9911796707
TMI Blog1981 (10) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... eration of the assessee's first objection may be stated. The assessee is a citizen of India. She went to Dubai in the year 1959 and it is stated that out of her earnings abroad, she had remitted moneys which were held in her account with the British Bank of Middle-East, Bombay, by way of deposits, the accounts having been styled "Non-resident (External) Account", in accordance with FERA and under its rules. She returned to India on 20-10-1973 and, before her return, she had caused a house property to be purchased in Kodaikanal, styled Maurice Hill, on 17-3-1973 for her occupation when she returned to India. It appears that the property, after the purchase and before she had occupied it on her arrival, was let out for some period about which there appears to be some dispute between the department and the assessee. But it is clear, from the evidence led by the assessee and the finding of the AAC, with which we agree, that the property was in fact let out to some persons, may be seasonally, after its purchase and before her occupation. 4. In the original wealth-tax return for the assessment year 1974-75, filed on 29-6-1976, the assessee stated her status as resident, but not ordinar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property purchased by the assessee having been let out. Our finding on this dispute will, therefore, dispose of the assessee's ground on this point as well as the department's appeal. 6. The assessee's contention before us against the finding of the Commissioner (Appeals) on the question of the concerned amounts of deposits having ceased to be held in Non-resident (External) Account is that the amount was, in fact, held in a Non-resident (External) Account only on the concerned valuation date and the advice of the Reserve Bank for transfer of the same to the resident account came much later, though the instruction was to transfer it as from an anterior date, i.e., to say with retrospective effect. The learned departmental representative, on the other hand, vehemently opposed the claim of the assessee for exemption on the ground that her status can only be taken as a resident, but not ordinarily resident and not non-resident. Firstly, it was suggested that the assessee's claim as to the property having been let out was not convincingly proved by evidence. Reliance was placed on the corresponding income-tax assessment where her status has been declared as resident, but not ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee's claim has force and has to be accepted. On the materials brought on record by the assessee, there can be no manner of doubt that the property purchased by her was, in fact, let out after it was purchased for some period at least. Even the WTO does not seriously dispute this when he says that even if the property be regarded as let out, the letting out is only of a seasonal character and not of a permanent one. Apart from this even if we were to ignore the fact of letting out the property meanwhile, it cannot be said in the absence of any other evidence which supports such a finding that the property was kept or maintained by the assessee as a dwelling place for periods amounting to 182 days or more. Undisputedly, the assessee had come to India only in October 1973, after a long absence of over a decade from the country. Her efforts to cause a house being purchased for her residence after she came, in the early part of 1973, can quite reasonably be attributed to the fact, having regard to possibilities of human conduct, that the transaction of a purchase of a suitable house in a desired place might involve some time-lag, and it is to provide a sufficient margin of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of any law by the department which would have the effect of converting the non-resident account into a resident account. Even without a communication or order of the Reserve Bank, in the absence of any such provision of law, the mere order or direction of the Reserve Bank to treat a Non-resident (External) Account as a resident account as from an anterior date, cannot have a retrospective effect so as to convert that account into a resident account from such anterior date. In the circumstances, as the deposits on the relevant valuation date actually stood in the Non-resident (External) Account, the Commissioner (Appeals) was not justified in denying the exemption to the assessee. We, therefore, set aside his order on this point and direct grant of exemption. 9. [This para is not reproduced here as it involves a minor issue.] 10. Coming to the assessment year 1975-76, the only objection pertains to the non-deduction of the income-tax and wealth-tax liabilities for the year 1974-75. We direct allowance of the assessee's claim in the manner indicated in our order for 1974-75 above. In the assessee's appeal for the year 1976-77 also the only objection pertains to non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons who had returned to India already in the past. 11. The learned departmental representative submitted in this connection that since the exemption is available for a period of seven years from the period of assessment year 1977-78, it does not contemplate persons arriving before 1-4-1976, as in the case of the assessee who came to India on 20-10-1973, because the seven year period of exemption by the very language of the enactment will not be available. It was further argued that the exemption is open only to persons who are returning with the intention of permanently residing therein, but in this case the assessee has stated in her letter, dated 20-11-1976, to the WTO, a copy of which has been furnished before us, that she has not yet decided to continue to stay permanently in India unless certain provisions under wealth-tax law are clarified, and as this would take some time she has decided to let the external account continue. We find no merit in the department's stand on the question of her intention. The statement in her letter, referred to above, does not necessarily show that she had not intended to settle down permanently in this country. The facts that she is a ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to, or arise in relation to, moneys brought in by the assessee from outside the country. The amounts by way of accretions or interest earnings on the original amounts brought in by the assessee undoubtedly represent the assets and they have been acquired out of or with the aid of the moneys originally brought in. Therefore, in our view, they clearly fall within the scope of section 5(1)(xxxiii) and the Commissioner (Appeals) is not, in our view, correct in stating that only the properties or assets purchased out of such moneys brought in by the assessee would be eligible and not any accretion or interest earning thereon. He does not appear to dispute the position, that if the assessee had purchased some property or other assets with the moneys brought in and the value of such property or assets goes up with the efflux of time, then the entire such value is eligible for exemption. We do not see why it should be different where moneys brought in increase by efflux of time on account of the interest earnings thereon. We, therefore, uphold the assessee's contention. 13. In the result, the assessee's appeals are treated as allowed and the department's appeals stand dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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