THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 25.02.2013
+ ITA 85/2013
+ ITA 100/2013
+ ITA 87/2013
CIT ... Appellant
versus
SURESH NANDA ... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Sanjeev Rajpal
For the Respondent : Mr C.A. Sundaram, Sr. Adv. with Mr Ajay Wadhwa,
Mr Sandeep Kapur, Mr Laksh Khanna, Ms Rohini
Musa, Mr Govind Singh Grewal, Advs.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE R.V.EASWAR
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
1. These appeals have been filed by the revenue under section 260A
of the Income-tax Act, 1961 (hereinafter referred to as the `said Act') and
they pertain to the assessment years 2001-02, 2002-03 and 2003-04. All
these appeals arise out of the common order passed by the Tribunal on
24.07.2012 in ITA Nos. 1428, 1429 and 1430/Del/2012.
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2. The main issue that is sought to be raised in these appeals is with
regard to the residential status of the respondent/assessee. According to
the learned counsel for the revenue/appellant, the respondent was a
resident of India whereas the Tribunal has erred in holding that the
respondent/assessee was not residing in India. Apart from the question of
residence, certain other issues were examined by the Tribunal. They
were as under:-
(i) The addition of Rs. 65,85,000/- under section 69 of
the Income-tax Act, 1961 in respect of the
assessment year 2002-03;
(ii) The addition based on the documents which were
allegedly found in the possession of 3rd parties.
This was in respect of the assessment years 2002-
03 and 2003-04;
(iii) The addition with regard to the marriage expenses
of the respondent/assessee's daughter pertaining to
the assessment year 2002-03;
(iv) The addition with regard to the payment made to
the respondent/assessee's estranged wife Smt Renu
Nanda in respect of the assessment year 2003-04;
(v) The addition of Rs.10,51,20,000/- under section 68
of the said Act in respect of the assessment year
2001-02.
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3. Insofar as the first addition of Rs. 65,85,000/- is concerned, that
matter has been remanded by the Tribunal to the assessing officer for a
consideration afresh. Insofar as the addition based on the documents
found from the third parties are concerned, the Tribunal has also
remanded this aspect of the matter in view of the fact that the
respondent/assessee had not been granted an opportunity of cross-
examining the persons from whom the said documents had been allegedly
recovered. The matter has been remanded to the assessing officer to
examine this issue after giving an opportunity of cross-examination to the
respondent/assessee.
4. Insofar as the question of marriage expenses of the
respondent/assessee's daughter is concerned, that issue has also been
remanded by the Tribunal to the assessing officer for considering the
same afresh. In fact, the revenue has not even proposed any question in
respect of this issue and is not challenging the Tribunal's order insofar as
this remand is concerned.
5. The addition with regard to the payment made to estranged wife
Smt Renu Nanda, for the assessment year 2003-04, has been deleted by
the Tribunal. This is challenged by the revenue in the appeal pertaining
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to the assessment year 2003-04. However, we find that the same has
been concluded by the Tribunal purely on an appreciation of facts. The
Tribunal has noted that the respondent/assessee and his wife Smt Renu
Nanda had separated by way of a deed of settlement dated 04.04.1998
and the payments were based thereon. The Tribunal also noted that the
addition has not been based on any evidence or incriminating material
indicating that any payment had been made outside the books. The
Tribunal observed that the sole basis for the assumption on the part of the
assessing officer was that there was some unwritten understanding
between the respondent/assessee and his estranged wife Smt Renu Nanda.
Therefore, the Tribunal was of the view that the purported basis of the
addition was only a presumption raised by the assessing officer. There
being no other material whatsoever, the Tribunal held that the addition
was liable to be deleted and it ordered accordingly. The Tribunal made it
clear that this ground was raised only in the assessment year 2003-04.
We are of the view that this is a pure finding of fact and no substantial
question of law arises insofar as this issue is concerned.
