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TMI Blog2024 (3) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... a, the word 60 days under clause (c) of subsection shall be replaced with 182 cannot be applied in the case of the assessee as there is no evidence submitted by the assessee establishing that the assessee leaves India for employment purpose. Before going into specific contention of the revenue, we note that the AO himself, while finalizing the assessment order, has treated the assessee as non-resident. Therefore, in our considered view there no dispute remains on this issue. Hence, as per the provision of section 5 of the Act only those income which accrues or arises or deemed to accrue or arise in India will be brought to tax under this Act. Protective addition made on account of the expenses incurred on the accommodation, tuition fee and utility bills in Singapore - CIT(A) deleted addition - We note that wife of the assessee has admitted having incurred impugned expenses out of the loan taken from the companies incorporated in the Singapore in which the assessee and his wife are shareholders and directors. The AO, in the case of wife, has not accepted the explanation and added the loan amount to her total income by holding that the companies from which loan claimed to be taken ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned DR contrary to finding of the learned CIT(A). Therefore, considering categorical finding of the learned CIT(A) and the status of the assessee being non- resident the investment made outside India cannot be brought to tax in India - Decided against revenue. TDS u/s 194C - disallowance of land filling expense on account of non-deduction of tax at source - Assessee submitted that the assessee was not subject to the provisions of audit u/s 44 AB for the immediately preceding assessment year and therefore the assessee cannot be held as assessee in default on account of non-deduction of TDS - HELD THAT:- The above contention of the assessee has nowhere been doubted by the CIT-A. As such the order of CIT(A) on the contention raised by the assessee is silent. Thus, we can presume that the assessee was not subject to the provisions of section 44AB of the Act in the immediately preceding year and therefore the assessee cannot be made liable to deduct the TDS u/s 194C of the Act on account of land levelling expenses. Accordingly, we set aside the finding of learned CIT(A) and direct the AO to delete the addition made by him. Hence, the ground of appeal of the assessee is hereby allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fying the residential status of the assessee in F.Y. 2011-12. 6. on the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made on accounts of lease rent expenses incurred in Singapore as the assessee was not able to prove the source of such expenses which he is bound to by virtue of being resident. 7. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made on accounts of tuition fees incurred in Singapore as the assessee was not able to prove the source of such expenses which he is bound to by virtue of being resident. 8. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made on accounts of utility bill payment incurred in Singapore as the assessee was not able to prove the source of such expenses which he is bound to by virtue of being resident. 10. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made on accounts of cash/credit deposit in Oversea-Chinese Banking Corporation Ltd. (OCBC Bank), Singapore by holding that the assessee is a non-resident and the cash deposits in the bank account i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r from competent authority in Singapore also suggests that he was not having credible source of income in Singapore. 16. The revenue craves leave to make addition, deletion, modification or alteration in any or all grounds of appeal, as the case may be. 2.1 All the 16 grounds of appeal raised by the revenue are interconnected, therefore we proceed to adjudicate all the grounds of appeal together. The interconnected issue raised by the Revenue is that the ld. CIT-A erred in deleting the addition made by the AO on account of the unexplained income. 3. The facts in brief are that the assessee is an individual and filed return of income for the year under consideration as non-resident. The assessee for the year under consideration declared income of Rs. 23,09,030/- only. A tax evasion petition was filed by the First Secretary (Economic) High commission of India to Singapore against the assessee. An information from competent authority in Singapore also received on 29th January 2015 about lavish lifestyle of the assessee family in Singapore, investment in foreign companies and the expense on the luxurious life is claimed to be sourced from loan received from 3 companies incorporated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Ahmedabad. Therefore, to protect the interest of Revenue, a protective addition was required to be made in the hand of the assessee. Hence, the AO made protective addition of Rs. 82,89,150/- on account of accommodation (Rs. 36,93,200/-), tuition fee (Rs. 44,85,773/-), utility bill payments (Rs. 1,09,777/-) only. 3.3 Regarding the deposit in OCBC Bank for Rs. 12,36,982/- (30500 SGD), the AO found that the assessee has not provided any supporting evidence, explaining the source of deposit, therefore, the AO added the same to his total income. 3.4 Regarding the investment in shares of Global Impex Link Pvt Ltd and Global Real Estate Solutions Pte, the AO found that the assessee as well as his wife both made separate investment of USD 70000/- and USD 100,000/- each. Therefore, the claim of the assessee that same has been covered in the hands of his wife cannot be accepted. Thus, the AO added the same to the total income of the assessee by converting the same into Rs. 68,94,656/- only. 4. The aggrieved assessee preferred an appeal before the learned CIT(A). The learned CIT(A) after considering submission of the assessee and the facts in totality deleted the addition made by the AO on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singapore, tuition fee for children in Singapore and various utility bills paid by the assessee in Singapore but has not made separate additions on this accounts to the total income to avoid double addition in view of addition of Rs. 1,46,51,606/- already made. 7.4 The addition of Rs. 1,46,51,606/-having been directed to be deleted, the could be made additions have been considered but in view of the decisions made on those issues for earlier assessment years dealt before, no addition on this account would be legaily tenable 5.12 On the principles applied in the case of Smt. Mona Patel and there being no evidence on record to show that there were undisclosed income in India, there remains no basis for confirming the additions on protective basis in the hands of the appellant. The appellant is also equally protected from taxation of income or deemed income outside India as per the principles laid in afore paragraphs. The AO is directed to delete the protective additions of Rs. 82,89,323/- being aggregate of Utility bill payment of Rs. 1,09,777/-, tuition fees in Singapore of Rs. 44,85,773/- and lease rent expense in Singapore of Rs. 36,93,600/-. The related grounds are allowed. 