DCIT, New Delhi v. Sh. Suresh Nanda, New Delhi

ITA 3431/DEL/2013 | 2007-2008
Pronouncement Date: 11-04-2014 | Result: Dismissed

Appeal Details

RSA Number 343120114 RSA 2013
Assessee PAN EYEAR1985T
Bench Delhi
Appeal Number ITA 3431/DEL/2013
Duration Of Justice 10 month(s) 11 day(s)
Appellant DCIT, New Delhi
Respondent Sh. Suresh Nanda, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 11-04-2014
Date Of Final Hearing 28-01-2014
Next Hearing Date 28-01-2014
Assessment Year 2007-2008
Appeal Filed On 30-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI T.S. KAPOOR ACCOUNTANT MEMBER I.T.A. NO.2237 & 3718/DEL/2013 ASSESSMENT YEAR : 2007-08 & 08-09 SHRI SURESH NANDA ACIT 4-CASUARINA AVENUE CENTRAL CIRCLE-13 WESTEND GREENS NEW DELHI. RAJOKRI NEW DELHI. V. AND I.T.A. NO.3431 & 4641/DEL/2013 ASSESSMENT YEAR : 2007-08 & 2008-09 ACIT SHRI SURESH NANDA CENTRAL CIRCLE-13 4-CASUARINA AVENUE NEW DELHI. WESTEND GREENS RAJOKRI NEW DELHI. (APPELLANT) J\ESPONDENT) PAN /GIR/NO.AAPPN-9895-H ASSESSEE BY : SHRI AJAY WADHWA ADVOCATE. DEPARTMENT BY : SHRI RAMESH CHANDRA CIT-DR. ORDER PER TS KAPOOR AM: THESE ARE CROSS APPEALS TWO FILED BY THE ASSESSEE A ND TWO BY THE REVENUE FOR ASSESSMENT YEAR 2007-08 & 2008-09 AGAIN ST SEPARATE ORDERS OF LD CIT(A) DATED 18.3.2013 AND 22.5.2013 RESPECTIVELY. THESE APPEALS WERE HEARD TOGETHER THEREFORE FOR THE SAKE OF CONVENIENCE TH ESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER. THE GROUNDS OF A PPEALS FILED BY ASSESSEE AS WELL AS REVENUE FOR THESE TWO YEARS ARE DETAILED AS UNDER:- ITA NO2237 3718 3431&4641DEL/13 2 ASSESSMENT YEAR : 2007-08: (ASSESSEES APPEAL): 1. THAT THE ORDER OF THE LD CIT(A) NEW DELHI DATED 18.3.2013 IS BAD IN LAW AND IN FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD CIT(A) HAS ERRED IN UPHOLDING THE ACTION THE ASS ESSING OFFICER IN TAKING THE STATUS OF THE APPELLANT AS RESIDENT DURING THE YEAR AS AGAINST THE STATUS OF NON RESIDENT CLAIMED IN THE RETURN ACCEPTED BY THE DEPARTMENT CONSISTENTLY YEAR AFTER YEAR SINCE 1985. THAT DURING THE YEAR UNDER CONSIDERATION THE APPELL ANTS STAY IN INDIA EXCEEDED 182 DAYS AS HIS PASSPORT WAS ILLEGAL LY SEIZED BY THE CBI AND HE WAS COMPELLED TO STAY IN INDIA FOR R EASONS BEYOND HIS CONTROL AND ACCORDINGLY THE DOCTRINE OF IMPOSSI BILITY OF PERFORMANCE IS APPLICATION. 3. WHETHER WHILE DELETING THE ADDITION OF RS.17 94 15 000/- BEING SHARE CAPITAL OF UNIVERSAL BUSINESS SOLUTIONS MAURITIUS IN CLARIDGES PVT. LTD. THE LD CIT(A) CAN DIRECT THE A SSESSING OFFICER TO PURSUE THE REFERENCE MADE TO THE GOVT. OF MAURIT IUS AND TO MAKE FRESH REFERENCE TO THE GOVT. OF JERSEY AND BRI TISH VIRGIN ISLAND TO ARRIVE AT REAL FACTS REGARDING FLOR OF FU NDS AMONG VARIOUS ENTITIES ABROAD. 4. WHETHER THE LD CIT(A) IS JUSTIFIED IN SUSTAINING ON PROTECTIVE BASIS ADDITION OF RS.16 98 38 020/- BEIN G SHARE CAPITAL SUBSCRIBED BY PALM TECHNOLOGIES LTD. MAURITIUS IN C LARIDGES SEZ (P) LTD. BY OBSERVING / DIRECTING THE ASSESSING OFF ICER TO ASCERTAIN THE REAL FACTS BY PURSUING THE REFERENCE MADE TO TH E GOVT. OF MAURITIUS AND TO MAKE FRESH REFERENCE IN THE MATTER TO THE GOVT. /ADMINISTRATIONS OF JERSEY AND BRITISH VIRGIN ISLAN DS WITH WHICH INDIA NOW HAS TAX INFORMATION EXCHANGE AGREEMENTS. THAT THE ABOVE ADDITION SUSTAINED ON PROTECTIVE BAS IS IS AGAINST BASIC PRINCIPLES OF LAW AND THE LD CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION AFTER HAVING ARRIVED AT THE FIN DINGS THAT KEEPING IN VIEW OF THE PRESENT FACTS OF THE MATTER SHARE CAPITAL CANNOT BE TREATED AS UNEXPLAINED MONEY/INVESTMENT O F THE APPELLANT VIDE PARA 7.5. PAGE 50 OF THE APPELLATE O RDER. THAT THE LD CIT(A) HAS HELD THAT THE MONEY DOES NOT BELONG TO THE APPELLANT BUT THE COMPANY M/S UNIVERSAL BUSINES S SOLUTION LTD. SHARJAH. IN SPITE OF THIS FINDING THE LD CIT( A) HAS SUSTAINED THE ADDITION ON PROTECTIVE BASIS WHICH IS BAD IN LA W. ITA NO2237 3718 3431&4641DEL/13 3 5. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) ERRED IN HOLDING A SUM OF ` .7 29 000/- ON THE GROUND THAT THAT THE SAME REPRESENTED UNEXPLAINED CASH OUT OF T OTAL CASH FOUND DURING THE COURSE OF SEARCH BY THE CBI ON 10. 10.2006. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD CIT(A) HAS GROSSLY ERRED IN CONFIRMING AN ADDITI ON OF ` .28 47 533/- IN RESPECT OF INVESTMENT MADE IN THE R ENOVATION OF SONALI FARMS FROM APPELLANTS OVERSEAS BANK ACCOUNTS ON THE GROUND THAT DETAILS OF FOREIGN BANK ACCOUNT WERE NO T FURNISHED AND HOLDING THE APPELLANTS STATUS AS RESIDENT DURI NG THE YEAR AND SUBSEQUENTLY HIS GLOBAL INCOME IS TAXABLE IN INDIA. 6.1. THAT THE ADDITION OUGHT TO HAVE BEEN DELETED A S THE SAME HAS BEEN ADDED U/S 68 AND HENCE TANTAMOUNT TO DOUBL E TAXATION. 7. THAT THE LD CIT(A) HAS ERRED IN UPHOLDING THE AD DITION OF RS..5 10 57 115/- REPRESENTING APPELLANTS DEPOSITS IN DEUTSCHE BANK SINGAPORE ON THE GROUND OF THE APPELLANTS ST ATUS AS RESIDENT AND ACCORDINGLY HIS GLOBAL INCOME IS TAXAB LE IN INDIA. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF ASSESSI NG OFFICER I.E. THE SUM OF RS.23 66 190/- AS UNEXPLAINED CASH OUT O F TOTAL CASH FOUND OF RS..44 57 800/- DURING THE COURSE OF SEARC H U/S 132(1) ON 28.2.2007. 9. THAT THE APPELLANT PRAYS THE HON'BLE TRIBUNAL TO AWARD SUITABLE COST OF APPEAL UNDER SUB SEC. 2B OF SEC. 2 54 OF THE INCOME TAX ACT 1961 . 10. THE APPELLANT CRAVES LEAVE TO ADD ALTER REMOV E AND MODIFY ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEAR ING OF THE APPEAL. ASSESSMENT YEAR: 2008-09: (ASSESSEES APPEAL): 1. THAT THE ORDER OF THE LD CIT(A) NEW DELHI DATED 22.5.2013 IS BAD IN LAW AND IN FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD CIT(A) HAS ERRED IN UPHOLDING THE ACTION THE ASS ESSING OFFICER IN TAKING THE STATUS OF THE APPELLANT AS RESIDENT DURING THE YEAR AS AGAINST THE STATUS OF NON RESIDENT CLAIMED IN THE RETURN ITA NO2237 3718 3431&4641DEL/13 4 ACCEPTED BY THE DEPARTMENT CONSISTENTLY YEAR AFTER YEAR SINCE 1985. 2.1. THAT DURING THE YEAR UNDER CONSIDERATION THE APPELLANTS STAY IN INDIA EXCEEDED 182 DAYS AS HIS PASSPORT WAS ILLEGALLY SEIZED BY THE CBI AND HE WAS COMPELLED TO STAY IN INDIA FOR REASONS BEYOND HIS CONTROL AND ACCORDINGLY THE DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE IS APPLICATION. 3. WHETHER WHILE DELETING THE ADDITION OF RS. 3 96 87 500 /- BEING SHARE CAPITAL OF UNIVERSAL BUSINESS SOLUTIONS MAURITIUS IN CLARIDGES PVT. LTD. THE LD CIT(A) CAN DIRECT THE A SSESSING OFFICER TO PURSUE THE REFERENCE MADE TO THE GOVT. OF MAURIT IUS AND TO MAKE FRESH REFERENCE TO THE GOVT. OF JERSEY AND BRI TISH VIRGIN ISLAND TO ARRIVE AT REAL FACTS REGARDING FLOW OF FU NDS AMONG VARIOUS ENTITIES ABROAD AND HOLDING THAT THE ADDITI ON IS PRESENTLY DELETED. 4. WHETHER THE LD CIT(A) IS JUSTIFIED IN SUSTAINING ON PROTECTIVE BASIS ADDITION OF RS. 7 92 19 406/- BEIN G SHARE CAPITAL SUBSCRIBED BY PALM TECHNOLOGIES LTD. MAURITIUS IN C LARIDGES SEZ (P) LTD. BY OBSERVING / DIRECTING THE ASSESSING OFF ICER TO ASCERTAIN THE REAL FACTS BY PURSUING THE REFERENCE MADE TO TH E GOVT. OF MAURITIUS AND TO MAKE FRESH REFERENCE IN THE MATTER TO THE GOVT. /ADMINISTRATIONS OF JERSEY AND BRITISH VIRGIN ISLAN DS AND TO EXAMINE TRANSACTIONS AND FLOW OF MONEY TO VARIOUS E NTITIES. 4..1. THAT THE ABOVE ADDITION SUSTAINED ON PROTECTI VE BASIS IS AGAINST BASIC PRINCIPLES OF LAW AND THE LD CIT(A) O UGHT TO HAVE DELETED THE ENTIRE ADDITION AFTER HAVING ARRIVED AT THE FINDINGS THAT KEEPING IN VIEW OF THE PRESENT FACTS OF THE MA TTER SHARE CAPITAL CANNOT BE TREATED AS UNEXPLAINED MONEY/INVE STMENT OF THE APPELLANT VIDE PARA 7.5. PAGE 46 OF THE APPELLA TE ORDER. 4.2. THAT HAVING HELD THE MONEY DOES NOT BELONG TO THE APPELLANT BUT TO UBSS THE ADDITION SUSTAINED ON PROT ECTIVE BASIS IS BAD IN LAW AND OUGHT TO HAVE BEEN DELETED ON SUB STANTIVE BASIS. 5. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD CIT(A) ERRED IN HOLDING A CUM OF RS..8 45 288/- (10 000 GBP) ON THE GROUND THAT THAT THE SAME REPRESENTS FOREIGN RE MITTANCE TAXABLE IN INDIA. 6. THAT THE APPELLANT PRAYS THE HON'BLE TRIBUNAL TO AWARD SUITABLE COST OF APPEAL UNDER SUB SEC. 2B OF SEC. 2 54 OF THE INCOME TAX ACT 1961 . ITA NO2237 3718 3431&4641DEL/13 5 7. THE APPELLANT CRAVES LEAVE TO ADD ALTER REMOV E AND MODIFY ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. ASSESSMENT YEAR: 2007-08 (REVENUES APPEAL): 1. THE ORDER OF LD CIT(A) IS NOT CORRECT IN LAW AND FA CTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD C IT(A) HAS ERRED IN DELETING THE ADDITION OF RS.17 94 15 0 00/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INC OME MADE BY THE ASSESSEE IN M/S CLARIDGES HOTEL PVT. LTD. THROU GH M/S UNIVERSAL BUSINESS SOLUTION LTD. MAURITIUS AND THE VARIOUS INTERMEDIATELY COMPANIES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.16 98 38 020/- ON PROTECTIVE BASIS AS AGAINST SUBSTANTIVE BASIS IN TH E HANDS OF ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE BY ASSESSEE IN M/S CLARIDGES SEZ PVT. LTD. THROUGH M/S PALM TECH NOLOGIES LTD. MAURITIUS AND THE VARIOUS INTERMEDIATELY COMPA NIES CREATED FOR THIS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD C IT(A) HAS ERRED IN LAW IN ADJUDICATING THE ISSUES INVOLVE D WITH CERTAIN DIRECTIONS AND UPHELD THE ADDITION MADE BY ASSESSIN G OFFICER ON PROTECTIVE BASIS WHICH IS BEYOND THE POWERS OF CIT( A) AS SECTION 251(1)(A) OF THE IT ACT EMPOWERS CIT(A) ONLY TO CON FIRM REDUCE ENHANCE OR ANNUL THE ISSUES INVOLVED IN APPEAL. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD C IT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1 20 73 11 4/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED JEW ELLERY FOUND FROM POSSESSION OF HIS WIFE WITHOUT APPRECIATING TH E FACT THAT SMT. RENU NANDA DID NOT HAVE AN INDEPENDENT SOURCE O F INCOME AND THE SOURCE OF PAYMENT WAS ONLY SHRI SURESH NANDA. 6. THE APPELLANT CRAVES LEAVE TO ADD AMEND ANY ALL TH E GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. ASSESSMENT YEAR : 2008-09 (REVENUES APPEAL): 1. THE ORDER OF LD CIT(A) IS NOT CORRECT IN LAW AND FA CTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD C IT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3 96 87 50 0/- MADE BY ITA NO2237 3718 3431&4641DEL/13 6 THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INC OME MADE BY THE ASSESSEE IN M/S CLARIDGES HOTEL PVT. LTD. THROU GH M/S UNIVERSAL BUSINESS SOLUTION LTD. MAURITIUS AND THE VARIOUS INTERMEDIATELY COMPANIES. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS..7 92 19 406/- ON PROTECTIVE BASIS AS AGAINST SUBSTANTIVE BASIS IN TH E HANDS OF ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE BY ASSESSEE IN M/S PALM TECHNOLOGIES LTD. MAURITIUS AND THE VA RIOUS INTERMEDIATELY COMPANIES CREATED FOR THIS AND IN AD JUDICATING THE ISSUES INVOLVED WITH CERTAIN DIRECTIONS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD C IT(A) HAS ERRED IN LAW IN ADJUDICATING THE ISSUES INVOLVE D WITH CERTAIN DIRECTIONS AND UPHELD THE ADDITION MADE BY ASSESSIN G OFFICER ON PROTECTIVE BASIS WHICH IS BEYOND THE POWERS OF CIT( A) AS SECTION 251(1)(A) OF THE IT ACT EMPOWERS CIT(A) ONLY TO CON FIRM REDUCE ENHANCE OR ANNUL THE ISSUES INVOLVED IN APPEAL. 5. THE APPELLANT CRAVES LEAVE TO ADD AMEND ANY ALL TH E GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE DEPARTM ENT OF INCOME TAX RECEIVED INTELLIGENCE INFORMATION THAT ASSESSEE WAS INVOLVED IN BROKERING THE DEFENCE DEALS FOR DEPARTMENT OF DEFENCE PRODUCTION & SUPPLIES MINISTRY OF DEFENCE UNION OF INDIA AGAINST GOVT. POLICY. CONSE QUENT TO INFORMATION SEARCH OPERATIONS WERE CARRIED ON ASSESSEE BY THE INCOME- TAX DEPARTMENT. DEPARTMENT CLAIMED TO HAVE FOUND EVIDENCE THAT ASSE SSEE WAS GETTING HUGE AMOUNT OF COMMISSION FROM THE COMPANIES ABROAD WHIC H WAS RECEIVED BY HIM OUTSIDE THE COUNTRY AND WAS BROUGHT INTO INDIA IN THE FORM OF FDI FOR MAKING INVESTMENTS INTO VARIOUS HOTELS LAND AND OTHER PRO PERTIES. THE ASSESSING OFFICER ON THE BASIS OF INFORMATION AND DOCUMENTS M ADE THE FOLLOWING ADDITIONS TO THE INCOME OF ASSESSEE IN THESE TWO YEARS AND F URTHER DENIED THE CLAIM OF THE ASSESSEE TO BE TREATED AS NRI:- ITA NO2237 3718 3431&4641DEL/13 7 A.Y. A.Y. 2007-08 2008-09 ADDITION ON A/C OF INVESTMENT INTO CLARIDGES HOTEL PVT. LTD. BY UNIVERSAL BUSINESS SOLUTIONS LTD. 179415000/- 39687500/- INVESTMENT BY PALM TECHNOLOGIES IN MAURITIUS CLARIDGES. 169838020/- 79219406/- UNEXPLAINED CASH FOUND DURING SEARCH ON 10.10.2006/ 729000/- - INVESTMENT MADE IN RENOVATION OF SONALI FARMS FROM APPELLANTS OVERSEAS BANK A/C. 2847533/- - DEPOSIT IN DEUTSCHE BANK SINGAPORE. 51057115/- - UNEXPLAINED CASH FOUND AT THE TIME OF SEARCH. 2366190/- - FOREIGN REMITTANCE TAXABLE IN INDIA. -- 845288/- 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER ASSES SEE FILED APPEALS BEFORE LD CIT(A) AND MADE VARIOUS SUBMISSIONS. ONE OF THE GROUNDS RAISED BY THE ASSESSEE WAS TO THE EFFECT THAT HE WAS ASSES SED AS NON RESIDENT FROM THE YEAR 1985 TO 2006. FOR IMPUGNED YEARS HE HAS F ILED INCOME TAX RETURNS AS NON RESIDENT. HIS STAY IN INDIA DURING THE YEAR S UNDER CONSIDERATION HAD EXCEEDED 182 DAYS BECAUSE OF REASONS BEYOND HIS CONT ROL AS HIS PASSPORT WAS ILLEGALLY IMPOUNDED BY GOVT. AGENCIES AND HE WA S UNABLE TO TRAVEL FROM INDIA. ASSESSEE SUBMITTED THAT HE REMAINED AS NON R ESIDENT AS HE WAS FORCED TO BECOME RESIDENT BECAUSE OF ILLEGAL IMPOUN DING OF HIS PASSPORT. THE LD CIT(A) AFTER GOING THROUGH THE SUBMISSIONS O F ASSESSEE CONFIRMED THE ORDER OF AO ON THIS ISSUE AND HELD HIM TO BE A RESI DENT AS PER LITERAL MEANING OF THE PROVISIONS OF THE ACT. HE HOWEVER PARTLY DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON MERITS A ND FURTHER UPHELD CERTAIN ITA NO2237 3718 3431&4641DEL/13 8 ADDITIONS TO BE ADDED ON PROTECTIVE BASIS. VARIOUS GROUNDS OF APPEALS OF ASSESSEE HAS BEEN DEALT BY LD CIT(A) AS UNDER:- A) REGARDING RESIDENTIAL STATUS: 5.3 1 HAVE CONSIDERED THE FACTS AND THE SUBMISSION S MADE. THE HON'BLE LTAT DELHI IN APPELLANT'S OWN CASE IN IT A NOS.1428 1429 & 1430/DEL/2012 (FOR A YS 2001-02 2002-03 AND 2003-04 RESPECTIVELY) HAVE RULED IN FAVOUR OF THE APPELLAN T AND HELD HIM TO BE 'NON-RESIDENT VIDE PARA-8 OF ITS ORDER DATED 24.07.2012. DETAILED REASONS HAVE BEEN GIVEN BY THE LTAT. ACCOR DINGLY AND RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE ITAT I HAVE HELD THE APPELLANT TO BE 'NON-RESIDENT' FOR A.YS 2004-05 20 05-06 AND 2006- 07 ALSO ON THE GROUND THAT PLAIN READING OF THE RE LEVANT PROVISIONS MANDATES THAT ANY INDIVIDUAL WHO IS IN I NDIA FOR A PERIOD OF 182 DAYS OR MORE IS A RESIDENT FOR THAT Y EAR. THE LAW DOES NOT PROVIDE FOR THE REASONS FOR RESIDENCY. IN TAX LAW AS IN GENERAL LAW LITERAL CONSTRUCTION IS THE FUNDAMENTA L RULE. OTHER RULES OF INTERPRETATION ARE TO BE RESORTED TO ONL Y WHEN THE LITERAL CONSTRUCTION IS NOT CLEAR OR IS AMBIGUOUS OR IT RESULTS IN ABSURDITY. THE PRINCIPLE OF 'READING DOWN' OF THE PROVISIONS I S NOT APPLICABLE IN THE INSTANT CASE AS THE PLAIN MEANING OF THE WOR DS USED IS UNAMBIGUOUS AND CLEAR. THE APPELLANT HAS HIMSELF US ED IT TO HIS ADVANTAGE AND ACCEPTED THE SAME IN THE ORDER OF HON 'BLE ITAT AND MY ORDERS. HAVING DONE SO APPELLANT CANNOT NOW AGITATE THE CONTRARY POSITION AND DERIVE ADVANTAGE AGAIN OUT OF THAT CONTRARY POSITION. SECONDLY POSSIBILITY OF PERFORMANCE IS AL SO NOT APPLICABLE IF THE APPELLANT REMAINED IN INDIA BY OP ERATION OF THE LAW AND PROCEDURE ESTABLISHED EVEN THOUGH FOR NO F AULT ON HIS PART. CERTAINLY IT WAS NOT THE CASE THAT HE WAS CO MPELLED TO AN DISADVANTAGED POSITION. THIRDLY THE INCIDENCE OF T AXATION DUE TO HIS RESIDENTIAL STATUS IS ONLY AN UNINTENDED CONSEQ UENCE OF CERTAIN PROCEEDINGS WHICH HAD NO CONNECTION WHATSO EVER WITH PROCEEDINGS UNDER THE TAX LAWS. FOURTHLY NO LEGAL INJURY HAS BEEN CAUSED TO THE APPELLANT. RESIDENTIAL STATUS IS DETERMINED BY NUMBER OF DAYS IN INDIA PLAINLY AND IF A RESIDENT IS TAXABLE ON HIS GLOBAL INCOME HE WILL BE GIVEN CREDIT FOR TAXES PA ID ON INCOME ACCRUING OR ARISING OUTSIDE INDIA IN TERMS OF THE D OUBLE TAXATION AVOIDANCE AGREEMENT / TREATY WITH THE RESPECTIVE CO UNTRIES. IN THESE CIRCUMSTANCES AND LEGAL POSITION OF THE MATTE R THE STATUS OF THE APPELLANT IS HELD AS 'RESIDENT' FOR EVERY A. Y. WHEREIN HE HAS STAYED IN INDIA FOR 182 DAYS OR MORE INCLUDING THE CURRENT A Y. B) REGARDING ADDITIONS IN THE HANDS OF ASSESSEE ON ACCOUNT OF INVETMENT MADE BY UNIVERSAL BUSINESS SOLUTIONS MAURI TIUS IN THE CLARIDGES HOTELKS (P) LTD. ITA NO2237 3718 3431&4641DEL/13 9 6.5 I HAVE CONSIDERED THE ASSESSMENT ORDER SUBMISS IONS MADE AND THE RECORDS RELEVANT TO THE MATTER IN ISSUE HER E. IN FACT THERE ARE SEVERAL ASPECTS OF THE MATTER - (A) WHETH ER INCOME ACCRUED OR AROSE TO THE APPELLANT IN INDIA WHICH WA S NOT DISCLOSED BY HIM FOR TAX PURPOSES (B) WHETHER SUCH INCOME WA S RECEIVED BY HIM ABROAD AND ROUTED AS INVESTMENTS INTO INDIA AND (C) WHETHER SUCH INVESTMENTS CAN BE TAXED IN THE HANDS O F THE APPELLANT OR THE ENTITIES WHEREIN THE INVESTMENTS H AVE BEEN BROUGHT IN. THE UNDISPUTED FACTS ARE THAT UBS (UNIVE RSAL BUSINESS SOLUTIONS) IS AN ENTITY DULY INCORPORATED UNDER THE LAW IN MAURITIUS. THE SAID UBS HAS INVESTED IN CLARIDGES HO TELS P LTD. AS FOREIGN DIRECT INVESTMENT (FDI) UNDER THE AUTOMATIC ROUTE PERMISSIBLE BY THE GOVERNMENT OF INDIA FOR THE HOSP ITALITY INDUSTRY. IT HAS TAKEN ALL NECESSARY APPROVALS AND COMPLIED WITH ALL NEW RULES AND REGULATIONS PRESCRIBED BY THE GOV ERNMENT IN THIS REGARD. THERE IS NO EVIDENCE ON RECORD THAT IT HAS NOT DONE SO. THE OWNERSHIP OF UBSM IS KNOWN FROM THE RESPONSE RE CEIVED FROM THE GOVT. OF MAURITIUS FROM THE ADDITIONAL EV IDENCE FILED BY THE APPELLANT AND FROM THE SEIZED DOCUMENTS ITSELF . 20% OWNERSHIP OF UBSM IS HELD BY INFOTEC SERVICES LTD. A COMPANY INCORPORATED IN JERSEY WHEREIN THE APPELLANT IS UN DISPUTEDLY A SHAREHOLDER. REMAINING 80% EQUITY IS HELD BY TWO CO MPANIES INCORPORATED IN THE BRIT'SH VIRGIN ISLANDS WHICH A RE UNDER THE CONTROL OF ONE MR. HUGH HAMILTON. EQUITY BASE OF UB SM IS USD 2 MILLION. THE EQUITY OF INFOTEC INVESTED IN UBSM IS O NLY TO THE TUNE OF USD 400 000 AND AS PER THE BALANCE SHEET AVAILABL E UBSM RAISED RESOURCES / BORROWINGS OF USD 100.77 MILLION TO INVEST IN SUBSIDIARIES INCLUDING CLARIDGES. DETAILS OF THE S OURCES OF BORROWINGS OR THE INVESTMENTS MADE ARE NOT KNOWN. T HERE IS NO EVIDENCE YET TO ESTABLISH THAT THE MONEY BROUGHT IN AS FDI BY UBSM WAS SOURCED FROM THE APPELLANT OR ANY ENTITY UN DER HIS CONTROL. THERE CANNOT BE ANY PRESUMPTION AS TO FACT S. THEREFORE IN THE PRESENT FACTS OF THE CASE THE ADDITION OF I NVESTMENTS MADE BY UBSM IN TO CLARIDGES HOTEL AS UNEXPLAINED INVESTME NT OF THE APPELLANT CANNOT BE LEGALLY SUSTAINED. THE PRIMARY ONUS OF ESTABLISHING THE TRANSACTION STANDS DISCHARGED BY T HE APPELLANT AND IT IS UP TO THE REVENUE TO USE THE MACHINERY AT ITS DISPOSAL TO GET AT THE MATTER. ACCORDINGLY I DIRECT THE AO TO PURSUE THE REFERENCE MADE TO THE GOVT. OF MAURITIUS AND ALSO TO MAKE FRESH REFERENCE IN THE MATTER TO THE GOVERNMENTS / ADMINI STRATIONS OF JERSEY AND BRITISH VIRGIN ISLANDS WITH WHICH INDIA NOW HAS TAX INFORMATION EXCHANGE AGREEMENTS TO ARRIVE AT THE R EAL FACTS BY EXAMINING INTERCONNECTED TRANSACTIONS AND THE FLOW OF FUNDS AMONG VARIOUS ENTITIES INVOLVED. THE ADDITION MADE IS PRESENTLY DELETED. ITA NO2237 3718 3431&4641DEL/13 10 C) REGARDING ADDITION IN THE HANDS OF ASSESSEE ON A CCOUNT OF INVESTMENT MADE BY PALM TECHNOLOGIES LTD. INTO CLAR IDGES SEZ. 7.5 I HAVE CONSIDERED THE ASSESSMENT ORDER AND SUBM ISSIONS MADE. THE UNDISPUTED FACTS ARE THAT INVESTMENT AS S HARE CAPITAL HAS BEEN BROUGHT INTO CLARIDGES SEZ BY PALM TECHNOLO GIES LIMITED (PTL) A COMPANY DULY REGISTERED IN MAURITI US. THE OWNERSHIP OF PTL IS KNOWN FROM THE RESPONSE RECEIV ED FROM THE GOVT. OF MAURITIUS FROM THE EVIDENCE FILED BY THE APPELLANT AND FROM THE SEIZED DOCUMENTS ITSELF. THE APPELLANT IS NOT A SHAREHOLDER IN PTL WHICH IS OWNED BY ONE MR. E.A. HALF11AND. THE APPELLANT IS HOWEVER 99% SHAREHOLDER / OWNER OF UNIVERSAL BUSINESS SOLUTIONS FZC (UBSS) AN ENTITY DULY INCORPOR ATED UNDER THE LAW IN SHARJAH. DIVIDEND DECLARED BY UBSS AND PAY ABLE TO THE APPELLANT WAS INVESTED IN INFOTECH SERVICES LTD . (ISL) CHANNEL ISLANDS AND MIDEAST CONSORTIUM SA (MCSA) BRITISH VIRGIN ISLANDS AT THE INSTRUCTION OF APPELLANT. AP PELLANT HAS CONTROLLING INTEREST IN ISL. THE EQUITY BASE OF PTL IS USD 1 001 ONLY. THE INVESTMENT OF PTL IN CLARIDGE'S SEZ IS SEE N TO BE EMANATING FROM LOAN / BORROWINGS FROM UBSS OF USD 3 00 0 000 AND FROM Y2K SIL (ANOTHER COMPANY IN WHICH THE APPEL LANT HOLDS INTEREST) OF USD 431 197. THUS UNLIKE IN THE CASE O F UBSM (IN PARA-6 ABOVE) IN THE PRESENT INSTANCE THERE IS A B ACKWARD LINK BETWEEN FUNDS TRANSFERRED FROM PTL TO CLARIDGES SEZ WHICH HAVE BEEN SOURCED FROM ENTITIES UNDER THE CONTROL OF THE APPELLANT (UBSS & 1SL). HOWEVER THE MOOT QUESTION IS WHETHER MO NEY SOURCED FROM UBSS AND LSL EVEN THOUGH THE APPELLANT HA S INTEREST / CONTROLLING INTEREST IN THOSE COMPANIES CAN BE T REATED AS INCOME OF THE APPELLANT? I FIND THAT ON PRESENT FA CTS IT CANNOT BE SO HELD UNLESS THERE IS EVIDENCE TO INDICATE THA T THE RESOURCES AND INCOMES OF THESE TWO ENTITIES ARE NOTHING BUT I NCOMES ACCRUED OR ARISING TO THE APPELLANT. IT IS UNDISPUT ED HAVING BEEN MENTIONED IN THE ASSESSMENT ORDER THAT UBSS HAD SUBS TANTIAL RESOURCES AND INCOMES GENERATED THROUGH ITS ACTIVIT IES AS REFLECTED IN ITS ACCOUNTS. THERE IS NO EVIDENCE YET TO ESTABLISH THAT MONEY BROUGHT INTO CLARIDGES SEZ AS FDI BY UBSS W AS DIRECTLY ATTRIBUTABLE TO THE PERSONAL INCOME / ASSE TS OF APPELLANT. BUT AS MENTIONED EARLIER UNLIKE IN THE INSTANCE DISCUSSED IN THE PREVIOUS GROUND OF APPEAL IN THIS INSTANCE THE FUNDS DID FLOW FROM THE ENTITIES UNDER THE APPELLAN T'S CONTROL. YET IT CAN BE TAXED AS INCOME OR THE APPELLANT ONL Y IF THERE IS DIRECT LINK TO OF THE INVESTMENT TO THE ASSETS I IN COME OF THE APPELLANT. THE HON'BLE LTAT HAD. VIDE PARA-LO OF IT S ORDER DATED 24.07.2012 REMANDED THE MATTER BACK TO THE AO ON S IMILAR FACTS TO EXAMINE IF THE ADDITIONS CAN BE MADE AT ALL AND IN WHOSE HANDS THE ADDITIONS ARE TO BE MADE. THEREFORE IN T HE PRESENT ITA NO2237 3718 3431&4641DEL/13 11 FACTS OF THE MATTER ALTHOUGH IT CANNOT BE HELD THA T THE AMOUNT IS UNEXPLAINED MONEY / INVESTMENT OF THE APPELLANT THE SOURCE OF MONEY EMANATING FROM ENTITIES UNDER THE CONTROL OF THE APPELLANT THE ADDITION OUGHT TO BE SUSTAINED ON A P ROTECTIVE BASIS TILL THE REAL' FACTS ARE ASCERTAINED FOR WHICH NECESSARY REFERENCE S BE MADE OR PURSUED AS ALREADY DIRECTED. I HOLD ACCO RDINGLY AND DIRECT THE AO TO PURSUE THE REFERENCE MADE TO THE G OVT. OF MAURITIUS AND ALSO TO MAKE FRESH REFERENCES IN THE MATTER TO THE GOVERNMENTS / ADMINISTRATIONS OF JERSEY AND BRITISH VIRGIN ISLANDS WITH WHICH INDIA NOW HAS TAX INFORMATION EXC HANGE AGREEMENTS TO ARRIVE AT THE REAL FACTS BY EXAMINING INTERCONNECTED TRANSACTIONS AND THE FLOW OF FUNDS A MONG VARIOUS ENTITIES INVOLVED. IN PARA-6.5 AND 6.6 ABOVE I HAV E CONSIDERED THE MATTER IN DETAIL. THIS DECISION IS IN CONSONANCE WI TH THE DECISION OF HON'BLE ITAT AS ABOVE. THE ADDITION IS SUSTAINED ON PROTECTIVE BASIS AS UNEXPLAINED INVESTMENTS U/S 69 IN THE HANDS OF APPELLANT. D) REGARDING CASH FOUND AT THE PREMISES OF ASS ESSEE. 