By Ashok Dhere, Jagdish D. Shah, Chartered Accountants
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New Page 1
5) Jayram Rajgopal Poduval
v. ACIT
ITAT ‘H’ Bench, Mumbai
Before R. S. Syal (AM) and
Sushma Chowla (JM)
ITA No. 7072/M/2004
A.Y. : 2001-02. Decided on : 18-1-2008
Counsel for assessee/revenue : Rajan Vora/
B. K. Singh
S. 6(6) of the Income tax Act, 1961 — Resident but not
ordinarily resident — Whether the two conditions specified in the provisions are
cumulative — Held, No.
Per R. S. Syal :
Facts :
The assessee’s stay in India in the preceding 10 years was as
under :
|
No.
|
Assessment Year
|
No. of
days in India
|
|
1.
|
1991-92
|
29
|
|
2.
|
1992-93
|
15
|
|
3.
|
1993-94
|
23
|
|
|
(A)
|
67
|
|
4.
|
1994-95
|
24
|
|
5.
|
1995-96
|
92
|
|
6.
|
1996-97
|
366
|
|
7.
|
1997-98
|
365
|
|
8.
|
1998-99
|
359
|
|
9.
|
1999-2000
|
365
|
|
10.
|
2000-01
|
366
|
|
|
(B)
|
1,937
|
|
|
(A)
+ (B)
|
2004
|
According to the AO, the assessee was not ‘non-resident’ in 9
out of 10 years and had also resided in India for more than 730 days in the
preceding 7 years. Hence, he held that the status of the assessee was ‘Resident
and ordinarily resident’ (ROR). According to the CIT(A), in order that a person
could be considered as Resident but not ordinarily resident (RNOR), he must
fulfil the following two conditions given in S. 6(6)(a) viz. :
- He has not been resident in India in nine out of the ten previous years; and
- He has not during the seven previous years pre-ceding that year been in India for a period of 730 days or more.
Since the assessee’s stay in India was for more than 730 days in the 7 preceding years, he, relying on the decision of the Gujarat High Court in the case of Pradeep J. Mehta, dismissed the appeal filed by the assessee.
Held:
The Tribunal noted that the provisions of S. 6(6)(a) uses the term ‘or’ and not ‘and’ between the two conditions given therein. Accordingly, the person would be considered as RNOR if he complies with either of the two conditions given therein. It disagreed with the CIT(A) that in order to qualify as RNOR, the assessee should fulfil both the conditions. In the case of the assessee, since he was not resident in India in nine out of ten previous years, his status would be that of RNOR. In support it also relied on the decision of the Apex Court in the case 4 of Morgenstern Werner.
Cases referred to :
1. CIT and Another v. Morgenstern Werner, (2003) 259 ITR 486 (SC)
2. PradeepJ. Mehta v. CIT, (2202) 256 ITR 647 (Guj.)
Note: The provisions of S. 6(6) have been substituted by the Finance Act, 2003 w.e.f. 1-4-2004. As per the substituted provisions, in order to qualify as RNOR, the person should be non-resident in nine out of ten previous years. The other alternative condition remains unchanged.
