April 2014
Smita Anand, China, In re [2014] 42 taxmann.com 366 (AAR – New Delhi) A.A.R. No. 1091 of 2011, Dated: 19 February 2014
By Geeta Jani, Dhishat B. Mehta Chartered Accountants
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S/s.- Explanation (b) to section 6(1) of the Act – person returning to India after leaving overseas job could not be said to be on “visit” to India and hence, Explanation (b) to section 6(1) was not applicable.
Facts:
The Applicant was working with a Chinese company (“ChinaCo”). The applicant left India in September 2007 and her employment with ChinaCo commenced on 1st October, 2007. While employed in China, she had visited India but her stay in India in a particular year never exceeded 182 days. She resigned from her employment in China with effect from 31st January, 2011 and returned to India on 12th February, 2011. During financial year 2010-11 (being the relevant year), her total stay in India was 119 days.
The Applicant contended that she was only on “visit” to India, and accordingly, in terms of Explanation (b) to section 9(1), she was a non-resident because:
• her employer card was valid upto 31-03-2012;
• she was considerably exploring possibility of job outside India;
• her residential house was let out till June, 2011;
• she visited her friends and relatives in different parts of India and also travelled to different locations on holidays;
• her children continued to stay abroad, etc.
Held:
The AAR held as follows.
• There was no information whether after resigning her employment and coming to India, the applicant again left India for any employment.
• The activities mentioned by the Applicant need not be proof of a “visit” since even a person staying permanently in India also does those activities.
• Since the Applicant returned to India after resigning from her employment in China, the reason does not seem to be only for a “visit”.
• On facts and circumstances of the case, Explanation (b) to section 6(1) is not applicable to the Applicant’s case.