8.2 I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS MADE. CASH OF OVER ` ..L CRORE WAS FOUND DURING SEARCH BY THE CBI ON 10. 10.2006 AT VARIOUS PREMISES BELONGING TO THE APPELLANT AND CONNECTED ENTITIES PERSONS OUT OF WHICH THE APPELLANT CLAIM ED OWNERSHIP OF ` .20 64 000/-. THE AO FOUND THAT OUT OF BANK WITHDRA WALS OF ` .22 35 000/- MADE BY THE APPELLANT ` .14 20 0001- WAS MADE UP TO 30.06.2006 I.E. 4 MONTHS BEFORE THE SEARCH BY C BI. THE AO ESTIMATED THE MONTHLY EXPENSES OF THE APPELLANT AT RS.1 50 0001-AND OBSERVING THAT WITHDRAWALS ACCOUNTED F OR ONLY ABOUT ` ..13 35 OOO/- HELD THE REMAINING CASH OF ` .20 64 000/- MINUS ` .13 35 000/- ` .729 000/- AS UNEXPLAINED IN THE / HANDS OF THE APPELLANT. I DO NOT FIND ANY INFIRMITY WITH CON CLUSIONS REACHED BY THE AO. THE NEED FOR KEEPING LARGE QUANT ITIES OF CASH IS INEXPLICABLE PARTICULARLY IN VIEW OF SUBSTANTIA L BUSINESS OF THE APPELLANT ABROAD AND IN INDIA AND THE AVAILABILITY OF ANYTIME ANYWHERE BANKING 1 ATM FACILITIES. THE AO HAS BEEN FAIR IN TREATING ` .13 35 000/- AS EXPLAINED. THE ADDITION IS SUSTAINE D U/S 69 A. THERE IS NO MERIT IN THIS GROUND OF APPEAL AN D IS ACCORDINGLY DISMISSED. E) REGARDING INVESTMENT MADE ON ACCOUNT OF RENOVATI ON OF SONALI FARMS FROM ASSESSEES OVERSEAS BANK ACCOUNTS. 4. THE SUBMISSIONS FILED ON BEHALF OF THE APPELLANT IN THIS REGARD ARE AS UNDER:- ITA NO2237 3718 3431&4641DEL/13 12 'THE ASSESSING OFFICER MADE AN ADDITION OF RS.28 4 7 533/- BEING INVESTMENT MADE IN SONALI FARMS FROM OVERSEAS BANK A CCOUNT. ACCORDING TO THE ASSESSING OFFICER THE APPELLANT IS A RESIDENT OF INDIA AND THE PAYMENTS MADE FROM ABROAD IN FAVOUR O F CONSULTANTS FOR CONSTRUCTION OF SONALI F'ARMS HAVE TO BE ADDED AS UNEXPLAINED INVESTMENT SINCE THE DETAILS OF VALUATI ON BANK ACCOUNT FROM WHICH THESE PAYMENTS HAVE BEEN MADE HA VE NOT BEEN FURNISHED. IT IS RESPECTFULLY SUBMITTED THAT T HE ASSESSEE IS A NON-RESIDENT. THE PAYMENTS MADE FROM ABROAD HAVE BE EN SOURCED OUT OF THE BANK ACCOUNT SINGAPORE AND THE SAID FACT WAS PLACED BEFORE THE ASSESSING OFFICER. THE AO HAS MADE THE A DDITION IN PURSUANCE OF ASSESSING THE RESIDENTIAL STATUS OF TH E ASSESSEE AS 'RESIDENT' FROM NON RESIDENT STATING THAT HIS INCOM E ACCRUES TO HIM OUT OF SOURCES IN INDIA. THIS BASIS HAS BEEN TH E SUBJECT IN THE RELEVANT GROUNDS AND DETAILED SUBMISSIONS ARE ALREA DY ON RECORD BEFORE YOUR GOODSELF. NEEDLESS TO ADD THAT ALL THE CREDITS IN THE SINGAPORE BANK ACCOUNT HAVE ALREADY UNEXPLAINED INCO ME U/S 68 OF THE ACT AND THEREFORE THE ADDITION IN RESPECT OF THE DEBITS ALSO TANTAMOUNT TO MAKING DOUBLE ADDITION OF THE SA ME INCOME. HENCE ON THIS COUNT ALSO THE ADDITION DESERVES TO B E DELETED. 9.4 I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS MADE. FIRSTLY IT IS FOR THE APPELLANT TO EXPLAIN THE SOURCE OF IN VESTMENTS / EXPENDITURE IN AN ASSET HELD / OWNED BY HIM IN INDI A. IN THE PRESENT CASE THE APPELLANT HAS FAILED TO DO SO. TH E PRIMARY ONUS NOT HAVING BEEN DISCHARGED IN THE MATTER THE APPEL LANT MUST SUFFER THE CONSEQUENCES. SECONDLY THE APPELLANT HAS BEEN HELD TO BE 'RESIDENT' FOR TAX PURPOSES DURING THIS A.Y. THUS EVEN IF THE AMOUNT ORIGINATED FROM SINGAPORE / FOREIGN BANK ACCO UNT(S) OF THE APPELLANT THE GLOBAL INCOME OF THE APPELLANT I S TAXABLE AND HE SHALL BE ENTITLED ONLY TO CREDIT FOR TAXES PAID ABROAD UNDER THE RELEVANT DTAA. THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THAT THE AMOUNTS PAID ARE FROM DEUTSCHE BANK SINGAP ORE. THEREFORE THESE GROUNDS OF APPEAL ARE DISMISSED AN D ADDITION MADE BY THE AO IS SUSTAINED U/S 69 UNEXPLAINED EXPE NDITURE OF THE APPELLANT IN SONALI FARMS AN ASSET HELD IN INDI A. F) REGARDING DEPOSITS IN DEUTCHE BANK SINGA PORE. 10.3. I HAVE CONSIDERED THE SUBMISSIONS. THE PRIMAR Y ONUS OF ` EXPLAINING THE NATURE OF THE TRANSACTIONS AND SOURC ES THEREOF RECORDED IN DOCUMENTS SEIZED FROM THE PREMISES / PO SSESSION OF THE APPELLANT HAS NOT BEEN DISCHARGED BY THE APPEL LANT. THE PRESUMPTIONS U/S 132( 4A) AND U/S 292C THUS BECOME BINDING. ITA NO2237 3718 3431&4641DEL/13 13 THE CLAIM OF THE APPELLANT THAT THE DEPOSITS REPRES ENT MATURITY PROCEED OF OLD/EARLIER DEPOSITS IN CITIBANK UK REMA INS UNSUBSTANTIATED. THE APPELLANT HAS BEEN HELD TO BE 'RESIDENT' FOR TAX PURPOSES DURING THIS A Y. THEREFORE THE EARLIE R DECISION HOLDING THE APPELLANT AS 'NON-RESIDENT' IS NOT APPL ICABLE. ALSO EVEN IF THE AMOUNTS REPRESENT APPELLANT'S FOREIGN I NCOME HIS GLOBAL INCOME IS TAXABLE AND HE SHALL BE ONLY ENTIT LED TO CREDIT FOR TAXES PAID ABROAD UNDER THE RELEVANT DTAA. THIS GROUND OF APPEAL IS DEVOID OF ANY MERIT AND IS THEREFORE DI SMISSED. THE ADDITION IS SUSTAINED AS UNEXPLAINED CREDITS I DEPO SITS / EXPENDITURE IN THE BANK ACCOUNT OF THE APPELLANT AN D ALSO HIS INCOME NOT DISCLOSED IN HIS TAX RETURNS CHARGEABLE TO TAX U/SS 68 OR 69 OR 69A OR 69C AS MAY BE APPLICABLE. G) REGARDING UNEXPLAINED CASH FOUND DURING SEARCH O N 28.2.2007. 11. THE NINTH GROUND OF APPEAL (RENUMBERED) IS AGAI NST ADDITION OF ` .23 66 190/- AS UNEXPLAINED CASH FOUND DURING THE COURSE OF INCOME-TAX SEARCH U/S 132 ON 28.02.2007. THE SUBMIS SION OF APPELLANT IS REPRODUCED IN PARA-8.L ABOVE. FACTS AR E THAT FROM THE RESIDENCE OF THE APPELLANT AND HIS WIFE AND TW O BANK LOCKERS HELD BY HIM/WIFE/SON TOTAL CASH AMOUNTING TO ` .45 47 800/- WAS FOUND OUT OF WHICH ` .32 71 300/- WAS SEIZED. DURING ASSESSMENT APPELLANT CLAIMED TOTAL BANK WITHDRAWALS OF ` ..60 45 610/-. THE AO HELD THAT EXPLAINED CASH IN VIEW OF PERSONAL EX PENSES ESTIMATED AT ` .1.50 000/- PER MONTH AND CASH OF ` ..20 64 OOO/- FOUND EARLIER ON 10.10.2006 IN THE CBI SEARCH WAS ` .38 64 000/- AND THE BALANCE CASH OF ` .23 66 L90/REMAINED UNEXPLAINED. HE THEREFORE MADE AN ADDITION OF ` .23.66 190/- AS UNEXPLAINED CASH. THERE IS NO INFIRMITY IN THE DECISION TAKEN B Y THE AO. HE HAS ALSO BEEN REASONABLE IN NOT ADDING THE ENTIRE C ASH FOUND. THE ADDITION MADE IS THEREFORE UPHELD AS UNEXPLAINED MONEY U/S 69A. THIS GROUND OF APPEAL IS ACCORDINGLY DISMISS ED. H) REGARDING RESIDENTIAL STATUS IN THE ASSESSMEN T YEAR 2008-09. 5.3 1 HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS MADE. THE HON'BLE ITAT DELHI IN APPELLANT'S OWN CASE IN IT A NOS.1428 1429 & 1430/DEL/2012 (FOR A YS 2001-02 2002-03 AND 2003-04 RESPECTIVELY). HAVE RULED IN FAVOUR OF THE APPELLAN T AND HELD HIM TO BE 'NON-RESIDENT' VIDE PARA-8 OF ITS ORDER DATED 24.07.2012. DETAILED REASONS HAVE BEEN GIVEN BY THE ITAT. ACCOR DINGLY AND RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE ITAT I HAVE HELD THE APPELLANT TO BE 'NON-RESIDENT' FOR A.YS 2004-05 20 05-06 AND 2006- ITA NO2237 3718 3431&4641DEL/13 14 07 ALSO ON THE GROUND THAT PLAIN READING OF THE RE LEVANT PROVISIONS MANDATES THAT ANY INDIVIDUAL WHO IS IN I NDIA FOR A PERIOD OF 182 DAYS OR MORE IS A RESIDENT FOR THAT Y EAR. THE LAW DOES NOT PROVIDE FOR THE REASONS FOR RESIDENCY. IN TAX LAW AS IN GENERAL LAW LITERAL CONSTRUCTION IS THE FUNDAMENTA L RULE. OTHER RULES OF INTERPRETATION ARE TO BE RESORTED TO ONLY WHEN THE LITERAL CONSTRUCTION IS NOT CLEAR OR IS AMBIGUOUS OR IT RES ULTS IN ABSURDITY. THE PRINCIPLE OF 'READING DOWN' OF THE P ROVISIONS IS NOT APPLICABLE IN THE INSTANT CASE AS THE PLAIN MEANING OF THE WORDS USED IS UNAMBIGUOUS AND CLEAR. THE APPELLANT HAS HI MSELF USED IT TO HIS ADVANTAGE AND ACCEPTED THE SAME IN THE ORDER OF HON'BLE ITAT AND MY ORDERS. HAVING DONE SO APPELLANT CANNO T NOW AGITATE THE CONTRARY POSITION AND DERIVE ADVANTAGE AGAIN OUT OF THAT CONTRARY POSITION. SECONDLY 'IMPOSSIBILITY OF PERFORMANCE' IS ALSO NOT APPLICABLE IF THE APPELLANT REMAINED IN IN DIA BY OPERATION OF THE LAW AND PROCEDURE ESTABLISHED EVE N THOUGH FOR NO FAULT ON HIS PART. CERTAINLY IT WAS NOT THE CAS E THAT HE WAS COMPELLED TO ANY DISADVANTAGED POSITION. THIRDLY T HE INCIDENCE OF TAXATION DUE TO HIS' RESIDENTIAL STATUS IS ONLY AN UNINTERRUPTED CONSEQUENCE OF CERTAIN PROCEEDINGS WHICH HAD NO CO NNECTION WHATSOEVER WITH PROCEEDINGS UNDER THE TAX LAWS. FOU RTHLY NO LEGAL INJURY HAS BEEN CAUSED TO THE APPELLANT. RESI DENTIAL STATUS IS DETERMINED BY NUMBER OF DAYS IN INDIA PLAINLY AND IF A RESIDENT IS TAXABLE ON HIS GLOBAL INCOME HE WILL B E GIVEN CREDIT FOR TAXES PAID ON INCOME ACCRUING OR ARISING OUTSID E INDIA IN TERMS OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT / TREATY WITH THE RESPECTIVE COUNTRIES. IN THESE CIRCUMSTANCE AND LEGAL POSITION OF THE MATTER THE STATUS OF THE APPELLANT IS HELD AS 'RESIDENT FOR EVERY A Y WHEREIN HE HAS STAYED IN INDIA FOR 182 DA Y OR MORE INCLUDING THE CURRENT A.Y. (AS 1 HAVE ALREADY HELD IN APPELLANT'S OWN CASE FOR A.Y. 2007-08 IN APPEAL NO.82/11-12 VID E ORDER DATED 18.3.2013). I) REGARDING ADDITION IN THE HANDS OF ASSESSEE ON A CCOUNT OF INVESTMENT MADE BY UNIVERSAL BUSINESS SOLUTION IN CL ARIDGES HOTELS (P) LTD. 6.3 I HAVE CONSIDERED THE ASSESSMENT ORDER SUBMISS IONS MADE AND THE RECORDS RELEVANT TO THE MATTER IN ISSUE HER E. IN FACT THERE ARE SEVERAL ASPECTS OF THE MATTER (A) WHETHER INCOME ACCRUED OR AROSE TO THE APPELLANT IN INDIA WHICH WA S NOT DISCLOSED BY HIM FOR TAX PURPOSES (B) WHETHER SUCH INCOME WA S RECEIVED BY HIM ABROAD AND ROUTED AS INVESTMENTS INTO INDIA AND (C) WHETHER SUCH INVESTMENTS CAN BE TAXED IN THE HANDS OF THE APPELLANT OR THE ENTITIES WHEREIN THE INVESTMENTS H AVE BEEN BROUGHT IN. THE UNDISPUTED FACTS ARE THAT UBSM (UNIV ERSAL ITA NO2237 3718 3431&4641DEL/13 15 BUSINESS SOLUTIONS) IS AN ENTITY DULY INCORPORATED U NDER THE LAW IN MAURITIUS. THE SAID UBSM HAS INVESTED IN CLARIDGE S HOTELS PVT. LTD. AS FOREIGN DIRECT INVESTMENT (FDL) UNDER THE A UTOMATIC ROUTE PERMISSIBLE BY THE GOVERNMENT OF INDIA FOR THE HOSP ITALITY INDUSTRY. IT HAS TAKEN ALL NECESSARY APPROVALS AND COMPLIED WITH ALL NECESSARY REQUIREMENTS UNDER THE STATED POLICY RULES AND REGULATIONS PRESCRIBED BY THE GOVERNMENT IN THIS RE GARD. THERE IS NO EVIDENCE ON RECORD THAT IT HAS NOT DONE SO. THE OWNERSHIP OF UBSM IS KNOWN FROM THE RESPONSE RECEIVED FROM THE G OVT. OR MAURITIUS FROM THE ADDITIONAL EVIDENCE FILED BY TH E APPELLANT AND FROM THE SEIZED DOCUMENTS ITSELF. 