAS POSTED B Y INFOSYS TECHNOLOGIES LTD. TO INFOSYS TECHNOLOGIES (CHINA) C OMPANY LIMITED FROM 10.10.2004 TO 20.7.12006 I.E. THE ENTIRE PERIO D FROM 1.4.2005 TO 31.3.2006 RELEVANT TO THE CONCERNED ASSESSMENT Y EAR. HENCE ADMITTEDLY THE ASSESSEE WAS NON-RESIDENT DURING THE PERIOD. THE ITA NO. 3742/DEL/2009 A.Y. 2006-07 5 AMOUNT RECEIVED AS SALARY ABROAD BY THE ASSESEE FRO M INFOSYS CHINA WAS NOT EARNED IN INDIA NOR IT WAS RELATED TO SERVICE RENDERED IN INDIA. HENCE THE SALARY RECEIVED BY THE ASSESSEE IS NOT INCOME DEEMED TO ACCRUE OR ARISE IN INDIA. IN THIS VIEW OF THE MATTER THE INCOME RECEIVED BY THE ASSESSE IN ABROAD IS NOT TAX ABLE. THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION U/S 80RRA. THE AO CANNOT THRUST UPON THE ASSESSEE PROVISION OF SECTIO N 80RRA WHEN IT IS CLEAR THAT THE ASSESSEE WAS NON-RESIDENT DURI NG THE YEAR AND THE SALARY EARNED ABROAD BY HIM WAS NOT TAXABLE. 7. IN THE BACKGROUND OF THE AFORESAID DISCUSSION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCOR DINGLY WE AFFIRM THE SAME. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/02/2010 UPON CONCLUSION OF THE HEARING. SD/- SD/- [C.L. SETHI) [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 18/02/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES