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TMI Blog2024 (1) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of non-resident seafarer in India, same could not be brought to tax in India in terms of section 5 of the Act. In this case of Iqbal Ismail Virani [ 2021 (3) TMI 664 - ITAT PANAJI] ITAT held that money brought in India by non-resident for investment or for other purpose is not liable to tax under provisions of Act and question of assessment to income-tax arises only when there is no evidence to show that amount in question in fact represents remittance from abroad. In the case of Hemant Mansukhlal Pandya [ 2018 (11) TMI 949 - ITAT MUMBAI] ITAT held that where additions were made to income of assessee, who was a non-resident since 25 years, since, no material was brought on record to show that funds were diverted by assessee from India to source deposits found in foreign bank account, impugned additions were unjustified. In the case of Smt. Susila Ramasamy [ 2009 (4) TMI 554 - ITAT CHENNAI] ITAT held that in case of remittances by way of banking channel onus on assessee under Section 69 stands discharged, and, therefore, section 5(2)(b) does not apply. Thus CIT(A) has erred in facts and law in confirming the additions made by the assessee received by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- in Mutual Funds during the year under consideration. A notice under Section 148 of the Act was issued on 12.03.2013 and assessee filed return of income declaring income at Rs. 2,21,271/- and claimed exempt income of Rs. 33,22,644/- being dividend income. The assessment was finalized at Rs. 9,28,77,320/- after making addition of Rs. 9,15,56,045/- being unexplained investment under Section 69 of the Act and Rs. 10 lakhs under Section 68 of the Act, being unexplained cash credits. 4. Before the CIT(A), the assessee submitted that the assessee is a non-resident as defined under Section 2(30) of the Act and the non-resident status of the assessee has not been disputed by the Assessing Officer. Further, the assessee submitted that the entire funds had come from his son s overseas accounts and both the assessee and his son are non-residents during the relevant previous year, and the aforesaid facts have not been disputed by the Department at any stage. The assessee submitted that since the assessee is a non-resident and he had received funds through banking channel in his NRE account from his son, who also was a non-resident residing in UK and therefore since no income had accrued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiated by any evidence and mere transfer within RBI Guidelines cannot discharge the assessee from proving the source of income as per Income Tax provisions. Accordingly, Ld. CIT(A) confirmed the addition with the following observations:- 6.2.4 In the entirety of the above discussion, it is concluded that the appellant has failed to establish genuineness of the transaction and source of funds transferred in his account with corroborative evidence and hence addition made by Assessing Officer for Rs. 9,15,56,045/- hereby held justified and is confirmed. Relevant ground of appeal is dismissed. 6. The assessee is in appeal before us against the aforesaid additions confirmed by Ld. CIT(A). 7. Before us the Counsel for the assessee submitted that in the instant facts, Department has not disputed that the assessee is a non-resident Indian during the impugned year under consideration. Further, during the impugned year under consideration, the assessee had received certain amount from a non-resident account of his son Mr. Binoy Raja into his NRE bank account in India as per RBI Guidelines. The son of the assessee Mr. Binoy Raja is also a non-resident and residing in UK. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below, while passing the order: It is found that the impugned issue has been duly addressed by the CBDT Circular No. 13/2017, dated 11-4-2017 as rightly relied upon by the assessee.[Para 11] A perusal of the Circular referred to above shows that salary accrued to a non-resident seafarer for services rendered outside India on a foreign going ship (with Indian flag or foreign flag) shall not be included in the total income merely because the said salary has been credited in the NREaccount maintained with an Indian bank by the seafarer. Remittances of salary into NREAccount maintained with an Indian Bank by a seafarer could be of two types : (i) Employer directly crediting salary to the NREAccount maintained with an Indian Bank by the seafarer ; (ii) Employer directly crediting salary to the account maintained outside India by the seafarer and the seafarer transferring such money to NREaccount maintained by him in India. The latter remittance would be outside the purview of provisions of section 5(2)(a), as what is remitted is not 'salary income' but a mere transfer of assessee's fund from one bank account to another which does not give rise to 'Income'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of reassessment, when the same were more than six years old documents to be obtained from the bankers. Therefore the Ld. CIT(A) directed the Assessing Officer to obtain from the assessee, the certified True Copies of the above documents from Standard Chartered Bank and the assessee shall bound to furnish the same, before the Assessing Officer while giving effect to the appellate order . The ld. CIT(A) further directed the A.O. having satisfied himself that the source of such investment is from outside India shall delete the addition made by him . We do not find any infirmity in the direction issued by the Ld. CIT(A). The Ld. CIT(A) having satisfied with the copies of the documents submitted by the assessee, has taken a conscious decision to delete the additions, since the funds are NRI Repatriation funds came outside India and is not taxable in India. Further the assessee also produced before us a copy of giving effect order dated 04.11.2020 passed by the Assessing Officer deleting the addition made by him. 11. In