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TMI Blog2017 (11) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... ame has rightly been claimed as deduction in the return of income. Thus, on merits we hold that the assessment order passed by the Assessing Officer is not prejudicial to the interest of the Revenue, albeit can be reckoned as erroneous in the absence of any proper enquiry. It is trite law that revisionary jurisdiction under section 263 on an assessment order can only be exercised once the said order is found to be erroneous insofar as it is prejudicial to the interest of the Revenue, i.e., both the conditions should fulfill simultaneously. Thus, even if one of the limbs of said expression used in section 263 is missing, then ostensibly the assessment order cannot be set aside within the scope of revision u/s 263. Hence, on merits we quash the order of the Ld. Pr. CIT and uphold the allowability of deduction of salary as claimed by the assessee. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions and facts and relevant case laws on this issue. Since the Assessing Officer has not made any proper enquiry, therefore, such an order is not only erroneous but also prejudicial to the interest of the Revenue. He, after considering the entire submissions made by the assessee, held that provisions of section 5 clearly provides that income received by the assessee in India has to be taxed in India and it is not the case that the assessee has claimed that he has paid taxes in foreign country and, therefore, credit of tax should be given to him. Accordingly, the order has been set aside to make afresh to examine the issue of deduction. 5. Before us, the ld. counsel for the assessee, submitted that the Assessing Officer in the course of the rectification proceedings u/s 154 initiated after assessment proceedings has specifically raised this issue of claim of deduction of salary amounting to ₹ 40,04,830/- for which assessee has filed a reply, the copy of which is appearing at pages 23 to 25 of the paper book. Such a reply is also now part of assessment record. The assessee has also given a chart not only before the Assessing Officer but also before the ld. Pr. CIT highligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso prejudicial to the interest of revenue which cannot be sustained and the same has rightly been set aside by the Ld. Pr. CIT to the file of the Assessing Officer for proper and afresh examination. 7. We have heard the rival submissions; perused the relevant material referred to before us and also the finding given in the impugned order. The sole basis/ reason for exercising jurisdiction under section 263 by the Ld. Pr. CIT is that, the claim of deduction of salary amounting to ₹ 40,04,830/- has not been properly examined by the Assessing Officer while allowing the said deduction. The assessee, who is employed with M/s Reliance Industries Limited, was deputed as Country Manager to Kurdistan, Iraq, w.e.f 16/4/2010 for the purpose of his employment in Iraq he has received salary. In the annual return of income filed in India on 14/7/2011, assessee has claimed exemption of salary earned outside India amounting to ₹ 40,04,830/- out of total salary received at ₹ 43,68,905/-. The said return though has been filed in the status of "nonresident", however, from the perusal of the assessment order, it is seen that the Assessing Officer has framed the assessment in the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re; or having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. So far as the second criterion of four years as given in clause (c) of sub-section (1) of section 6, the same is not applicable here. For the purpose of present case, only criterion, which is to be seen, is whether the assessee can be said to be resident in India in terms of clause (a) which clearly stipulates that assessee should have been resident in India for a period of 182 days or more. If the assessee in the previous year has not stayed in India for more than 182 days, then ostensibly such an income cannot be taxed in the hands of the assessee individually as a resident of India. The assessee before the Pr. CIT and also before the Assessing Officer has given the following details of number of days which assessee has stayed outside India:- "No. of days assessee stayed out of India i.e. in Kurdistan, Iraq. Date of leaving India Date of reporting to India No. of days stayed out of India 26/04/2010 25/05/2010 30 02/06/2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction in the return of income. Thus, on merits we hold that the assessment order passed by the Assessing Officer is not prejudicial to the interest of the Revenue, albeit can be reckoned as erroneous in the absence of any proper enquiry. It is trite law that revisionary jurisdiction under section 263 on an assessment order can only be exercised once the said order is found to be erroneous insofar as it is prejudicial to the interest of the Revenue, i.e., both the conditions should fulfill simultaneously and this has been held so by the Hon'ble Supreme Court, which has been referred and relied upon by the ld. CIT D.R., in the case of Malabar Industrial Co. Ltd. Vs. CIT reported in [2000] 243 ITR 83 (SC), which principle has been reiterated later on not only by the Hon'ble Supreme Court but also by several High Courts. Thus, even if one of the limbs of said expression used in section 263 is missing, then ostensibly the assessment order cannot be set aside within the scope of revision u/s 263. Hence, on merits we quash the order of the Ld. Pr. CIT and uphold the allowability of deduction of salary as claimed by the assessee. 9. In the result, appeal of the assessee is allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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