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Issues Involved:
1. Determination of the deceased's domicile. 2. Taxability of the deceased's foreign assets under the Estate Duty Act. Detailed Analysis: 1. Determination of the Deceased's Domicile: The primary issue revolved around whether the deceased should be treated as domiciled in the USA or India. The Assessing Officer (AO) held that the deceased had an Indian domicile, citing factors such as the deceased's continuous visits to India, lack of immovable property in the USA, and the necessity to establish a permanent domicile in another country. The AO argued that the deceased's frequent travels and lack of permanent settlement in the USA indicated that he had not acquired a new domicile. The first appellate authority, however, concluded that the deceased had acquired a domicile in the USA. This conclusion was based on several factors: - The deceased had studied and worked in the USA and held a Green Card. - He applied for US citizenship, indicating a clear intention to settle permanently in the USA. - His children were granted US citizenship, further demonstrating his intention to domicile in the USA. - Despite his travels due to employment, the deceased's actions reflected a permanent intention to reside in the USA. The Tribunal upheld the first appellate authority's decision, emphasizing that domicile involves a voluntary fixed habitation with the intention to remain permanently. The Tribunal noted that the deceased's application for naturalization and other actions clearly indicated his intention to make the USA his permanent home. 2. Taxability of the Deceased's Foreign Assets: The determination of domicile directly impacted the taxability of the deceased's foreign assets under the Estate Duty Act. According to Section 21 of the Estate Duty Act, immovable property outside India and movable property outside India are not included in the property passing on the death of the deceased unless the deceased was domiciled in India at the time of death. The AO's stance was that since the deceased was domiciled in India, all his assets, including foreign assets, should be taxed under the Estate Duty Act. However, the first appellate authority, having concluded that the deceased was domiciled in the USA, held that his foreign assets should not be taxed in India. The Tribunal agreed with the first appellate authority, reinforcing that the deceased's domicile was in the USA, and therefore, his foreign assets were not subject to Indian estate duty. Conclusion: The Tribunal affirmed the first appellate authority's decision that the deceased was domiciled in the USA, not India. This determination was based on a comprehensive analysis of the deceased's intentions and actions, such as his application for US citizenship and the citizenship status of his children. Consequently, the deceased's foreign assets were not taxable under the Indian Estate Duty Act. The appeal by the revenue was dismissed, and the impugned order was upheld.
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