this case of Iqbal Ismail Virani 128 taxmann.com 181 (Panaji - Trib.) , the ITAT held that money brought in India by non-resident for investment or for oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor deemed to be received and therefore not within the purview of section 4(1)(a) of 1922 Act. It is true that the words used in section 4(1)(a) of 1922 Act relate to the first receipt after the accrual of the income. Once it is received by the party entitled to it, in respect of any subsequent dealing with the said amount it cannot be said to be received as income on that occasion. The receipt of income refers to the first occasion when the recipient gets the money under his own control. Once an amount is received as income, any remittance or transmission of the amount to another place does not result in receipt , within the meaning of this clause, at the other place. If therefore the income, profits or gains have been once received by the assessee even though outside British India they do not become chargeable by reason of the moneys having been brought in British India, because what is chargeable is the first receipt of the moneys and not a subsequent dealing by the assessee with the said amount. In that event they are brought by the assessee as his own moneys which he has already received and had control over and they cease to enjoy the character of income, profits or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts such remittance. In other words, in the absence of proper supporting evidence, the taxpayers' story that the money has been brought into India from outside may be disbelieved by the Income-tax Officer who may then proceed to hold that the money had in fact been earned in India. (3) If the money has been brought into India through banking channels or in the form of assets like plant and machinery or stock-in-trade, for which the necessary import permits had been obtained, no questions at all are asked by the Income-tax Officers as to the origin of the money or assets brought in. It is only in cases where the money is claimed to have been brought from outside otherwise than through banking channels and there is no evidence regarding the transfer of money, that the department has to make enquiries about the source thereof. Even in these cases, having regard to the difficulties experienced by persons migrating from Pakistan, Burma and East African countries, instructions have been issued to the Income-tax Officers that such claims should be freely admitted up to the limit of Rs. 50,000 in each case provided the following conditions are satisfied: (a) The assessee mig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might produce before the income-tax authorities in India, their bank accounts in those countries as also copies of the assessment orders passed in their cases by the income-tax authorities of those countries. The migrants would also then be required to prove that the amounts brought into India can directly be linked with the funds which they had possessed in those countries. 26. The position that emerges from the CBDT Circular as well as the Hon'ble Supreme Court's decision in the case of Keshav Mills Ltd. (supra) is that the money brought in India by Non-Resident for investment or for other purpose is not liable to tax under the provisions of the Income-tax Act. The question of assessment to income tax arises only when there is no evidence to show that amount is question in fact represents remittance from abroad. Admittedly, in the present case, there is ample evidence on record demonstrating that the amounts in question represents remittance from abroad by the appellant himself. The rational behind this legal proposition is that the word receipt implies two persons viz. the person who receives and the person from whom he receives; a person cannot receive a thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India. Explanation 2. For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India. 28. The provisions of sub-section (2) of section 5 provides that the Non-Resident is liable to tax in respect of (a) income received or deemed to be received in India and (b) income which accrues or arises or is deemed to be accrued or arise to him in India. Considering the totality of facts situation of the case on hand, it can be safely concluded that the remittance received from the appellant's account Bank of Baroda, Dubai to appellant's account to SBI NRE SB Account, Mapusa, Goa or remittance to the vendors of the properties is neither income received or deemed to received in India or nor was accrued or arisen or deemed to be accrued or arisen in India, therefore, the question of chargeability to income tax in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not accepting the explanation offered by the assessee is not based on proper appreciation of material on record and other attending circumstances available on record. It is needless to say that the opinion of the Assessing Officer is required to be formed with reference to the material on record and application of mind in sin qua non for forming the opinion as held by the Hon'ble Supreme Court in the case of CIT v. P. Mohanakala [2007] 161 Taxman 169/291 ITR 278. In the present case, there is total lack of application of mind, the Assessing Officer had not formed the opinion objectively with reference to any material on record and is merely based on the surmises and conjectures. We fail to understand as to why the Assessing Officer, having rightly taken note of the correct legal position governing the credits in the bank account i.e. he had chosen to bring the same to tax u/s 68 of the Act instead of section 69 of the Act. This itself goes to show the mala fides on the part of the Assessing Officer, perhaps he intends to assess to tax in the hands of the appellant under more vigorous the provisions of section 68 of the Act than provisions of section 69 of the Act. In the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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