20% OWNERSHIP OF UBSM IS HELD BY ONE INFOTEC SERVICES LTD. A COMPANY INCORPO RATED IN JERSEY. WHEREIN THE APPELLANT IS UNDISPUTEDLY A SHA REHOLDER. REMAINING 80% EQUITY IS HELD BY TWO COMPANIES INCOR PORAED IN THE BRITISH VIRGIN ISLANDS WHICH ARE UNDER THE CON TROL OF ONE MR. HUGH HAMILTON. THE EQUITY BASE OF UBSM IS USD 2 MILLI ON. THE EQUITY OF LNFOTEC INVESTED UBSM IS ONLY TO THE TUNE OF USD 400 000 AND AS PER THE BALANCE SHEET AVAILABLE UBSM RAISED RESOURCES / BORROWINGS OF USD 100.77 MILLION TO INVE ST IN SUBSIDIARIES INCLUDING CLARIDGES. DETAILS OF THE S OURCES OF BORROWINGS OR THE INVESTMENTS MADE ARE NOT KNOWN. T HERE IS NO EVIDENCE YET TO ESTABLISH THAT THE MONEY BROUGHT IN AS FDJ BY UBSM WAS SOURCED FROM THE APPELLANT OR ANY ENTITY UN DER HIS CONTROL. THERE CANNOT BE ANY PRESUMPTION AS TO FACT S. THEREFORE IN THE PRESENT FACTS OF THE CASE THE ADDITION OF IN VESTMENTS MADE BY UBSM INTO CJARIDGES HOTEL PVT. LTD. AS UNEXPLAINE D INVESTMENT OF THE APPELLANT CANNOT BE LEGALLY SUSTAINED. THE P RIMARY ONUS OF ESTABLISHING THE TRANSACTION STANDS DISCHARGED BY T HE APPELLANT AND IT IS LIP TO THE REVENUE TO USE THE MACHINERY A T ITS DISPOSAL TO GET AT THE TRUTH OF THE MATTER. ACCORDINGLY I DIRE CT THE AO TO I PURSUE THE REFERENCE MADE TO THE GOVT. OF MAURITIUS AND ALSO TO MAKE FRESH I REFERENCES IN THE MATTER TO THE GOVERN MENTS / ADMINISTRATIONS OF JERSEY AND BRITISH VIRGIN ISLAND S WITH WHICH INDIA NOW HAS TAX INFORMATION EXCHANGE AGREEMENTS TO ARRIVE AT THE REAL FACTS BY EXAMINING INTERCONNECTED TRANSACT IONS AND THE FLOW OF FUNDS AMONG VARIOUS ENTITIES INVOLVED. THE ADDITION MADE IS PRESENTLY DELETED. APPELLANT GETS RELIEF OF RS.3 96 87 500/-. J) REGARDING ADDITION MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF INVESTMENT MADE BY PALM TECHNOLOGIES INTO CLARIDGES SEZ. 7.5 I HAVE CONSIDERED THE ASSESSMENT ORDER AND REPO RTS OF THE REVENUE VARIOUS DOCUMENTS AND THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT. THE UNDISPUTED FACTS ARC THAT INV ESTMENT AS SHARE CAPITAL HAS BEEN BROUGHT INTO CLARIDGES SEZ BY PALM ITA NO2237 3718 3431&4641DEL/13 16 TECHNOLOGIES LIMITED (PTL) A COMPANY DULY REGISTER ED IN MAURITIUS. THE OWNERSHIP OF PTL IS KNOWN FROM THE RESPONSE RECEIVED FROM THE GOVT. OF MAURITIUS FROM THE EVID ENCE FILED BY THE APPELLANT AND FROM THE SEIZED DOCUMENTS ITSELF . THE APPELLANT IS NOT A SHAREHOLDER IN PTL WHICH IS OWN ED BY ONE MR. LA. HALTLLAND. THE APPELLANT IS HOWEVER 99% SHARE HOLDER / OWNER OF UNIVERSAL BUSINESS SOLUTIONS FZC (UBSS) AN E NTITY DULY INCORPORATED UNDER THE LAW IN SHARJAH. DIVIDEND DECL ARED BY USSS AND PAYABLE TO THE APPELLANT WAS INVESTED IN IN FOTEC SERVICES LTD. (ISL) CHANNEL ISLANDS AND MIDEAST CON SORTIUM SA (MCSA) BRITISH VIRGIN ISLANDS AT THE INSTRUCTION OF APPELLANT. APPELLANT HAS CONTROLLING INTEREST IN ISL. THE EQUIT Y BASE OF PTL IS USD 1001 ONLY. THE INVESTMENT OF PTL IN CLARIDGES SEZ IS SEEN TO BE EMANATING & FROM LOAN / BORROWINGS FROM UBSS OF USD 3 000 000 AND FROM Y2K SIL (ANOTHER COMPANY IN WHICH THE APPELLANT HOLDS INTEREST) OF USD 431.197. THUS UNLI KE IN THE CASE OR UBSM (IN PARA-6 ABOVE) IN THE PRESENT INSTANCE T HERE IS A BACKWARD LINK BETWEEN FUNDS TRANSFERRED FROM PTL TO CLARIDGES SEZ WHICH HAVE BEEN SOURCES FROM ENTITIES UNDER THE CONTROL OF THE APPELLANT (UBSS & ISL). HOWEVER THE MOOT QUESTIO N IS WHETHER MONEY SOURCED FROM UBSS AND ISI' EVEN THOUGH T HE APPELLANT HAS INTEREST / CONTROLLING INTEREST IN TH OSE COMPANIES CALL BE TREATED AS INCOME OF THE APPELLANT? I FIND THAT ON PRESENT FACTS IT CANNOT BE SO HELD UNLESS THERE IS EVIDENC E TO INDICATE THAT THE RESOURCES AND INCOMES OR THESE TWO ENTITIE S ARE NOTHING BUT INCOMES ACCRUED OR ARISING TO THE APPELLANT IN INDIA. IT IS UNDISPUTED HAVING BEEN MENTIONED IN THE ASSESSMENT ORDER THAT UBSS HAD SUBSTANTIAL RESOURCES AND INCOMES GENERATED THROUGH ITS ACTIVITIES AS REFLECTED IN ITS ACCOUNTS. THERE IS N O EVIDENCE YET TO ESTABLISH THAT MONEY BROUGHT INTO CLARIDGES SEZ AS F DI BY UBSS WAS DIRECTLY ATTRIBUTABLE TO THE PERSONAL INCOME / ASSETS OF APPELLANT. BUT AS MENTIONED EARLIER UNLIKE IN THE INSTANCE DISCUSSED IN THE PREVIOUS GROUND OF APPEAL IN THIS INSTANCE THE FUNDS DID FLOW FROM THE ENTITIES UNDER THE APPELLAN T'S CONTROL. YET IT CAN HE TAXED AS INCOME OF THE APPELLANT ONL Y IF THERE IS DIRECT LINK OF THE INVESTMENT TO THE ASSETS / INCOM E OF THE APPELLANT. THE HON'BIE ITAT HAD VIDE PARA-10 OF IT S ORDER DATED 24.07.2012 REMANDED THE MATTER BACK TO THE AO ON S IMILAR FACTS TO EXAMINE IF THE ADDITIONS CAN BE MADE AT ALL AND IN WHOSE HANDS THE ADDITIONS ARE TO- BE MADE. THEREFORE IN THE PRESENT FACTS OF THE MATTER ALTHOUGH IT CANNOT BE HELD THAT THE AMOUNT IS UNEXPLAINED MONEY / INVESTMENT OF THE APPELLANT TH E SOURCE OF MONEY EMANATING FROM ENTITIES UNDER THE CONTROL OF THE APPELLANT THE ADDITION OUGHT TO HE SUSTAINED ON A P ROTECTIVE BASIS TILL THE REAL FACTS ARE ASCERTAINED FOR WHICH NECES SARY REFERENCES ARE TO BE MADE OR PURSUED AS ALREADY DIRECTED. I HO LD ACCORDINGLY ITA NO2237 3718 3431&4641DEL/13 17 AND DIRECT THE AO TO PURSUE THE REFERENCE MADE TO T HE GOVT. OF MAURITIUS AND ALSO TO MAKE FRESH REFERENCES IN THE MATTER TO THE GOVERNMENTS/ADMINISTRATIONS OF JERSEY AND BRITISH V IRGIN ISLANDS WITH WHICH INDIA NOW HAS TAX INFORMATION EXCHANGE A GREEMENTS TO ARRIVE AT THE REAL FACTS BY EXAMINING INTERCONNE CTED TRANSACTIONS AND THE FLOW OF FUNDS AMONG VARIOUS EN TITIES INVOLVED. IN PARA-6.3 AND 6.4 ABOVE. I HAVE CONSIDE RED THE MATTER IN DETAIL. THIS DECISION IS IN CONSONANCE WITH THE DECISION OF HON'BIE ITAT AS ABOVE. THE ADDITION IS SUSTAINED O N PROTECTIVE BASIS AS UNEXPLAINED INVESTMENTS U/S 69 IN THE HAND S OF THE APPELLANT. K) REGARDING FOREIGN REMITTANCE. 8. THE SIXTH GROUND OF APPEAL IS AGAINST ADDITION O F ` .8 45 288/- BEING UNEXPLAINED RECEIPT OF GRP 10 000 IN APPELLAN T'S BANK ACCOUNT. I AM UNABLE TO FIND ANY EXPLANATION / JUST IFICATION WITH REGARD TO THIS GROUND OF APPEAL IN THE SUBMISSIONS MADE BEFORE ME. ACCORDINGLY THIS ADDITION MADE BY THE REVENUE IS CONFIRMED. L) REGARDING JEWELLERY FOUND IN POSSESSION OF HIS WIFE. I HAVE CONSIDERED THE ASSESSMENT ORDER THE SUBMISS IONS MADE AND APPEAL ORDER DATED 30.5.2011 IN THE CASE OF SMT. REN U NANDA IN APPEAL NO. 423/09-10 FOR A.Y. 2007-08. THE SAME ADDITION W AS UNDER CONSIDERATION IN THAT ORDER WHEREIN IT WAS HELD BY THE CIT(A) THAT THE JEWELLERY FOUND DURING SEARCH WAS LESS THAN THE JE WELLERY DISCLOSED IN VARIOUS WEALTH TAX RETURNS OF THE APPELLANT HIS WI FE SON AND DAUGHTER IN LAW. AS THE SAME JEWELLERIES WERE HELD TO BE EXP LAINED IN THE CASE OF APPELLANTS WIFE AND FOR GOOD REASONS I DO NOT FIN D ANY CAUSE NOT TO DELETE THE ADDITION OF THE SAME AMOUNT IN THE HANDS OF THE APPELLANT. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. APPEL LANT GETS RELIEF OF RS. .1 20 73 114/-. 5. AGGRIEVED WITH THE ORDERS OF LD CIT(A) BOTH ASS ESSEE AS WELL AS REVENUE ARE IN APPEAL BEFORE US. 6. AT THE OUTSET ARGUING ON THE COMMON GROUND IN B OTH YEARS REGARDING RESIDENTIAL STATUS THE LD AR SUBMITTED THAT ASSESS EE HAD BEEN ASSESSED FROM 1985 TO 2006 AS A NON RESIDENT HAVING NOT LIVED IN INDIA FOR MORE THAN 182 IN DAYS EACH YEAR. ASSESSEE NEVER HAD ANY BUSINESS OR SALARY INCOME IN INDIA BUT EARNED ONLY PASSIVE INCOME FROM OTHER SOURCES SUCH AS INTEREST CAPITAL GAINS ITA NO2237 3718 3431&4641DEL/13 18 DIVIDEND ETC. WHICH WERE OFFERED TO TAX BY FILING RE TURNS OF INCOME IN INDIA. IT IS CONTENDED THAT ASSESSEE HAD COME TO INDIA ON 28 .9.2006 TO CELEBRATE 91 ST BIRTHDAY OF HIS FATHER AND HE WAS SEARCHED BY CBI O N 10.10.2006 AND CONSEQUENT UPON SEARCH A FIR WAS REGISTERED AGAINST HIM AND HIS PASSPORT WAS IMPOUNDED. ON 2.1.2007 HE MADE AN APPLICATION TO HO N'BLE JUDGE CBI FOR RELEASE OF HIS PASSPORT ILLEGALLY IMPOUNDED AND VI DE ORDER DATED 15.1.2007 THE LD. JUDGE ORDERED FOR ITS RELEASE. THE CBI APPEALE D AGAINST THE ORDER FOR RELEASE OF THE PASSPORT AND HON'BLE DELHI HIGH COUR T VIDE ITS ORDER SET ASIDE THE ORDER OF THE LOWER COURT. THE ASSESSEE FILED SLP AGA INST THE SAID ORDER OF HON'BLE DELHI HIGH COURT AND HON'BLE SUPREME COURT VIDE ORDER DATED 24.1.2008 REVERSED THE ORDER OF HON'BLE DELHI HIGH COURT BY O BSERVING THAT THE RIGHT OF ASSESSEE TO TRAVEL OUT SIDE INDIA WAS A FUNDAMENTAL RIGHT AND INVESTIGATING AGENCY HAD NO POWER TO IMPOUND THE PASSPORT. IN VIE W OF THE ABOVE CIRCUMSTANCES STARTING FROM 10.10.2006 THE ASSESSEE WAS NOT PERMITTED TO GO ABROAD DUE TO ILLEGAL IMPOUNDING OF HIS PASSPORT A ND THEREFORE HE WAS COMPELLED TO STAY IN INDIA BY GOVERNMENT AND THERE BY HIS STAY EXCEEDED 182 DAYS IN THESE YEARS. THE ASSESSING OFFICER IGNORING THESE CRUCIAL FACTS HELD THE STATUS OF ASSESSEE AS A RESIDENT AND COMPUTED HIS WORLDWIDE INCOME AS TAXABLE IN INDIA. CONTINUING HIS ARGUMENTS THE LD AR SUBMITTED THAT THE PASSPORT WAS IMPOUNDED ALLEGEDLY FOR OFFENCES COMMITTED UNDER IPC BUT TI LL THE DATE OF RELEASE OF PASSPORT BY CBI I.E. 21.9.2011 N O CHARGE SHEET WAS FILED AGAINST THE ASSESSEE. BESIDES IT IS SUBMITTED THA T NONE OF THE ALLEGED OFFENCES RELATED TO INCOME TAX ACT. THE PASSPORT WAS IMPOUNDE D ON ACCOUNT OF UNFOUNDED AND WILD SUSPICION OF RECEIVING COMMISSIO N TO ASSESSEE IN BARAK MISSILES CASE. THESE UNFOUNDED ALLEGATIONS NO LONGE R EXIST BECAUSE THE CBI HAS ALREADY FILED A CLOSURE REPORT STATING LACK OF EVID ENCE TO PRESS ANY ALLEGED CHARGES IN FIR. IT IS SUBMITTED THAT ENTIRE BASIS FOR IMPOUNDING OF PASSPORT WAS ILLEGAL FROM BEGINNING TO END AND ASSESSEE WAS THU S FORCED TO STAY IN INDIA AGAINST HIS WILL FOR MORE THAN 182 DAYS IN THESE YE ARS DUE TO ILLEGAL ACTION OF CBI. IT WAS ARGUED THAT IN THESE CIRCUMSTANCES THE PERIOD OF FORCED STAY CANNOT BE USED FOR DETERMINATION OF ASSESSEES RESIDENTIAL STATUS UNDER INCOME TAX AS ITA NO2237 3718 3431&4641DEL/13 19 THE STAY IN INDIA WAS UNDER COMPULSION AND NOT VOL UNTARILY; IT WAS AGAINST HIS WISHES AND FOR REASONS BEYOND HIS CONTROL. 7. LD COUNSEL TO EXPLAIN HIS CASE CITED AN EXAMPLE T HAT SUPPOSE MR. BILL GATES WHO EARNS WORLD WIDE INCOME VISITS INDIA A ND DUE TO SOME VIOLATION OF LAW IS HELD IN INDIA AND HIS STAY EXCEEDS 182 DAYS AS HIS PASSPORT IS IMPOUNDED. HE CHALLENGES THE IMPOUNDING IN COURT OF LAW. THE ISSUE OF IMPOUNDING OF PASSPORT TAKE 2-3 YEARS TO BE DECIDED FINALLY BY SUPREME COURT DECLARING THE IMPOUNDING OF PASSPORT TO BE ILLEGAL. IN THESE CIRCUMSTANCES CAN THE FORCED STAY OF MR. GATES CAN BE HELD TO TREAT H IM AS RESIDENT AND ASSESS HIS WORLDWIDE INCOME IN INDIA. LD COUNSEL CONTENDS THAT THIS TYPE OF INTERPRETATION RESULTS IN UNINTENDED ARBITRARY AND ABSURD CONSEQU ENCES WHICH CANNOT BE THE INTENTION OF LEGISLATURE TO FORCIBLY MAKE NRIS AS R ESIDENT IN INDIA AND COLLECT TAX ON THEIR WORLD WIDE INCOME. IT IS PLEADED THAT DUE TO ARBITRARY MISINTERPRETATION OF THE PHRASE STAY IN INDIA THE INCOME TAX AUTHORITIES HAVE TREATED HIM AS RESIDENT IN INDIA AND TAXED HIS ENTI RE GLOBAL INCOME. 8. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AS A CONSEQUENCE OF BEING FORCED TO HELD AS RESIDENT IN INDIA BY AN ILLEGAL I MPOUNDING OF THE PASSPORTS THE ASSESSEE IS SUBJECTED TO VARIOUS HARDSHIPS INC LUDING FOLLOWING:- I) HE HAS BEEN SUBJECTED TO DOUBLE TAXATION OF INCOME. II) HIS BANK BALANCES ABROAD WHICH AS PER THE ORDER OF HON'BLE HIGH COURT WERE NOT SUBJECTED TO TAX SINCE HE WAS A NON RESIDEN T TILL ASSESSMENT YEAR 2006-07 NOW ARE BEING BROUGHT UNDER THE AMBIT OF TAX. III) THE DISCLOSURE NORMS WHICH DID NOT APPLY TO HI M I.E. BANK ACCOUNT DISCLOSURE PROPERTY DISCLOSURE ETC. WOULD BECOME A PPLICABLE TO HIM. IV) THE APPELLANT HAS BUSINESS INTEREST ABROAD AND HAS UNDERSTANDING AND RELATIONS WITH FOREIGNERS FOR A LONG PERIOD OF TIME ON WHICH INDIAN INCOME TAX AUTHORITIES HAVE HIS DOMAIN. THE DEPARTME NT IS COMPELLING HIM TO REVEAL THOSE RELATIONSHIPS AGREEMENTS UNDE RSTANDINGS ETC. WHICH THE DEPARTMENT CANNOT ENFORCE IN THE CASE OF NON RESIDENTS QUA THE INCOME WHICH DOES NOT RELATE TO INDIA. ITA NO2237 3718 3431&4641DEL/13 20 V) DETAILS ABOUT HIS LIVING STANDARD ABROAD TRANSA CTIONS AND DRAWINGS ETC. ARE BEING SOUGHT WHICH ARE NOT REQUIRED TO BE SCRUTINIZED. VI) THE DEPARTMENT IS ASKING TO REVEAL THE IDENTITY AND CAPACITIES OF FOREIGN BUSINESS PARTNERS BALANCE SHEETS OF THE CO MPANIES IN WHICH HE IS A DIRECTOR ETC. WHICH ARE CREATING COMPLICATION OF FOREIGN BUSINESS RELATED PROBLEMS. 9. ARGUING FURTHER THE LD AR SUBMITTED THAT THE CBI HAS ACCEPTED THAT THERE WAS NO SUFFICIENT EVIDENCE AND DROPPED THE FI R LODGED ON ALLEGED BARAK MISSILES ISSUE AND ACCEPTED THAT HE HAS NOT RECEIVE D ANY COMMISSION IN ALLEGED DEFENCE DEALS. THUS NO EVIDENCE EXIST WHICH IN ANY WAY INDICATES THIS OFFENCE AND THE PASSPORT WAS ILLEGALLY IMPOUNDED ON SUSPIC ION. THE LD AR SUBMITTED THAT TRIBUNAL VIDE ORDER DATED 24.7.2012 FOR ASSESS MENT YEAR 2001-02 2002-03 & 2004-05 HAS HELD THE STATUS OF ASSESSEE AS NON R ESIDENT ON THE BASIS OF NUMBER OF DAYS STAY IN INDIA ON A TOTALLY DIFFERENT ISSUE AND FACTS. IN THIS RESPECT OUR ATTENTION WAS INVITED TO PAPER BOOK PAG ES 857 TO 905. 10. THE LD DR INTERRUPTED AT THIS JUNCTURE AND INV ITED OUR ATTENTION TO THE TRIBUNAL ORDER CITED BY LD AR AND SUBMITTED THAT TH E TRIBUNAL HAS HELD THE ASSESSEE AS NON RESIDENT ON THE BASIS OF NUMBER OF DAYS OF HIS STAY IN INDIA. THEREFORE THIS TRIBUNAL JUDGMENT IS AGAINST THE ASS ESSEE BY DRAWING OUR ATTENTION TO RELEVANT PAPER BOOK PAGES WHERE THE RE LEVANT PROVISIONS ARE REPRODUCED. 11. THE LD AR RESUMING THE ARGUMENTS CONTENDS THAT IN THOSE YEARS THE ISSUE OF STAY IS ON ALTOGETHER DIFFERENT FOOTING IN EARL IER YEARS THE PERTINENT ISSUE WAS AS TO WHETHER THE PROVISIONS OF SECTION 6(1)(C) WERE APPLICABLE OR PROVISIONS OF SECTION 6(1)(C) ALONG WITH EXPLANATIO N (B) TO THE ASSESSEES CASE. HIGHLIGHTING THE DIFFERENCE BETWEEN SECTION 6(1)(C) AS READ INDIVIDUALLY AND AS READ WITH EXPLANATION (B) IT WAS SUBMITTED THAT PERI OD OF STAY ORDINARILY IS SIXTY DAYS IN THE CASE OF ALL INDIVIDUALS WHEREAS IN THE CASE OF CITIZENS OF INDIA OR FOR A PERSON OF INDIAN ORIGIN WHO WERE NON RESIDENTS T HE PERIOD IS 182 DAYS. IT WAS SUBMITTED THAT IN THOSE YEARS THE TRIBUNAL HAS HELD THAT EXPLANATION (B) WAS APPLICABLE IN THE CASE OF ASSESSEE AND INSTEAD OF 6 0 DAYS OF STAY 182 DAYS WERE ITA NO2237 3718 3431&4641DEL/13 21 RELEVANT IN THOSE YEARS. WHEREAS IN THE PRESENT YEA RS THIS IS NOT THE ISSUE AT ALL THE REAL ISSUE IN THESE YEARS IS DETERMINING THE NR I STATUS IN THE BACKDROP OF ILLEGAL RESTRAINT ON ASSESSEES TRAVEL OUT OF INDIA AND CONSEQUENT FORCED OVER STAY IN INDIA BEYOND 182 DAYS. THE QUESTION HERE IS AS TO WHETHER UNDER THESE CIRCUMSTANCES THE ASSESSEE BY IMPOUNDING OF PASSPO RT AND RESTRAINED IN INDIA AGAINST WILL CAN HE BE FORCED TO PAY TAXES ON HIS G LOBAL INCOME OR NOT. CONTINUING HIS ARGUMENTS THE LD AR SUBMITTED THAT A S SOON AS THE PASSPORT OF ASSESSEE WAS RELEASED AFTER A LONG DRAWN LEGAL BATT LE HE IMMEDIATELY PROCEEDED OUT OF INDIA. IN SUPPORT OF HIS ARGUMENTS FOR ADOPTING A LIBERAL INTERPRETATION OF PROVISIONS IN THESE PECULIAR CIR CUMSTANCES IT IS PLEADED THAT THE ASSESSEE CANNOT BE SAID TO BE A RESIDENT FOR TH E PURPOSE OF IMPOSITION OF TAX ON WORLD WIDE INCOME. IN SUPPORT THEREOF LD AR RELIED UPON A NUMBER OF CASE LAWS WITH THE FOLLOWING PROPOSITIONS:- 1. CIT V. ABDUL RAZAK 337 ITR 267 (KER.) WITH THE PROP OSITION THAT IF A PERSON GOES OUT FOR TREATMENT OR STUDY OR TRAVEL AB ROAD HE WILL BE A RESIDENT OF INDIA EVEN IF HE IS OUTSIDE INDIA FOR M ORE THAN 182 DAYS IN A YEAR. THE LD AR HIGHLIGHTING THE FACTS OF THIS CAS E ARGUED THAT WITH THE REVERSE ANALOGY IF A PERSON IS FORCED TO STAY IN IN DIA FOR MORE THAN 182 DAYS HE CANNOT BE CONSIDERED TO HAVE BECOME A RESI DENT FOR THE PURPOSE OF TAXATION. 2. VIPIN KUMAR V. UNION OF INDIA IN CIVIL WRIT PETITIO N NO.386 OF 206. IN A CASE OF IMPOUNDING OF PASSPORT BY FERA AUTHORITIES UNDER ALLEGED VIOLATIONS OF FOREIGN EXCHANGE MANAGEMENT ACT FOR SH ORT (FEMA) IN NEARLY SIMILLAR CIRCUMSTANCES. THOUGH HON'BLE SUPREME COU RT PERMITTED THE RETENTION OF PASSPORT BUT IT WAS ON THE EXPLICIT UND ERTAKING GIVEN BY ADDITIONAL SOLICITOR GENERAL TO THE EFFECT THAT IF T HERE WAS ANY PROBLEM ABOUT THE NRI STATUS OF THE PETITIONER AS APPREHEND ED THE GOVT. OF INDIA WOULD EXTEND FULL COOPERATION TO HELP THE PETITIONER IN THAT RESPECT. THUS EVEN GOVT. HAS NOT TAKEN THE DAYS OF STAY IN I NDIA AS AN ABSOLUTE RULE. HAD IT BEEN SO LD ASG WOULD NOT HAVE GIVEN A C ONCESSION FOR ESTOPPELS AGAINST LAW AND HONBLE SUPREME COURT MAY NOT HAVE ACCEPTED ITA NO2237 3718 3431&4641DEL/13 22 SUCH CONCESSION UNLESS IT WAS WITHIN THE FOUR CORNE RS OF LAW. THUS THE STAY AS ENVISAGED IN THE INCOME TAX ACT BY A HARMONI OUS INTERPRETATION AND APPLYING THE CONCEPT OF READING DOWN OF LEGAL P ROVISIONS MEANS STAY WITHOUT FORCE. 3. CIT V. J.H. GOTLA 156 ITR 323 (SC) FOR THE PROPOSITI ON THAT IF RESULT OF PLAIN READING OF A SECTION OF AN ACT IS ABSURD AND NOT BE INTENDED THEN CONSTRUCTION THAT RESULTS IN EQUITY RATHER THAN INJ USTICE IS TO BE PREFERRED. IN ASSESSEES CASE THIS INTERPRETATION I S LEADING TO A TOTALLY ABSURD AND UNINTENDED RESULT. 4. K.P. VERGHESE V. ITO & ANOTHERS 131 ITR 597 (SC) WIT H THE PROPOSITION THAT IF THE LITERAL CONSTRUCTION LEADS TO MANIFESTL Y AND UNREASONABLE AND ABSURD CONSEQUENCES THEN THOUGH THE SUGGESTED CONST RUCTION CANNOT ALTER THE MEANING OF STATUTORY PROVISION BUT IT CAN CERTAINLY HELP TO FIX ITS MEANING. IN THIS RESPECT IT WAS ALSO SUBMITTED THAT IT IS A WELL RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PROVISION MUS T BE SO CONSTRUED SO THAT ABSURDLY AND MISCHIEF IS BEST AVOIDED. 5. C.W.S. (INDIA) LTD. ETC. V. CIT 208 ITR 649 (SC) FOR THE PROPOSITION THAT IF LITERAL APPROACH LEADS TO RESULTS ABSURD WHICH ARE UN-INTENDED RESULTS DISCRIMINATORY AND INCONGRUOUS A CONSTRUCTION WHI CH MODIFIES THE MEANING OF THE WORD OR EVEN THE STRUCTURE OF THE SE NTENCE MAY BE PUT BY THE COURTS. 6. MYSORE MINERALS LTD. V. CIT 239 ITR 775 (SC) FOR THE PROPOSITION THAT MEANING OF A WILL IS TO BE GATHERED FROM THE CONNEC TION IN WHICH IT IS USED AND THE SUBJECT MATTER TO WHICH IT APPLIES. 7. BIRLA CEMENT WORKS V. CBDT 248 ITR 216 (SC) FOR THE PROPOSITION THAT IN CASE OF ABSURD AND INTERPRETATION THAT FAVOURS THE ASSESSEE SHOULD BE ADOPTED BY TAKING REALISTIC MEANING. 12. LD AR IN SUPPORT OF HIS PLEA FOR LIBERAL INTERP RETATION ADVERTED TO DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE AND ARGUED THAT LAW DOES NOT EXPECT A PERSON TO DO THE IMPOSSIBLE. IF PASSPORT IS ILLEGAL LY IMPOUNDED AGAINST THE CONSTITUTIONAL RIGHTS OF THE ASSESSEE AND THEY ARE CHALLENGED IN THE COURT OF ITA NO2237 3718 3431&4641DEL/13 23 LAW IT IS IMPOSSIBLE TO PERFORM THE OBLIGATIONS OF NRI STATUS UNDER INCOME TAX ACT. THUS ASSESSES DISPOSITION IN ENSURING THE STAY OF PRESCRIBED DAYS IN INDIA IS IMPEDED BY AN ACT OF IMPOSSIBILITY ATTRIBUTABLE TO WRONGFUL ACTION OF GOVT. WITHOUT AVAILABILITY OF PASSPORT ASSESSEE CANNOT BE ASSUMED TO LEAVE INDIA. THUS THE ELIGIBILITY TO A PROVISION IS RENDERED IMP OSSIBLE FOR COMPLIANCE BY THE ILLEGAL ACTION OF NONE OTHER THAN THE GOVT. LD AR R ELIED UPON THE FOLLOWING CASE LAWS FOR THE PROPOSITION THAT A PERSON CANNOT BE EXP ECTED TO PERFORM IMPOSSIBLE ACTS BASED ON THE RECOGNIZED DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE: 1. CHANDRA KISHORE JHA V. MAHAVEER PRASAD & OTHERS (1 999) 8 SCC 266. 2. MOHD. GAZI V. STATE OF MADHYA PRADESH (2000) 4 SCC 34 2. 3. GUJRAT ASSEMBLY ELECTION (2002) 8 SCC 237. 4. CR REDDY LAW COLLEGE EMPLOYEE V. BAR COUNCIL OF IND IA (2004) 5 ALD 180. 5. STATE OF RAJASTHAN V. SHAMSHER SINGH (1985) AIR 1082 . 6. SMT. TEJASVANI PANIGRAHI V. STATE OF ORISSA IN W.P. N O.571 OF 2011 DATED 13.9.2013 7. KRISHNASWAMY S. PD. V. UOI (2006) 281 ITR 305. 8. ACIT V. RAMACHANDRA EDUCATIONAL & HEALTH TRUST (201 0) 128 TTJ (CHENNAI) 408. 9. NATIONAL AVIATION CO. OF INDIA V. DCIT (2011) 137 T TJ (MUM.) 662. 10. ACIT V. JINDAL IRRIGATION SYSTEMS LTD. (1996) 56 ITD (HYD.) 164. 11. CANARA BANK V. ITO 125 TTJ 819. 12. SOUTH EASTERN COALFIELDS LTD. V. JCIT (2003) 85 ITD 608 (NAG.). 13. STANDARD CHARTERED BANK V. DIRECTORATE OF ENFORCEMEN T (2005) 275 ITR 81 (SC). ITA NO2237 3718 3431&4641DEL/13 24 13. FURTHER RELIANCE IS PLACED ON THE DOCTRINE OF FORCE MAJEURE WHICH REFERS TO EVENTS BEYOND THE CONTROL OF PARTIES INHABITING TH EM TO FULFILL THEIR DUTIES AND OBLIGATIONS UNDER THE AGREEMENT. IN THIS RESPECT CO UNSEL RELIED UPON THE CASE LAW OF GLOBAL STEEL PHILIPPINES V. STC OF INDIA DECIDED BY THE HON'BLE HIGH COURT IN I.T.A. NO.4615 & 5316/2009 AND THE DECISION OF HON'BLE APE X COURT IN THE CASE OF STATE OF TAMILNADU V. NK KANDASWAMY 26 SCC 191 WITH THE PROP OSITION THAT IN INTERPRETING THE PROVISION WHERE A CONSTRUCTION WHICH WOULD DEFEAT I TS PURPOSE AND OBLITERATE IT FROM THE STATUTE BOOK SHOULD BE EXCLUDED. 14. THE LD AR ALSO RELIED UPON RULE OF BENEFICIAL I NTERPRETATION OF LEGAL PROVISIONS AS AN AID OF CONSTRUCTION IN CASE OF DOUBT AND UNIN TENDED CONSEQUENCES. THIS RULE PROPOUNDS THAT IN CASE OF VARYING RESULTS FLOWING FROM STATUTORY INTERPRETATION BENEFIT OF DOUBT IN A TAXING STATUTE SHOULD ALWAYS B E GIVEN TO THE TAX PAYER. 15. THE LD AR INVITED OUR ATTENTION TO THE LEGAL O PINIONS SOUGHT BY THE ASSESSEE FROM OF JUSTICE VN KHARE FORMER CHIEF JUSTICE OF I NDIA AND SHRI S.R WADHWA AN EMINENT INCOME TAX CONSULTANT. AFTER INDEPENDENT EXAM INATION OF THE ASSESSEES CASE THEY HAVE OPINED THAT IN THESE FACTS AND CIRCUMSTAN CES HE CANNOT BE HELD TO BE A RESIDENT IN INDIA FOR INCOME TAX PURPOSES. 