Case Law Details
DCIT Vs Binod Kumar Singh (ITAT Mumbai)
This bunch of fourteen appeals are by the Revenue including cross objections by the assessee against separate orders of different dates by the ld. First Appellate Authority, Mumbai. First we shall take up appeal for A.Y. 2008-09 (ITA No.4597/Mum/2012), wherein, first ground raised by the Revenue pertains to deleting the addition of Rs.57,40,09,054/- by the ld. First Appellate Authority by holding the status of the assessee as “non-resident” without appreciating that clause-(b) of Explanation to section 6(1)(c) is not applicable to the case of the assessee and further even if the assessee is treated as NRI, then also, there is need to analyze the taxability of income as an NRI in the light of section 5 and section 9 of the Income Tax Act, 1961, (hereinafter the Act). The issues involved in all the appeals were argued to be identical.
2. During hearing, of this appeal, the ld. CIT-DR, Shri N.P. Singh, advanced arguments, which is identical to the ground raised by contending that search action u/s 132 of the Act was carried out on 15/05/2008. The ld. CIT-DR also contended that the issue involved in all the assessment years is identical. It was pointed out that assessee is a resident and original passport was never produced by the assessee before the Assessing Officer. It was fairly agreed by the ld. CIT-DR that assessee was frequently going abroad and original passport was claimed to be lost. It was pleaded that there is contravention of Rule 46-A of the Rules by the ld. Commissioner of Income Tax (Appeals) but when questioned by the Bench and also objected by the assessee, it was again agreed that remand report was sought from the Assessing Officer by the ld. Commissioner of Income Tax (Appeals). Our attention was invited to section 6 of the Act by placing reliance upon the decision in 300 ITR 231 (SC). However, necessary enquiries were made by the Assessing Officer. Reliance was further placed upon the decision in 259 ITR 486 (SC). The crux of argument advanced by ld. CIT-DR is that the passport was not produced. At this stage, Shri Jitendra Sanghavi along with Shri Amit Khatiwala, the ld. counsel for the assessee, intervened and explained that passport was duly produced by the assessee by inviting our attention to page-18 of the paper book. It was fairly agreed by the ld. CIT-DR that in A.Y. 2005-06, the assessee was assessed as non-resident by the Assessing Officer. It was further claimed by the ld. CIT-DR that the evidence produced by the assessee are not relevant to the facts of the case and even the banks, while opening the NRE account may or may not see the passport and other documents.
2.1. On the other hand, the ld. counsel for the assessee, Shri Jitendra Sanghavi along with Shri Amit Khatiwala, defended the conclusion arrived at in the impugned order, firstly, inviting our attention to letter dated 09/02/2011, modifying the grounds and statement of facts. Assessee also filed additional evidence before the ld. Commissioner of Income Tax (Appeals) on which remand report was sought twice from the Assessing Officer as such additional evidence was filed from time to time by the assessee. It was pointed out that the Addl. CIT as well as the Assessing Officer, both were present before the ld. First Appellate Authority for which our attention was invited to page -1 of the impugned order evidencing the presence of both the officers. It was explained that for getting the status, the period of stay should be 182 days. It was pleaded that the assessee remained out of India for 187 days. The ld. counsel pointed out that the assessee is Managing Director of a Company, a non-resident so the global income cannot be assessed in India and the addition was deleted by the ld. Commissioner of Income Tax (Appeals) by confronting the factual position to the Assessing Officer and based upon evidence. It was explained that the amount was sent through banking channel and no addition can be made when the assessee is a non-resident Indian. The ld. counsel further asserted that when a bank account is opened by the bank, every document is examined including FEMA conditions, status and the accounts are not opened in a casual manner. Our attention was invited to page-18 of the impugned order by asserting that the addition was deleted based upon the evidence and not in a slip short manner as has been alleged by the ld. CIT-DR. It was explained that the date of arrival and departure are to be excluded while counting the period of stay for which reliance was placed upon the decision in DIT vs Manoj Kumar Reddy Nare (2011) 245 CTR 350 (Karn.); (2011) 12 www.taxguru.in 326 (Karn.) order dated 20/06/2011 and ITO vs Fausta C. Cordeiro (2012) 24 193 (Mumbai) order dated 29th June, 2012. The ld. counsel for the assessee also consented that the issue involved in all the appeals are identical.
2.2. We have considered the rival submissions and perused the material available on record. These appeals contains identical issues, were heard together, therefore, being disposed of by this common and consolidated order for the sake of brevity and convenience. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsels, if kept in juxtaposition and analyzed, the facts, in brief, are that the assessee is a non-resident Indian (as per statement of facts filed by the assessee). Undisputedly, his non-resident status was accepted by the Department all along in past as is evident from A.Y. 2005-06. The assessee was regularly filed its return of income in his individual capacity in the status of the non-resident and was accepted as such while framing the assessment u/s 143(3) of the Act. The Assessing Officer after due examination of period of stay, accepted the status of the assessee as “non-resident” (A.Y. 2005-06). A search action u/s 132 of the Act was carried out in the case of the assessee by the DDIT(Investigation) on 15/05/2008, while the assessee was abroad, at the premises of the company and also of the Directors (Shri CMP Singh, Amit Kumar, Rajesh Soni, Dilip Kumar Bhagat), the assessee. Consequent to the search, M/s Ganom Biotech Pvt. Ltd. (hereinafter in short GBPL) was also put to search. The cases of the present assessee (Mr. Binod Kumar Singh), his wife Ms. Sheila Singh, his daughter Ms. Trisha Singh were centralized and thus notice u/s 153A was issued on 24/07/2008 to the present assessee. The assessee, before the search, was assessed to tax in ward no.21(3)(1) Mumbai. He filed his return on 17/08/2008 for A.Y. 2008-09 in the said ward declaring income of Rs.93,41,381/-. In response to notice u/s 153A, he filed the return on 30/10/2008 declaring income of Rs.85,66,442/- for A.Y. 2008-09. It is noteworthy that, as per the Revenue, certain incriminating documents were found and seized. On examining of the documents, it was found that the company GBPL was operating in Ukraine, wherein, the company claimed huge amount of advertising and marketing expenses for marketing its products in that country. It was also found that payment towards these expenses were made to the companies based in Cyprus and UK. As per the Revenue, all these companies are controlled by Shri Binod Kumar, founder and CMD of GBPL and several rubber stamps of various companies/entities were also found in the companies premises during search. Shri Binod Kumar along with one of the Directors of GBPL, Mr. CMP Singh was examined on oath with respect to activities of the company. As per the Revenue, evasive replies were given by these persons and in the mid of investigation, Mr. Binod Kumar went abroad.
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