5.13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pore of USD 70000 and in Global Real Estate Solution PTE Ltd in Singapore of USD 100000. Reference has also been made to the show cause notice dated 06.11.2017 wherein, the appellant was directed to submit the source of income used by the appellant to invest in these companies and to the appellant's submission dated 17.11.2017 wherein it had been contended that similar additions had come to be made in the hands of his wife, Smt. Mona Patel and hence the same may not be added again. The AO held that the reply had not been satisfactory as investment was separately made by his wife and by him for the USD 70000 and USD 100000 in the two companies and no amount of unexplained investment of Shri Nilesh Patel has been added in his wife's hand. Adopting the conversion rate for USD to INR at Rs. 40.5568 and an addition of Rs. 68,94,656/- came to be made. 5.15 In the case of this issue also the appellant is protected by the provisions Section 5 and Section 6 as he is a non resident and impugned activities and transactions have been undertaken in and with entities in Singapore. The documents of the companies have been filed with the Accounting and Corporate Regulatory Authority, Singa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the finding of the learned CIT(A) raised various grounds of appeal which are interconnected. Accordingly, we proceed to adjudicate the same one by one in the following paragraphs. 8.1 The first ground or contention of the revenue is that the learned CIT(A) wrongly held that the assessee as non-resident under the provisions of section 6 of the Act. The contention of the revenue in the ground of appeal is that the assessee in the previous year relevant to assessment year under consideration was in India for 166 (i.e. more than 60 days) and for more than 365 days in the last 4 years. Therefore, as per the provision of clause (c) of sub-section 1 to section 6 the assessee shall be treated as resident under the Act. Further, the contention of the revenue that the provisions of explanation (1)(a) below section (6)(1) provides that citizen of India leaves India for the purpose of employment outside India, the word 60 days under clause (c) of subsection shall be replaced with 182 cannot be applied in the case of the assessee as there is no evidence submitted by the assessee establishing that the assessee leaves India for employment purpose. Before going into specific contention of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, in absence of bank statement of companies, the AO treated the same as unexplained cash/ income of the assess. The learned CIT(A) found that that the assessee has provided balance sheets and business file of the companies from where withdrawal has been made and deposited in his account. The bank statement was not arranged since at that time, the assessee moved from Singapore to Japan. The fact that assessee has business operation in Singapore through multiple companies incorporated by him in Singapore was doubted. The bank account in question is also maintained in Singapore. The assessee is also a non-resident. Thus, considering the status of the assessee and his business operation in Singapore, the deposit made/amount credited in bank account maintained outside India cannot be taxed in India unless the revenue brings corroborative material that the amount deposited outside India were accrued or arose or deemed to accrue or arise to the assessee in India. However, no such material has been brought on record by the AO. Hence the learned CIT(A) rightly deleted the addition of Rs. 12,36,982/- made by AO on account of deposit/ amount credited in the bank account of the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business expenditure being land filling expenses applying the provisions of sec.40(a)(ia) of the Act holding that payments has been made to the contractor and no TDS has been deducted and deposited by the Appellant. The appellant craves leave to add, alter, amend or modify all or any of the grounds of appeal before or at the time of hearing. 11. The assessee vide ground Nos. 1 to 3 of its appeal challenged the validity of the assessment order framed under section 143(3) r.w.s. 147 of the Act. 12. At the outset, we note that learned AR of the assessee before us submitted that he was instructed by the assessee not to press the issue raised in the captioned ground of appeal. Hence, the same is hereby dismissed as not pressed. 13. The next issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowance of land filling expense of Rs. 34.5 Lakhs on account of non-deduction of tax at source. 14. The assessee during the year under consideration sold land property against which claimed land leveling cost of Rs. 34.5 Lakhs. The assessee before the AO submitted that he entered contract for land leveling with one Shri Bharatbhai Devshibhai Ukani. As per such MOU, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acity of land leveling expenses claimed by the assessee but made the disallowance on account of non-deduction of TDS. In this regard, we note that the assessee before the learned CIT(A) has submitted that the assessee was not subject to the provisions of audit under section 44 AB of the Act for the immediately preceding assessment year and therefore the assessee cannot be held as assessee in default on account of non-deduction of TDS. The relevant contention raised by the assessee before the learned CIT-A is reproduced as under: Coming to the issue of non deduction of TDS, the same would be applicable only if the assessee is subject to tax audit in the earlier years. The provisions of section 194 of the Act do not apply to an individual unless he has been subjected to audit u/s. 44AB of the Act in the immediately preceding previous year. 21. The above contention of the assessee has nowhere been doubted by the learned CIT-A. As such the order of the learned CIT(A) on the contention raised by the assessee is silent. Thus, we can presume that the assessee was not subject to the provisions of section 44AB of the Act in the immediately preceding year and therefore the assessee cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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