16. ARGUING ON COMMON GROUND NO.3 THE LD AR SUBMIT TED THAT THOUGH LD CIT(A) GRANTED RELIEF TO THE ASSESSEE BUT WENT BEYOND HI S JURISDICTION BY DIRECTING THE ASSESSING OFFICER TO MAKE FURTHER INVESTIGATIONS FR OM GOVT. OF MAURITIUS JERSEY AND BRITISH VIRGIN ISLANDS. THE LD AR CONTENDS THAT CIT (A) HAS COTERMINOUS POWERS OF ENQUIRY WHICH OUGHT TO HAVE BEEN EXCERCISED. THE DIR ECTIONS SUFFER FROM LEGAL INFIRMITY IN AS MUCH AS BY AMENDMENT OF FA 2001 WE F 1-6-2001 CIT(A) HAS BEEN DIVESTED FROM THE POWER OF SET ASIDE OF ANY ISSUE OF ASSESSMENT TO THE ASSESSING OFFICER. IN THE ABSENCE OF STATUTORY POWER LD CIT(A ) CAN NEITHER SET ASIDE THE MATTER NOR ASK FOR FURTHER ENQUIRIES MORE SO WHEN HE HAS T AKEN A JUDICIOUS DECISION TO ALLOW THE RELIEF. THUS DIRECTION GIVEN BY LD. CIT(A) ARE URGED TO BE EXPUNGED. 17. VIDE GROUND NO.4 THE ASSESSEE IS AGGRIEVED WITH SUSTAINING OF ADDITION ON PROTECTIVE BASIS IN RESPECT OF SHARE CAPITAL SUBSCR IBED BY PALM TECHNOLOGIES MAURITIUS IN THE CLARIDGES SEZ (P) LTD. IT IS ARGUED THAT LD CIT (A) WHILE DECIDING THE GROUND HELD IN FAVOR OF THE ASSESSEE THAT THE AMOUNT OF SH ARE CAPITAL BELONGED TO PALM TECHNOLOGIES SINGAPORE AND NOT THE ASSESSEE. LD CI T (A) AS AN APPELLATE AUTHORITY THUS DECIDED THE ISSUE OF INVESTMENT IN SUBSTANTIVE TERMS AS BELONGING TO PALM ITA NO2237 3718 3431&4641DEL/13 25 TECHNOLOGIES THEREAFTER THERE IS NO JUSTIFICATION IN SUSTAINING THE SAME ADDITION AGAIN ON PROTECTIVE BASIS AND GIVING DIRECTIONS TO ASSESSING OFFICER TO CONDUCT FRESH INVESTIGATIONS FROM GOVT. OF MAURITIUS JERSEY & BRI TISH VIRGIN ISLANDS. THIS OUGHT TO HAVE BEEN DONE BY AO IN ORIGINAL PROCEEDINGS OR BY LD. CIT(A) USING HIS OWN POWERS OF INQUIRY OR BY CALLING A REMAND REPORT FROM AO AND T HEN DECIDING BY HIMSELF. THUS LD. CIT(A) THOUGH HAS GIVEN RELIEF ON ONE HAND BUT UNJU STIFIABLY CONTRADICTED HIS FINDINGS. AN APPELLATE AUTHORITY IS UNDER OBLIGATION TO DECID E THE ISSUE OF TAXABILITY IN CORRECT ASSESSEE WHICH IS ALREADY HELD TO BE BELONGING TO PALM TECHNOLOGIES AND NOT THE ASSESSEE. 18. WITH REGARD TO GROUNDS NO.5 TO 8 FOR ASSESSMENT YEAR 2007-08 AND GROUND IN ASSESSMENT YEAR 2008-09 THE LD AR SUBMITTED THAT IF ASSESSEE FAILS ON THE MAIN GROUND OF APPEAL REGARDING RESIDENTIAL STATUS THEN THESE ISSUES CAN BE SET ASIDE BY ITAT TO THE ASSESSING OFFICER FOR FURTHER VERIFICATION AND IN CASE THE GROUND OF RESIDENTIAL STATUS IS DECIDED IN FAVOUR THAN ALL OTHER GROUNDS OF APPEAL BECOME IN FRUCTUOUS AS THE ADDITIONS WERE MADE HOLDING THE ASSESSEE TO BE A RE SIDENT IN INDIA. WITHOUT PREJUDICE TO OTHER ARGUMENTS IT WAS ARGUED THAT LD CIT(A) EVE N OTHERWISE DELETED THE ADDITIONS BY HOLDING THAT THE MONEYS DID NOT BELONG TO ASSESS EE. 19. THE LD AR ALSO ARGUED THAT AS A LEGAL COURSE OF APPEAL PROCEEDINGS ONCE LD CIT(A) HELD THAT INCOMES DID NOT BELONG TO ASSESSEE THERE IS NO JUSTIFICATION TO RETAIN ADDITIONS ON PROTECTIVE BASIS AS IT AMOUNTS TO SELF CONTRADICTORY FINDINGS. IT IS CONTENDED THAT ASSESSEE HAS BEEN PUT TO UNDUE HARAS SMENT BY THE INCOME TAX DEPARTMENT IN PROCEEDING AGAINST HIM IN A VINDICTIV E AND ARBITRARY MANNER CAUSING SEVERE HARDSHIPS AND SUFFERINGS. IN THIS SI TUATION SUITABLE COST MAY BE AWARDED AGAINST DEPARTMENT BY ITAT BY USING ITS POW ERS IN THIS BEHALF. 20. THE LD DR ON THE OTHER HAND IN REPLY TO ASSES SES CONTENTIONS ON GROUND NO.2 SUBMITTED THAT LD CIT(A) WHILE DECIDING THE AP PEALS HAS CONSIDERED ALL THESE ARGUMENTS AND CONTENTIONS AND DEALT WITH THEM IN DETAILS. ITAT IN ASSESSEES OWN CASE HAS WHILE INTERPRETING SEC 6(1) (C) HELD THAT FOR DECIDING THE RESIDENTIAL STATUS WHAT IS TO BE SEEN IS PHYSI CAL PRESENCE IN INDIA. THIS DECISION HAS BEEN CONFIRMED BY HONBLE DELHI HIGH C OURT THUS THE ISSUE STANDS COVERED AGAINST HIM. APPLYING THIS DECISIVE PARAMET ER IT IS UNDISPUTED THAT ASSESSES PHYSICALLY STAYED IN INDIA EXCEEDING THE N O OF PRESCRIBED DAYS. ITA NO2237 3718 3431&4641DEL/13 26 FOLLOWING ITAT JUDGMENT AND APPLYING LITERAL MEANIN G I.E. STRICT INTERPRETATION TO PROVISION OF THE I T ACT LD. CIT(A) HAS RIGHTLY HELD THE ASSESSEE TO BE A RESIDENT IN INDIA. IT IS FURTHER ARGUED THAT ASSESS EES CONTENTIONS ARE REMINISCENT OF PROVISIONS CONTAINED IN 1922 IT ACT WHEN CASUAL VISIT CONCEPT WAS THERE PERHAPS UNDER THOSE PROVISIONS THE LD AR S ARGUMENT WOULD HAVE BEEN VALID TO SOME EXTENT. LD DR SUBMITTED THAT WHIL E ENACTING 1961 IT ACT LEGISLATURE CONSCIOUSLY DELETED THOSE WORDS AS CONT AINED IN 1922 IT ACT. THUS IT CANNOT BE SAID THAT INTENTION OF LEGISLATURE IS NOT THERE. 21. AS REGARDS ARGUMENTS REGARDING PRINCIPLE OF PER FORMANCE OF IMPOSSIBILITY THE LD DR SUBMITTED THAT THEY APPLY TO CONTRACTUAL PROVISIONS AND DO NOT APPLY TO IT PROCEEDINGS. BESIDES IT IS FURTHER SUBMITTED THAT ASSESSEE WAS MAINTAINING A HOUSE IN INDIA AND UAE THUS PRACTICALLY HE WAS OP ERATING FROM INDIA. HIS PASSPORT WAS IMPOUNDED BY A DUE PROCESS OF LAW AND LOOKING AT THE ENTIRETY OF FACTS CIRCUMSTANCES AND PROPER INTERPRETATION OF L EGAL PROVISIONS ASSESSEE HAS BEEN RIGHTLY HELD TO BE A RESIDENT IN INDIA FOR TAX ATION PURPOSES. BESIDES THE ISSUE ABOUT DETERMINATION OF RESIDENTIAL STATUS BEI NG BASED ON PHYSICAL PRESENCE IN INDIA FOR A PERIOD OF MORE THAN 180 DAY S IS COVERED AGAINST ASSESSEE BY I.T. JUDGMENT IN HIS OWN CASE (SUPRA). LD CIT(A) ORDER IN THIS BEHALF IS RELIED ON. 22. THE LD DR ARGUING ON REVENUES APPEAL SUBMITTED THAT LD CIT(A) HAS WRONGLY DELETED THE ADDITIONS AND FURTHER RELIED UP ON THE ASSESSMENT ORDER. THE LD AR ON THE OTHER HAND WITH REGARD TO REVENUE S APPEAL RELIED UPON THE LD CIT(A)S ORDER. 23. THE REQUEST OF LD DR FOR FILING OF WRITTEN SUBM ISSIONS WAS ACCEDED BY BENCH WHICH ARE FILED ON 5.3.2014. AFTER REITERATIN G FACTS & DISCUSSION REGARDING SEARCH BY CBI IMPOUNDING OF PASSPORT ETC . LD DRS SUBMISSIONS ARE MAINLY AS UNDER:- ITA NO2237 3718 3431&4641DEL/13 27 (I) THAT THE ASSESSING OFFICER HAS GONE STRICTLY BY THE MEANING OF BARE PROVISIONS OF LAW AS PER WHICH THE ASSESSEE HA D TO BE TREATED AS A RESIDENT IN INDIA. IT IS SUBMITTED THAT HAVING STAY ED FOR MORE THAN 180 DAYS IN THESE YEARS THE LD AR FAILS TO APPRECIATE THE FUNDAMENTAL PRINCIPLE OF INTERPRETATION WHEREBY A TAXING STATUE IS TO BE STRICTLY CONSTRUED AND IS VERY CLEAR THAT RELY UPON THE CASE LAW OF COMMISSIONER CUSTOMS V. TOP TEN PROMOTIONS (1969) 3 ALL ER 39HL PAGE 90. IT IS ARGUED THAT DEDUCING MEANING OF A TAXING ACT ONE HAS TO LOO K MERELY AT WHAT IS CLEARLY SAID. FURTHER RELIANCE IS PLACED UPON THE C ASE LAW OF CWT V. MODI SUGAR MILLS AIR 1961 (SC) 1047 WHEREIN IT WAS HELD TH AT WHILE INTERPRETING A TAXING STATUTE EQUITY OR EQUITABLE CO NSIDERATION ARE ENTIRELY OUT OF CONSIDERATION AND THEREFORE TAXING STATUTE CANNOT BE INTERPRETED ON ANY PRESUMPTION OR ASSUMPTION AND CO URTS INCLUDING ITAT CANNOT LOOK BEYOND THE WORDS OF STATUTE. 24. REPLYING TO ASSESSEES ARGUMENTS REGARDING PRIN CIPLE OF PERFORMANCE OF IMPOSSIBILITY THE LD DR SUBMITTED THAT THIS PRINCI PLE IS NOT APPLICABLE BECAUSE LAW DOES NOT FORCE THAT ONE PERSON SHOULD RESIDE AT A PARTICULAR PLACE. DURING THE COURSE OF STAY HOW ASSESSEE CAN SAY THAT HAD PA SSPORT BEEN NOT IMPOUNDED HE WOULD HAVE NECESSARILY GONE ABROAD AND FOR A SPE CIFIED NUMBER OF DAYS IN AN YEAR. THEREFORE DESPITE CLEAR LAW TASKING BENEFIT OF IMPOUNDING OF PASSPORT BY CBI CANNOT COME TO ASSESSEES ADVANTAGE AND NEE DS TO BE REJECTED. 25. APROPOS LD ARS RELIANCE ON THE EXPERT OPINIONS THE LD DR SUBMITTED THAT THESE OPINIONS HAVE TRAVELED BEYOND THE BARE A ND UNAMBIGUOUS PROVISIONS OF SECTION 6(1)(A) AND MOREOVER THESE OPINIONS HAVE MEANING OF NO EVIDENTIARY OR PRECEDENTIAL VALUE. 26. APROPOS OF LD ARS RELIANCE ON THE SUPREME COURT JUDGMENT DATED 24.1.2008 IN ASSESSEES CASE WHEREBY THE PASSPORT O F THE ASSESSEE WAS ORDERED TO BE RELEASED LD DR SUBMITTED THAT THE ORDER DOES NOT HOLD THAT ALL ACTIONS ITA NO2237 3718 3431&4641DEL/13 28 TAKEN IN PURSUANCE OF IMPOUNDING OF PASSPORT WOULD BECOME NULLITY. ON THE ASPECTS OF ORDERS FOR RELEASE OF PASSPORT AND CLOSU RE REPORT IN BARAK MISSILE CASE LD DR SUBMITTED THAT IN ANY CASE STILL THE F ACT REMAINS THAT ASSESSEE HAD STAYED IN INDIA FOR A PERIOD WHICH IS MORE THAN PR ESCRIBED BY THE RELEVANT PROVISIONS OF INCOME TAX ACT FOR CLAIMING NRI STATUS . SINCE MANY CASES WERE ONGOING AGAINST THE ASSESSEE HE MAY HAVE STAYED I N INDIA FOR DEFENDING THE CASES EVEN IF HIS PASSPORT WAS NOT IMPOUNDED. THERE FORE IT WAS ARGUED THAT PLEA ABOUT THE FORCED PRESENCE IN INDIA HAS NO REL EVANCE TO DETERMINE HIS RESIDENTIAL STATUS. 27. APROPOS THE OTHER ISSUES I.E. DIRECTION OF LD C IT(A) POST SUBSTANTIVE RELIEF FOR FURTHER ENQUIRIES THE LD DR SUBMITTED THAT LD CIT(A) IN EFFECT INTENDED TO SET ASIDE THE ISSUE. HOWEVER FINDING T HAT HE HAS NO POWER TO SET ASIDE MIDDLE COURSE WAS ADOPTED TO ORDER FURTHER E NQUIRIES. THE DIRECTIONS OF LD CIT(A) TO INVESTIGATION ARE JUST AIMED TO ASCER TAIN CORRECT FACT/TRUTH WHICH CANNOT BE AGITATED BY THE ASSESSEE. IN ANY CASE IF ANY ACTION ON THE BASIS OF FURTHER INVESTIGATION IS REQUIRED TO BE TAKEN IT WI LL ONLY BE POSSIBLE WHEN THERE WOULD BE TANGIBLE MATERIAL AND THE LIMITATION WOULD STILL BE AVAILABLE WITH ASSESSING OFFICER. THEREFORE IT WAS ARGUED THAT AS SESSEES GRIEVANCE AGAINST THE ABOVE DIRECTIONS IS UNFOUNDED AND NEEDS TO BE D ISMISSED. 28. ARGUING UPON THE REVENUES APPEAL IN RESPECT OF DELETION OF ADDITION ON JEWELLERY AMOUNTING TO RS. 1.20 CRORES LD DR SUBMI TTED THAT LD CIT(A) HAS COMMITTED A SERIOUS ERROR IN NOT APPRECIATING THAT MRS. RENU NANDA EX WIFE OF ASSESSEE DID NOT HAVE ANY INDEPENDENT SOURCE AND TH E ONLY LOGICAL INFERENCE CQAN BE TO THE EFFECT OF HOLDING THAT THE INVESTMEN T MADE WAS FROM ASSESSEES SOURCES ONLY. IT WAS SUBMITTED THAT LD CIT(A) FAILE D TO APPRECIATE THAT EVEN OTHERWISE ALSO THE ADDITION WAS REQUIRED TO BE DELE TED FROM MRS. RENU NANDA HANDS AS THE JEWELLERY FOUND WAS HELD TO HAVE BEEN ACQUIRED OUT OF INCOME OF ASSESSEE ONLY. THEREFORE DELETION IN THE HANDS OF ASSESSEES WIFE WAS INCONSEQUENTIAL BECAUSE THE LD CIT(A) WAS REQUIRED TO DECIDE THE ISSUE ON ITA NO2237 3718 3431&4641DEL/13 29 STAND ON ALONE BASIS. IN VIEW OF THE ABOVE IT WAS PRAYED THAT ASSESSING OFFICERS ORDER IN THIS RESPECT BE RESTORED MORE SO WHEN THE ASSESSEE HAS SPECIALLY NOT DISPUTED THE FINDING OF ASSESSING OFF ICER THAT IT WAS THE ASSESSEE WHO HAD INVESTED HIS OWN INCOME IN JEWELLERY. 29. REGARDING DELETION OF ADDITION OF RS.17.94 CROR ES ON ACCOUNT OF INVESTMENT IN CLARIDGES HOTEL PVT. LTD. THE LD DR RELIED ON VARIOUS DOCUMENTS REFERRED TO IN ASSESSMENT ORDER AND ARGUED THAT UBB S HAD NO INCOME OF ITS OWN AND EFFECTIVELY THIS COMPANY WAS USED AS CONDUIT PI PE TO CHANNELIZE UNACCOUNTED INCOME OF MR. NANDA BECAUSE OF THE LESS STRINGENT EXCHANGE NORMS THERE. IT WAS ARGUED THAT ASSESSING OFFICER H AD HIGHLIGHTED VARIOUS ISSUES OF INVESTMENT INTO CLARIDGES HOTEL PVT. LTD. AND LD CIT(A) HAS DELETED THE ADDITION SUMMARILY RELYING UPON THE ASSESSEES SUB MISSION WHICH EMERGES FROM SHORT FINDINGS RUNNING INTO JUST ONE PAGE. LD DR SU BMITTED THAT LD CIT(A) HAS FAILED TO APPRECIATE THE COMBINED EFFECT OF THE SEI ZED MATERIAL RELIED ON IN THE ASSESSMENT ORDER WHICH CLEARLY DEMONSTRATED THAT AS SESSEE WAS INTRODUCING HIS OWN UNACCOUNTED INCOME THROUGH VARIOUS INTERMEDIARI ES. THE FACT THAT LD CIT(A) GAVE DIRECTIONS TO ASSESSING OFFICER TO MAKE FURTHER INVESTIGATION ITSELF PROVE THAT CIT(A) WAS NOT CLEAR ABOUT THE RELIEF. C IT(A) SHOULD HAVE CALLED FOR SUCH ENQUIRIES AND THEN SHOULD HAVE DEALT WITH THE ADDITION BASED UPON SUCH FURTHER INVESTIGATION. THUS THE RELIEF ACCORDED IS NOT PROPER AND DESERVES TO BE REVERSED. 