1980 (4) TMI 52 - HC - Income Tax

Summary

Issues: Interpretation of the term "migrated" in the context of the Board's circular for tax assessment.

Analysis:
The judgment pertains to an individual assessed as a "Resident" in India, receiving income as a partner in a firm in Ceylon with a credit in his capital account. The assessee claimed the funds were brought from Ceylon based on a Circular issued by the Central Board of Direct Taxes. The Income Tax Officer (ITO) rejected the claim, stating the assessee, being an Indian citizen, did not migrate from Ceylon to India. The Appellate Authority Commissioner (AAC) and the Tribunal differed in their opinions, with the Tribunal concluding that the assessee, having business interests in Ceylon and being away from India for substantial periods, fell within the scope of the Board's circular. The Tribunal directed the ITO to examine the case further. The revenue challenged this decision, questioning whether the assessee could be considered to have migrated from Ceylon after a specific date as per the Circular.

The revenue contended that the term "migrated" in the Circular implied the assessee must be a citizen or resident of Ceylon, excluding Indian citizens frequently traveling between India and Ceylon. Referring to a Supreme Court decision, it was highlighted that "migrated" could have a narrow or wide interpretation, with the wider connotation suggesting movement from one place to another without the intention of permanent settlement. The judgment emphasized the background of the Circular, aiming to assist individuals of Indian origin facing difficulties in Ceylon due to restrictions. The Court interpreted "migrated" in a broad manner, requiring voluntary movement from Ceylon to India for an extended period with substantial business interests in Ceylon. The assessee, having spent significant time in Ceylon and now permanently in India, was considered to have migrated from Ceylon, making him eligible for the Circular's benefits. The argument that being an Indian citizen precluded the assessee from benefitting under the Circular was dismissed, as the Circular itself allowed assessments for Indian citizens. The Court upheld the Tribunal's decision, ruling in favor of the assessee and awarding costs.