6. We are left to consider the addition of Rs. 10,51,20,000/- made
under section 68 of the said Act. Insofar as this addition is concerned, the
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decision with regard to it would depend on whether the
respondent/assessee is regarded as a resident or a non-resident. In case he
is regarded as a resident then, obviously, this addition would have to be
made. But, if he is regarded as a non-resident then this addition will have
to be deleted. This is exactly what the Tribunal has done. The Tribunal
considered the case of the revenue as well as that of the
respondent/assessee and determined that the respondent/assessee was a
non-resident and therefore the said addition has been deleted.
7. That leaves us with the issue with regard to the residential status of
the respondent/assessee. Section 6 of the said Act, so far as it is relevant,
reads as under:-
"6. For the purposes of this Act,-
(1) An individual is said to be resident in India
in any previous year, if he-
(a) is in India in that year for a period or periods
amounting in all to one hundred and eighty-two
days or more; or
(b) xxx xxx xxx xxx
(c) 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.
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Explanation- 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-cluase (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;
(b) Being a citizen of India, or a person of
Indian origin within the meaning of Explanation of
clause (e) of section 115C, who, being outside
India, comes on a visit to India in any previous
year, 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.
(2) xxx xxx xxx"
8. Before we examine the provisions of section 6 it would be
appropriate to set out the number of days of stay of the
respondent/assessee in India. This has been tabulated in the assessment
order. There is a discrepancy between the number of days as computed
by the assessee and the so-called actual number of days as computed by
the assessing officer. The same is given in the chart below:-
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A.Y No. of days in India as Actual No. of
computed by the days
assessee
2001-02 154 172
2002-03 138 150
2003-04 158 176
2004-05 159 177
2005-06 155 171
2006-07 158 176
9. Whether we take the computation of the respondent/assessee or of
the assessing officer, it is evident that the respondent/assessee has spent
less than 182 days in each of the three years in question, that is,
assessment years 2001-02, 2002-03 and 2003-04.
10. We shall now examine the provisions of section 6. It is apparent
that section 6(1)(a) makes it clear that an individual would be a resident
of India in any previous year if he was in India in that year for a period or
periods amounting in all to 182 days or more. The respondent/assessee,
clearly, is not such an individual because in none of the years in question
did he stay in India for 182 days or more.
11. The learned counsel for the appellant sought to argue that the
respondent/assessee would fall within section 6(1)(c) read with
explanation (b). However, we fail to see as to how that provision would
come to aid of the appellant. Section 6(1)(c) applies to citizens of India as
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well as to persons of Indian origin. It also applies to foreigners. Insofar
as foreigners are concerned section 6(1)(c) has the stipulation of stay in
India for a period or periods amounting in all to 60 days or more in the
year in question. However, this is in addition to the condition of total
stay in the preceding four years amounting in all to 365 days or more.
But, in the case of citizens of India, the length of stay in India in a
particular year has been extended to 182 days as compared to 60 days for
foreigners. This period of 182 days was earlier 150 days and by virtue of
the Finance Act 1994, with effect from 01.04.1995 the word `fifty' has
been substituted by `eighty-two'. In other words, instead of 150 days stay
in India, the period of stay required is 182 days for an individual to be
covered under section 6(1)(c) read with explanation (b), in case he is an
Indian citizen or a person of Indian origin.
12. In the present case, although, the respondent/assessee has, in the
preceding 4 years been in India for a period in excess of 365 days in
India, in none of years has he been in India for a period in excess of 182
days. Therefore, the Tribunal is absolutely right in concluding that the
respondent/assessee was not a resident of India. This is a pure question of
fact based on a plain reading of the provisions of section 6. All that has
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to be seen is the number of days that the respondent/assessee has spent in
India in the year in question as also in the preceding 4 years. No
substantial question of law arises insofar as this aspect of the matter is
concerned.
13. In view of the fact that the Tribunal has correctly decided that the
respondent/assessee was not a resident in India in the years in question, it
is axiomatic that the addition of Rs. 10,51,20,000/- under section 68
would have to be deleted because it was a transfer from the
respondent/assessee's foreign account to the domestic account.
14. In view of the foregoing we do not find any substantial question of
law which arises for our consideration in these appeals. The appeals are
dismissed.
BADAR DURREZ AHMED, J
R.V.EASWAR, J
FEBRUARY 25, 2013
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