30. REGARDING ADDITION OF RS. 16.98 CRORES ON PROTE CTIVE BASIS THE LD DR SUBMITTED THAT THIS AMOUNT WAS BROUGHT INTO CLARIDG EDS SEZ BY PALM TECHNOLOGIES LTD. (PTL) AND PALM HOLDINGS/TECHNOLOG IES LTD. THEY MADE THESE INVESTMENTS BY BORROWINGS COMING FROM TWO OTHER ENT ITIES CONTROLLED BY MR. NANDA. THE TRANSACTIONS ARE CLOSELY LINKED WITH ASS ESSEE WHICH IS DEMONSTRATED BY AO. REFERRING TO DOCUMENTS SEIZED DURING THE COU RSE OF SEARCH INDICATING THAT ASSESSEES OWN MONEY GOT ROUTED TO PTL I.E. IN DIAN COMPANY. IT WAS ARGUED THAT DESPITE FINDING DIRECT LINK THROUGH BAC KWARD WORKING THE LD CIT (A) HELD THAT THERE WAS NO EVIDENCE TO ESTABLISH TH AT MONEY BROUGHT INTO ITA NO2237 3718 3431&4641DEL/13 30 CLARIDGES SEZ AS FDI BY UBBS WAS ATTRIBUTABLE TO PERS ONAL INCOME OF THE APPELLANT. THE LD DR FURTHER STATED THAT THE APPEAL ORDER REFLECTS THAT LOOKING AT THE OVERLAPPING FACTS LD. CIT(A) DIRECTED THE AS SESSING OFFICER TO MAKE FURTHER INVESTIGATION AND RETAINED THE ADDITION ON PROTECTIVE BASIS. IN RIGHT EARNEST LD. CIT(A) SHOULD HAVE WAITED FOR THE OUT COME OF SUCH INFORMATION AND THEN DECIDED THE ISSUES. IN THESE CIRCUMSTANCES THE ADDITIONS OUGHT TO HAVE BEEN CONFIRMED. 31. ASSAILING THE DELETION OF ADDITION OF RS. 7.28 LAKHS THE LD DR SUBMITTED THAT ASSESSING OFFICER GAVE APPROPRIATE RELIEF FOR WITHDRAWALS MADE BY THE ASSESSEE FROM BANK. AFTER DEDUCTION OF HOUSEHOLD EXP ENSES HE HAS GIVEN CREDIT AGAINST CASH FOUND BY THE CBI ON 10.10.2006 RECOVER ED AT VARIOUS PREMISES. THE LD CIT(A) HAS JUSTIFIED THE NEED FOR KEEPING HUGE QUANTITY OF CASH BY THE ASSESSEE LOOKING AT HIS BUSINESS. THE RELIEF IS NOT WARRANTED WHEN MAJORL BUSINESS OF THE ASSESSEE IS LOCATED ABROAD AND ATM FACILITIES ARE AVAILABLE AT ALL PLACES. THEREFORE THE LD CIT(A) HAS WRONGLY DELETE D THE ADDITION. 32. AS REGARDS THE DELETION OF ADDITION OF RS. 28.4 7 LAKHS QUA INVESTMENT IN SONALI FARMS THE LD DR SUBMITTED THAT DESPITE VARIO US QUERIES THE ASSESSING OFFICER WAS NOT SUPPLIED THE INFORMATION ON THE BA NK ACCOUNT FROM WHICH THE PAYMENT AS REFLECTED IN THE SEIZED DOCUMENTS WERE M ADE. THEREFORE LD CIT(A) IGNORED THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF EXPENDITURE ON SONALI FARMS AND EVEN IF THE AMOUNT ORIGINATED FROM SINGAPO RE/FOREIGN BANK ACCOUNT NO EVIDENCE WAS ADDUCED IN THIS BEHALF. BY FAILURE TO FILE REQUIRED EVIDENCE BEFORE LOWER ASSESSEE FAILED TO DISCHARGE HIS BURDE N IN SUPPORT OF HIS CLAIM THEREFORE LD. CIT(A) ERRED IN GIVING THIS RELIEF. 33. REGARDING ADDITION OF RS. 5.10 CRORES BEING DEP OSIT IN DEUTSCHE BANK THE LD DR SUBMITTED THAT LD CIT(A) HAD UPHELD THE A DDITION TAKING NOTE OF THE FACT THAT IN TERMS OF SECTION 132(4)(A)/292C PRIMAR Y ONUS OF EXPLAINING THE NATURE OF TRANSACTION AND SOURCE OF AMOUNTS RECORDE D IN DOCUMENTS SEIZED WAS ITA NO2237 3718 3431&4641DEL/13 31 NOT DISCHARGED. HE FURTHER SUBMITTED THAT LD CIT(A) HAS RIGHTLY ENDORSED THE ASSESSING OFFICERS VIEW THAT EVEN IF THE AMOUNT RE PRESENT APPELLANTS FOREIGN INCOME STILL IT WAS REQUIRED TO BE TAXED IN INDIA BE CAUSE HE WAS BEING HELD TO BE RESIDENT. THE LD DR FURTHER SUBMITTED THAT DURIN G APPELLATE PROCEEDINGS BEFORE ITAT ALSO THE LD AR DID NOT ADDUCE EVIDENCE TO EXPLAIN THE SOURCE OF DEPOSITS. THEREFORE IT WAS SUBMITTED THAT LD CIT(A ) HAS RIGHTLY UPHELD THE ADDITION. 34. AS REGARDS ADDITION OF RS. 23.66 LAKHS OUT OF T OTAL CASH FOUND OF RS. 45.47 LAKHS THE LD DR SUBMITTED THAT ASSESSING OFF ICER AFTER GIVING RELIEF OR WITHDRAWAL OF RS. 60.45 LAKHS FROM BANK HAD RIGHTLY CALCULATED THE UN- EXPLAINED CASH AMOUNTING TO RS. 23.66 LAKHS. THEREF ORE THE LD CIT(A) FOUND THE ORDER TO BE CORRECT AND UPHELD THE ADDITION U/S 69 OF THE ACT. 35. LD. COUNSEL FOR THE ASSESSEE IN REPLY VEHEMENTL Y ARGUES THAT THE ITAT IN ASSESSEE OWN CASE HAS NOT DECIDED THE ISSUE OF FORC IBLE STAY. AS ALREADY ARGUED THE ISSUE DECIDED IS TOTALLY DIFFERENT I.E. INTERPR ETATION OF SEC. 6 OF IT ACT IN DIFFERENT CONTEXT WHERE THE ASSESSEE BEING NRI WAS H ELD TO BE RESIDENT BECAUSE OF BUSINESS CONNECTIONS ABROAD. 36. IT IS PLEADED THAT THERE IS NO FORCE IN THE CON TENTION OF LD DR THAT THE ISSUE OF PHYSICAL PRESENCE IN INDIA STANDS DECIDED AGAINST THE ASSESSEE. 37. WE HAVE HEARD THE RIVAL SUBMISSIONS CASE LAWS CITED AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE APPEA LS WERE FIRST HEARD ON 11.2.2014 THEREAFTER WHILE DICTATING THE ORDER CERT AIN FURTHER CLARIFICATIONS WERE REQUIRED THEREFORE THESE APPEALS WERE RE-FIX ED AND CLARIFICATIONS WERE SOUGHT FROM LD AR WHICH WERE FINALLY SUBMITTED ON 1 4.3.2014 AND ALSO FILED A COPY OF ITAT ORDER DATED 21.2.2014 IN THE CASE OF A SSESSEE FOR ASSESSMENT YEARS 2004-05 05-06 & 2006-07 CONTENDING THAT SOME OF TH E ISSUES IN THE PRESENT YEARS ARE ALREADY DEALT BY ITAT IN EARLIER YEARS. L D. DR IS ALSO HEARD THEREON. ITA NO2237 3718 3431&4641DEL/13 32 38. GROUND NO. 1 & 10 IN A.Y. 2007-08 AND GROUND NO .5 & 7 IN A.Y. 2008-09 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDI CATION. 39. WE ADVERT TO THE COMMON LEGAL GROUND TAKEN BY T HE ASSESSEE AS GROUND NO.2 IN BOTH APPEALS REGARDING DETERMINATION OF RES IDENTIAL STATUS. THE DISPUTE OF RESIDENTIAL STATUS IN THESE YEARS HAS ARISEN BEC AUSE THE ASSESSING OFFICER REJECTED THE ASSESSES CLAIM OF BEING NON RESIDENT AND DETERMINED THE STATUS OF THE ASSESSEE AS RESIDENT IN INDIA FINDING THE NUMBER OF DAYS OF STAY IN INDIA BEING MORE THAN 180 DAYS AS PER THE PROVISIONS OF S ECTION 6. PER CONTRA THE CLAIM OF THE ASSESSEE IS THAT HE WAS ILLEGALLY FORC ED TO STAY IN INDIA BECAUSE HIS PASSPORT WAS ILLEGALLY IMPOUNDED AND HE WAS COMPELL ED TO STAY IN INDIA AGAINST HIS WISHES OR FREE WILL. THE LD AR HAS FORCEFULLY A RGUED THAT ASSESSEE HAS BEEN A NON RESIDENT SINCE A LONG TIME AND WAS EARNING O NLY PASSIVE INCOME IN INDIA FOR WHICH HE WAS FILLING REGULAR INCOME TAX RETURNS IN INDIA AND WAS ASSESSED ACCORDINGLY. THE ITAT ORDER DATED 24.7.2012 HOLDIN G THE ASSESSEE AS NON RESIDENT FOR ASSESSMENT YEAR 2001-02 2002-03 & 200 3-04 ON THE BASIS OF NUMBER OF DAYS OF STAY IN INDIA IS IN TOTALLY DIFFE RENT CONTEXT. IT HAS BEEN CONFIRMED BY HON'BLE DELHI HIGH COURT IN I.T.A. NO. 85 87 & 100/2013 VIDE JUDGMENT DATED 25.2.2013 PLACED AT PAPER BOOK PAGES 688 TO 695. 40. FOLLOWING THE SAME ITAT VIDE ANOTHER ORDER DATE D 21.2.2014 FOR ASSESSMENT YEAR 2004-05 05-06 & 06-07 HAS ALSO HEL D THE ASSESSEE TO BE A NON RESIDENT. THE DETAILS OF SOURCES OF INCOME OF ASSES SEE AS PLACED IN THE FORM OF A CHART AT PAPER BOOK PAGE 906 DEPICTS THAT FROM AS SESSMENT YEARS 2001-02 TO 2007-08 THE ASSESSEE EARNED ONLY PASSIVE INCOME FRO M HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. 41. THE CLAIM OF THE ASSESSEE BEING AN NRI FOR THE LAST 23 YEARS ALSO EMERGES FROM THE OBSERVATIONS IN THE ORDER OF HON'BLE DELHI HIGH COURT DATED 5.2.2007 PLACED AT PAPER BOOK PAGES 26 TO 40 VIDE PARA 4 TH E HON'BLE COURT HAS NOTED AS UNDER:- ITA NO2237 3718 3431&4641DEL/13 33 THE RESIDENT MOVED AN APPLICATION ON 2.1.2007 BEFO RE THE SPECIAL JUDGE CLAIMING THAT HE IS NON RESIDENT FOR THE LAST 23 YEARS AND PERMANENTLY SETTLED IN UNITED KINGDOM. HE ALLEGED THAT HE COME TO INDIA ON 28.9.2006 TO ATTEND THE 91 ST BIRTHDAY OF HIS AILING FATHER. WHEN ON 9.10.2006 THE CBI CONDUC TED A SEARCH AT VARIOUS PLACES INCLUDING HIS RESIDENCE AND ARBIT RARY SEIZED PASSPORT OF ALL FAMILY MEMBERS INCLUDING THAT OF RE SPONDENT AND HIS SON. 42. THE FACTS ON RECORD AND THE COMBINED READING OF RELEVANT DOCUMENTS MAKES IT UNDISPUTED THAT THE STATUS OF ASSESSEE DUR ING ALL THESE EARLIER YEARS WAS THAT OF A NON RESIDENT AND PERSON OF INDIAN O RIGIN HIS INDIAN EARNINGS WERE PASSIVE INCOME IN NATURE. DURING ASSESSMENT Y EAR 2007-08 ALSO BEFORE IMPOUNDING OF PASSPORT ON 10.10.2006 OUT OF A TOTAL ELAPSED PERIOD OF 193 DAYS THE ASSESSEE WAS IN INDIA ONLY FOR A PERIOD OF 83 D AYS AS CAN BE VERIFIED FROM THE PAPER BOOK PAGES 1 TO 20 DETAILING STAY IN INDI A AND OUT OF INDIA ALONG WITH COPIES OF PASSPORT ARE PLACED. AFTER 10.10.2006 TIL L 21-9-2011 DUE TO SAID ILLEGAL IMPOUNDING OF PASSPORT AND PASSPORT AUTHOR ITIES ASSESSEE WAS UNABLE TO GO OUT OF INDIA. 43. THE BRIEF FACTS RELATING TO IMPOUNDING OF PASSP ORT ARE O N 10.10.2006 THE CBI IMPOUNDED ASSESSES PASSPORT SUSPECTING HIS ALLEGED BROKERS ROLE IN PURCHASE OF BARAK MISSILES FROM ISRAEL IN CONTRAVEN TION OF DEFENCE PURCHASE POLICIES. ON ASSESSEES APPLICATION AGAINST ILLEGAL IMPOUNDING OF PASSPORT THE LD SPECIAL JUDGE CBI COURT BY ORDER DTD. 15.1.2007 DIRECTED FOR RELEASE OF HIS PASSPORT ON THE FULFILLMENT OF CERTAIN CONDITIONS. BEFORE ASSESSEE COULD COMPLY WITH THOSE STRINGENT CONDITIONS THE CBI CHALLENGED CBI JUDGES ORDER BEFORE HON'BLE DELHI HIGH COURT. BY ORDER ORDER DATED 5.2. 2007 HON'BLE DELHI HIGH COURT REVERSED THIS ORDER OF LD SPECIAL JUDGE CBI. AGAINST THE ORDER OF HON'BLE DELHI HIGH COURT THE ASSESSEE APPROACHED HON'BLE SUP REME COURT AND HON'BLE SUPREME COURT VIDE ORDER DATED 24.1.2008 ORDERED FOR RELEASE OF PASSPORT. IRONICALLY BEFORE THE PASSPORT COULD BE PHYSICALLY RELEASED CONSEQUENT TO ITA NO2237 3718 3431&4641DEL/13 34 SUPREME COURT ORDER THE PASSPORT AUTHORITIES AGAIN IMPOUNDED THE PASSPORT ON 25.3.2008 UNDER SOME OTHER PROVISIONS. AGAINST T HE LATER ORDER OF PASS PORT AUTHORITIES THE ASSESSEE AGAIN APPROACHED HON'BLE D ELHI HIGH COURT AGAINST IMPOUNDING OF PASSPORT VIDE ORDER DATED 5 TH OCTOBER 2010 WAS PLEASED TO ORDER FOR RELEASE OF PASSPORT WITH A CONDITION THAT ASSESSEE WILL TAKE PERMISSION OF THE TRIAL COURT BEFORE SEEKING TO TRAVEL ABROAD. 44. THE ASSESSEE THEN FILED APPLICATION FOR PERMISS ION TO TRAVEL ABROAD FOR TWO MONTHS WHICH WAS DISMISSED BY THE TRIAL COURT V IDE ITS ORDER DATED 25 TH OCTOBER 2010. AGAINST THIS ORDER THE ASSESSEE AG AIN APPROACHED HON'BLE DELHI HIGH COURT AND HON'BLE COURT VIDE ORDER DATED 21.9. 2011 DIRECTED THE TRIAL COURT TO PERMIT THE ASSESSEE TO GO TO LONDON FOR A PERIOD OF TWO WEEKS ON FURNISHING OF SECURITY OF RS. 50 CRORES. A QUERY WA S RAISED BY THE BENCH AS TO WHETHER CONSEQUENT TO ANY EARLIER ORDER BY CBI OR O THER COURTS ORDER PRIOR TO 21-9-2011 WHETHER THE PASSPORT WAS PHYSICALLY RELE ASED TO ASSESSEE. LD AR STATED AT THE BAR THAT PASSPORT WAS NEVER HANDED OV ER TO ASSESSEE PRIOR TO 21- 9-2011 ORDER A FACT WHICH IS CLEAR FROM THE ORDERS THUS DURING THIS ENTIRE PERIOD THE PASSPORT WAS PHYSICALLY NEVER RELEASED. 