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TMI Blog2024 (1) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the same. Revenue however, did not agree with the submissions of the assessee and on the basis of the status as Investor in the Occupation Permit issued by the Government of Mauritius as well as the business visa issued to the assessee concluded that the assessee had left India not for the purpose of employment but as an Investor. In this regard, the A.O. has also taken into consideration that the assessee was holding 100% shareholding in Firstland Holdings Ltd., Mauritius, from which the assessee received alleged salary and fees for negotiation and obtained investments for the company. Accordingly, as per the A.O., the assessee has considerable control over affairs of the company i.e., Firstland Holdings Ltd., Mauritius, and the copy of the appointment letter and salary slips provided by the assessee are self serving documents in view of the fact that the assessee had no permit for employment in Mauritius. We find that the issue of whether the term employment outside India includes doing Business by the taxpayer, came up for consideration before in CIT v/s O. Abdul Razak [ 2010 (12) TMI 940 - KERALA HIGH COURT ] wherein the Hon ble Court while deciding the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised the following grounds: 1. Whether on the facts and circumstances of the case, the Ld CIT(A) erred in interpreting the provisions of section 9A of the Immigration Act of Mauritius relating to Occupation permit which allows assessee to stay and work in Mauritius as an investor not an employee.? 2. Whether on the facts and circumstances of the case, the Ld CIT(A) erred in deleting the addition income received in Mauritius in USD 43,75,000 converted into INR 23,79,53,188/- (conversion rate at Rs. 54.3893 per 1 US $) despite the fact that from the seized documents found it was clear that the assessee has not paid any taxes in Mauritius on Fees of USD 43,75,000 for negotiations and obtaining investment from Credit Suisse. Thus, no taxes has been paid on the fees received of USD 43,75,000 in any jurisdiction? 3. Whether on the facts and circumstances of the case, the Ld CIT(A) erred in determining the residential status of the assessee for the year under consideration as Non-Resident despite the fact that assessee has stayed in India for period of 176 days (which is more than 60 days) in current year and within the four years preceding the current year have been in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment of the company for a period of three years. Therefore, it was claimed that the assessee was a non resident as per the provisions of section 6(1)(c) r/w Explanation 1(a) to section 6(1) of the Act. 5. The A.O., vide order dated 29/09/2021, passed under section 153A of the Act did not agree with the submissions of the assessee and held that the assessee left India in the relevant financial year as an Investor on a business visa which is usually taken by an investor and not by an employee who leaves India for employment. Accordingly, the A.O. held that the residential status of the assessee for the year under consideration is Resident and the assessee is not entitled to take benefit of Explanation 1(a) to section 6(1) of the Act. Since the assessee has stayed in India for a period of 176 days (which is more than 60 days) in the current year and has been in India for a period of more than 365 days within four years preceding the current year, the assessee was held to be a Resident as per the provisions of clause (c) of section 6(1) of the Act. Accordingly, income received by the assessee from offshore jurisdiction of Rs. 28,14,64,628 (equivalent to USD 51,75,000) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een 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. Explanation 1. In the case of an individual, (a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words sixty days , occurring therein, the words one hundred and eighty-two days had been substituted; 9. Therefore, under section 6(1) of the Act, an individual is said to be resident in India in any previous year, inter alia, if he has within four years preceding the relevant year been in India for a period of 365 days or more and is in India for a period of 60 days or more in the relevant year. In the present case, there is no dispute that the assessee was in India for a period of 365 days in the four years preceding the relevant year. Explanation 1(a) to section 6(1) of the Act further extends the period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the calendar year 2013, declaring a total income of Mauritian Rupee ( MUR ) 2,44,48,000 and tax deduction of MUR 36,67,200, for the period from January 2013 to march 2013. Further, the assessee also filed his return of income with Mauritius Revenue Authorities for the period from August 2012 to December 2012 declaring a total income of MUR 1,65,12,353 and a tax deduction of MUR 24,76,852, against the same. The Revenue however, did not agree with the submissions of the assessee and on the basis of the status as Investor in the Occupation Permit issued by the Government of Mauritius as well as the business visa issued to the assessee concluded that the assessee had left India not for the purpose of employment but as an Investor. In this regard, the A.O. has also taken into consideration that the assessee was holding 100% shareholding in Firstland Holdings Ltd., Mauritius, from which the assessee received alleged salary and fees for negotiation and obtained investments for the company. Accordingly, as per the A.O., the assessee has considerable control over affairs of the company i.e., Firstland Holdings Ltd., Mauritius, and the copy of the appointment letter and salary slips ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ** (iii)Where an individual who is a citizen of India leaves India in any year for the purposes of employment outside India, he will not be treated as resident in India in that year unless he has been in India in that year for 182 days or more. The effect of this amendment will be that the test of residence in (c) above will stand modified to that extent in such cases. 7. What is clear from the above is that no technical meaning is intended for the word employment used in the Explanation. In our view, going abroad for the purpose of employment only means that the visit and stay abroad should not be for other purposes such as a tourist, or for medical treatment or for studies or the like. Going abroad for the purpose of employment therefore means going abroad to take up employment or any avocation as referred to in the Circular, which takes in self-employment like business or profession. So much so, in our view, taking up own business by the assessee abroad satisfies the condition of going abroad for the purpose of employment covered by Explanation (a) to section 6(1)(c) of the Act. Therefore, we hold that the Tribunal has rightly held that for the purpose of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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