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TMI Blog2010 (11) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... onal rate of tax on the interest earned from NRNR deposits under section 115H read with section 115E is correct. Accordingly, we dismiss the department appeal. - ITA. No. 1734 of 2009 - - - Dated:- 9-11-2010 - C.N. Ramachandran Nair, Bhabani Prasad Ray, JJ. P.K.R. Menon and Jose Joseph for the Appellant Joseph Kodianthara and Terry V. James for the Respondent JUDGEMENT C.N. Ramachandran Nair, J:- 1. The question raised in the Revenue's appeal is whether the Tribunal was justified in holding that the respondent assessee is entitled to concessional rate of tax under section 115H read with section 115E on the interest received from the bank deposits maintained by the assessee. We have heard standing counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portions of the Act, we extract hereunder sections 115(c)(b) and 115H of the Act. "S.115C.Definitions In this Chapter, unless the context otherwise requires, (a) ** ** ** (b) "foreign exchange asset" means any specified asset which the assessee has acquired or purchased with, or subscribed to in, convertible foreign exchange. ** ** **. S.115H. Benefit under Chapter to be available in certain cases even after the assessee becomes resident. Where a person, who is a non-resident Indian in any previous year, becomes assessable as resident in India in respect of the total income of any subsequent year, he may furnish to the (assessing) Officer a declaration in writing along with his return of income under section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affecting it's character will not affect it's identity as a foreign exchange asset. In this case, the NRNR deposits are transferred by the assessee from one bank to another. Though this has happened after assessee ceased to be a non-resident, we feel still the deposits retain character as a foreign exchange asset because, asset, namely the deposit, was acquired with convertible foreign exchange. In other words, so long as the original source of the deposit is convertible foreign exchange, the transfer of such foreign exchange asset, namely the deposit from one bank to another will not affect it's identity as a foreign exchange asset. So much so, we feel the finding of the Tribunal that assessee is entitled to concessional rate of tax on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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