45. CONSEQUENT TO THE ORDERS OF HON'BLE DELHI HIGH COURT AND IN VIEW OF FURTHER ORDERS OF SPECIAL JUDGE DATED 26.9.11 17.11 .11 31.1.12 & 17.12.12 THE ASSESSEE REMAINED OUT OF INDIA FOR A TOTAL PERI OD OF 71 DAYS. IT IS CONTENDED THAT THESE FACTS ARE VERIFIABLE FROM THE COPIES OF PASSPORT AND DETAILS OF STAY IN INDIA AND ABROAD AS PLACED IN PAPER BOOK 1A. THEREF ORE AT THE FIRST AVAILABLE OPPORTUNITY AFTER RELEASE OF PASSPORT THE ASSESSEE WENT ABROAD AFTER SEEKING SPECIFIC PERMISSION FROM THE TRIAL COURT. HOWEVER DUE TO THESE LEGAL IMPEDIMENTS THE ASSESSEE COULD NOT REMAIN OUTSIDE INDIA FOR MORE THAN 182 DAYS AS ABOUT HALF YEAR HAD ALREADY PASSED BY THE TIME HE WAS PERMITTED. DURING FINANCIAL YEAR 2012-13 HE REMAINED OUT OF IN DIA FOR 252 DAYS AS IS VERIFIABLE FROM PAPER BOOK WHERE DETAILS OF HIS ST AY IN INDIA AND ABROAD ALONG WITH COPIES OF PASSPORT ARE PLACED. IT IS THUS PLEA DED THAT ASSESSEE WAS THUS ITA NO2237 3718 3431&4641DEL/13 35 FORCED TO STAY IN INDIA DUE TO REPEATED IMPOUNDING OF PASSPORT AND CONSEQUENT LITIGATION AND SEEKING COURT PERMISSION FOR TRAVEL OUTSIDE INDIA. 46. THE ASSESSEE WAS FERVENTLY RAISING THE ISSUE OF HIS NRI STATUS AND PRAYING FOR RELEASE OF HIS PASSPORT. IT IS EVIDENT FROM THE SPECIFIC PRAYER RAISED BEFORE VARIOUS COURTS. BEFORE HON'BLE DELHI HIGH COURT AL SO THIS ISSUE WAS PRAYED OF RELEASE HIS PASSPORT IN ORDER TO MAINTAIN HIS NON- RESIDENTIAL STATUS AS IS EVIDENT FROM PARA 6 OF THE HONBLE HIGH COURTS ORDER WHICH READS AS UNDER:- IT WAS CLAIMED THAT IN ORDER TO MAINTAIN HIS NON R ESIDENT STATUS IN ACCORDANCE WITH THE INCOME TAX ACT HE HAS TO RE MAIN OUT OF INDIA FOR MORE THAN 182 DAYS AND THAT CONTINUED SEI ZURE OF HIS PASSPORT JEOPARDIZED HIS NRI STATUS AND RESULTED IN IRREPARABLE LOSS. HE ALSO ALLEGED THAT FOR MORE THAN THREE MONT HS SINCE 10.10.2006 HE HAD TO POSTPONE VISITS ABROAD AND RES CHEDULE BUSINESS MEETINGS BUT SUCH INDEFINITE POSTPONEMENT COULD NOT BE CONTINUED FOR EVER. 47. THEREFORE THE INTENTION AND ANXIETY OF THE ASSE SSEE TO MAINTAIN HIS NRI STATUS DEMONSTRATIVELY EMERGES FROM THE PROCEEDING S. IN THESE FACTS AND CIRCUMSTANCES IT IS VERY CLEAR THAT ASSESSEE MADE E VERY LEGAL EFFORT TO MAINTAIN HIS PAST STATUS AS NON RESIDENT AND ENDEAVORED TO D EFEND HIS LEGAL RIGHTS BEFORE VARIOUS LEGAL FORUMS. HAD THE PASSPORT BEEN RELEASE D AFTER FIRST ORDER OF SPL. JUDGE CBI COURT THE ASSESSEE WOULD HAVE TRAVELLED ABROAD THUS MAINTAINING HIS NRI STATUS IT IS ONLY THE WRONGFUL IMPOUNDING OF PASSPORT WHICH IS THE CAUSE OF PREVENTING THE ASSESSEE FROM EXCERCISING HIS LAWF UL RIGHT OF TRAVELLING ABROAD. IN THE LIGHT OF ABOVE LEGAL HURDLES FACTS AND CIRCUMSTANCES THE LD AR ARGUED THAT FOR THE PURPOSE OF DETERMINATION OF RES IDENTIAL STATUS OF ASSESSEE THE PERIOD OF IMPOUNDING OF PASSPORT WHICH RESULTED IN FORCED/COMPELLED STAY IN INDIA SHOULD BE EXCLUDED WHILE COUNTING THE DAYS OF STAY IN INDIA. 48. THE APPLICATION OF STRICT MEANING OF PROVISIONS IN THIS BEHALF BY LOWER AUTHORITIES LEADS TO MANIFESTLY ABSURD RESULTS WHI CH CANNOT BE THE INTENTION OF LEGISLATURE. IT CANNOT BE INTENDED TO DENY THE NRI STATUS IN CASES OF ILLEGAL ITA NO2237 3718 3431&4641DEL/13 36 CRIMINAL CHARGES AND IMPOUNDING OF PASSPORT DESPITE REPEATED REQUESTS TO ALLOW THE SUBJECT WHO IS NRI SINCE LAST 2 DECADES TO GO OUT OF INDIA AS USUAL. LD. COUNSEL HAS RELIED UPON A NUMBER OF CASE LAWS F OR THE PROPOSITION THAT WHERE APPLICATION OF STRICT AND LITERAL MEANING TO PROVISIONS OF ACT GIVES ABSURD RESULTS THE COURTS CAN INTERPRET THE LANGUAGE SUIT ABLY BY APPLYING THE AIDS OF CONSTRUCTIONS. THIS IS CLAIMED TO BE A FIT CASE WH ICH NECESSITATES THE INTERPRETATION OF THE RELEVANT PROVISIONS BY APPLY ING HARMONIOUS CONSTRUCTION TO THE PROVISION TOGETHER WITH DOCTRINE OF READING DOWN OF PROVISION. ONE OF THESE CASE LAWS IS THAT OF CIT V. JH GOTLA (1985) 1 56 ITR 323 WHEREIN THE HON'BLE SUPREME COURT HAS OBSERVED AS UNDER:- WHERE THE PLAIN LITERAL INTERPRETATION OF A STATUT ORY PROVISION PRODUCES A MANIFESTLY UNJUST RESULT WHICH COULD NEV ER HAVE BEEN INTENDED BY THE LEGISLATURE THE COURT MIGHT MODIFY THE LANGUAGE USED BY THE LEGISLATURE SO AS TO ACHIEVE THE INTENTION O F THE LEGISLATURE AND PRODUCE A RATIONAL CONSTRUCTION. THE TASK OF INTERP RETATION OF A STATUTORY PROVISION IS AN ATTEMPT TO DISCOVER THE I NTENTION OF THE LEGISLATURE FROM THE LANGUAGE USED. IT IS NECESSARY TO REMEMBER THAT LANGUAGE IS AT BEST AN IMPERFECT INSTRUMENT FOR THE EXPRESSION OF HUMAN INTENTION. IT IS WELL TO REMEMBER THE WARNING ADMIN ISTERED BY JUDGE LEARNED HAND THAT ONE SHOULD NOT MAKE A FORTRESS OU T OF THE DICTIONARY BUT REMEMBER THAT STATUTES ALWAYS HAVE SOME PURPOSE OR OBJECT TO ACCOMPLISH AND SYMPATHETIC AND IMAGINATIVE DISCOVER Y IS THE SUREST GUIDE TO THEIR MEANING. IF THE PURPOSE OF A PARTICU LAR PROVISION IS EASILY DISCERNIBLE FROM THE WHOLE SCHEME OF THE ACT WHICH IN THIS CASE IS TO COUNTERACT THE EFFECT OF THE TRANSFER OF ASSETS SO FAR AS COMPUTATION OF INCOME OF THE ASSESSEE IS CONCERNED THEN BEARING T HAT PURPOSE IN MIND WE SHOULD FIND OUT THE INTENTION FROM THE LANGUAGE USED BY THE LEGISLATURE AND IF STRICT LITERAL CONSTRUCTION LEAD S TO AN ABSURD RESULT I.E. A RESULT NOT INTENDED TO BE SUBSERVED BY THE OBJECT OF THE LEGISLATION FOUND IN THE MANNER INDICATED BEFORE T HEN IF ANOTHER CONSTRUCTION IS POSSIBLE APART FROM STRICT LITERAL CONSTRUCTION THEN THAT CONSTRUCTION SHOULD BE PREFERRED TO THE STRICT LITE RAL CONSTRUCTION. THOUGH EQUITY AND TAXATION ARE OFTEN STRANGERS ATT EMPTS SHOULD BE MADE THAT THESE DO NOT REMAIN ALWAYS SO AND IF A CO NSTRUCTION RESULTS IN EQUITY RATHER THAN IN INJUSTICE THEN SUCH CONSTRUC TION SHOULD BE PREFERRED TO THE LITERAL CONSTRUCTION. FURTHERMORE IN THE INSTANT CASE WE ARE DEALING WITH AN ARTIFICIAL LIABILITY CREATED FOR COUNTERACTING THE EFFECT ONLY OF ATTEMPTS BY THE ASSESSEE TO REDUCE T AX LIABILITY BY TRANSFER. ITA NO2237 3718 3431&4641DEL/13 37 49. THE ASSESSEES CASE GETS FURTHER STRENGTH FROM THE CASE LAW OF CWS INDIA LTD. V. CIT (1994) 208 ITR 649 (SC) WHEREIN THE HON' BLE SUPREME COURT HAS OBSERVED AS UNDER:- WHERE THE LANGUAGE OF THE STATUTE IN THE ORDINARY MEANING AND GRAMMATICAL CONSTRUCTION LEADS TO MANIFEST CONTRAD ICTION OF THE APPARENT PURPOSE OF THE ENACTMENT OR TO SOME INCON VENIENCE OR ABSURDLY WHICH CAN HARDLY HAVE BEEN INTENDED A CONS TRUCTION MAY BE PUT UPON IT WHICH MODIFIES THE MEANING OF THE WO RDS AND EVEN THE STRUCTURE OF THE SENTENCE THIS MAY BE DONE BY DEPARTING FROM THE RULES OF GRAMMER BY GIVING AN UNSUAL MEAN ING TO PARTICULAR WORDS OR BY REJECTING THEM ALTOGETHER O N THE GROUND THAT THE LEGISLATURE COULD NOT POSSIBLY HAVE INTEND ED WHAT ITS WORDS SIGNIFY AND THAT THE MODIFICATIONS MADE ARE M ERE CORRECTIONS OF CARELESS LANGUAGE AND REALLY GIVE TH E TRUE MEANING. WHERE THE MAIN OBJECT AND INTENTION OF TH E STATUTE ARE CLEAR IT MUST NOT BE REDUCED TO A NULLITY BY T HE DRAFTSMANS UNSKILFULNESS OR IGNORANCE OF THE LAW EXCEPT IN A CASE OF NECESSITY OR THE ABSOLUTE INTRACTABILITY OF THE LA NGUAGE USED. LORD REID HAS SAID THAT HE PREFERS TO SEE A MISTAKE ON THE PART OF THE DRAFTSMAN IN DOING HIS REVISION RATHER THAN A D ELIBERATE ATTEMPT TO INTRODUCE AN IRRATIONAL RULE THE CANONS OF CONSTRUCTION ARE NOT SO RIGID AS TO PREVENT A REALI STIC SOLUTION. 50. SIMILARLY IN THE CASE LAW OF KP VERGHESE V. ITO 13 ITR 597 THE HON'BLE SUPREME COURT HAS OBSERVED AS UNDER:- INTERPRETATION OF STATUTORY ENACTMENT IS NOT A MEC HANICAL TASK IT IS ALSO AN ATTEMPT TO DISCOVER THE LEGISLATIVE I NTENT FROM THE LANGUAGE USED PLAIN LITERAL INTERPRETATION OF STA TUTORY PROVISION HAS TO BE AVOIDED IF RESULTS IN ABSURD AND UNREASON ABLE CONSEQUENCES NOT IN CONSONANCE WITH LEGISLATIVE IN TENT SUCH AVOIDANCE IS NECESSARY TO ARRIVE AT THE OBVIOUS INT ENTION OF THE LEGISLATIVE AND TO PRODUCE RATIONAL CONSTRUCTION OF THE STATUTE. 51. LD. COUNSEL HAS HEAVILY RELIED ON THE CASE OF V IPIN KUMAR WHEREIN IN SIMILAR FACTS ABOUT QUESTION OF NRI STATUS GOVT. T HROUGH ASG UNDERTOOK TO CONSIDER THE ISSUE SUITABLE. THUS THE RULE OF STRIC T INTERPRETATION OF RESIDENTIAL STATUS IS NOT ABSOLUTE. ITA NO2237 3718 3431&4641DEL/13 38 52. IN THE LIGHT OF THE AFOREMENTIONED FACTS CIRCU MSTANCES AND JUDICIAL PRECEDENTS WE HAVE TO EXAMINE WHETHER THE STRICT AND LITERAL CONSTRUCTION OF SEC 6 AND OTHER PROVISIONS IN THIS BEHALF AS PROPOS ED BY THE LOWER AUTHORITIES LEADS TO ABSURD RESULTS WHICH CANNOT BE INTENDED BY LEGISLATURE. 53. IT HAS BEEN HELD BY LD. CIT(A) AND VEHEMENTLY P LEADED BY LD. CIT(DR) THAT ISSUE ABOUT RESIDENTIAL STATUS ON THE BASIS OF PHYSICAL PRESENCE IN INDIA IS COVERED AGAINST ASSESSEE BY VIRTUE OF ITAT JUDGMENT WHICH IS CONFIRMED BY HONBLE DELHI HIGH COURT. THEREFORE WHAT IS TO BEE N ONLY SEEN IS THE PHYSICAL PRESENCE OF ASSESSEE IN INDIA FOR MORE THAN 182 DAY S AND NOTHING ELSE IS TO BE CONSIDERED. IT IS PLEADED THAT PROVISION DO NOT LAY DOWN ANY DIFFERENCE IN VOLUNTARY OR FORCED STAY AS IS BEING PLEADED BY THE ASSESSEE. 54. PER CONTRA ASSESSEE CONTENDS THAT THE EARLIER I TAT ORDER HAS BEEN RENDERED ALTOGETHER ON A DIFFERENT ISSUE I.E. THE N ON RESIDENT ASSESSEE THOUGH NOT REMAINED IN INDIA FOR MORE THAN 182 DAYS WAS WI LLY NILLY HELD AS RESIDENT BECAUSE IT WAS ALLEGED TO HAVE BEEN DOING GLOBAL BU SINESS FROM INDIA. AN ALLEGATION WHICH HAS BEEN FACTUALLY AND LEGALLY RE FUTED BY ITAT AND CONFIRMED BY HONBLE HIGH COURT. THE ISSUE IN QUESTION OF ILL EGAL IMPOUNDING OF PASSPORT ILLEGAL RESTRAIN IN INDIA AND CONSEQUENT LITIGATIO N WAS NEITHER IN QUESTION NOR AN ISSUE AT ALL IN EARLIER YEARS. THEREFORE THE EA RLIER ITAT ORDER IS ON TOTALLY DIFFERENT SET OF FACTS AND LEGAL PROPOSITIONS WHIC H CANNOT BE HELD TO BE COVERING THE ISSUES IN QUESTION. THE ISSUE OF LITER AL OR STRICT INTERPRETATION AND THESE PECULIAR FACTS ABOUT UNTENABLE IMPOUNDING OF PASSPORT AND RESTRAIN ON TRAVEL OUT OF INDIA WAS NOT AT ALL PRESENT IN EARL IER YEARS. THUS A JUDGMENT WHICH HAS NO PARITY OF FACTS OR ISSUES CANNOT BE AP PLIED TO PRESENT CASE. THESE ISSUES CANNOT BE SUMMARILY HELD TO BE COVERED AGAIN ST ASSESSEE ON ASSUMPTIONS AND PRESUMPTIONS AS IS BEING CANVASSED BY THE REVEN UE. 55. AFTER CAREFUL CONSIDERATION OF THE FACTS WE ARE INCLINED TO AGREE WITH LD. COUNSEL FOR THE ASSESSEE THAT FACTS AND LEGAL ISSUE S BEFORE US AND EARLIER YEARS ITA NO2237 3718 3431&4641DEL/13 39 ARE SIGNIFICANTLY DIFFERENT. IN EARLIER YEARS THE I TAT WAS CONCERNED WITH A TOTALLY DIFFERENT SET OF FACTS I.E. THE ASSESSEE TH OUGH NOT PHYSICALLY PRESENT IN INDIA FOR MORE THAN 182 DAYS WAS ASSUMED TO BE RESI DENT ON THE PLEA THAT IF ASSESSEE CARRIES ON BUSINESS FROM INDIA THEN HE BEC OMES A RESIDENT EVEN WITHOUT PHYSICAL PRESENCE OF 182 DAYS IN INDIA. THI S ASSUMPTION AND INTERPRETATION OF DEPARTMENT WAS DISLODGED AND REJE CTED BY THE ITAT IN EARLIER YEARS WHICH HAS BEEN CONFIRMED BY HONBLE HIGH COU RT. THUS WE ARE OF THE VIEW THAT ASSESSEES CASES BEFORE US CANNOT BE HELD TO BE DIRECTLY COVERED AGAINST IT ON THE BASIS OF SAID EARLIER YEARS ITAT ORDERS. THIS FINDING OF LD. CIT(A) IS REVERSED. 56. IN TAX JURISPRUDENCE VARIOUS COUNTRIES/ JURISDIC TIONS HAVE ENACTED DIFFERENT CRITERIA OF DAYS OF STAY TO DETERMINE RES IDENTIAL OR NRI STATUS. THE INDIAN LAW PRESCRIBES 182 DAYS OF STAY OUTSIDE INDI A AS A PERMISSIBLE WAY OF CLAIMING THE NRI STATUS. THE LAW PROVIDES THAT ASS ESSEE HAS A LIBERTY TO CHOOSE THE PRESCRIBED NUMBER OF DAYS OF STAY OUTSIDE INDIA . IT IS INGRAINED IN THE PROVISION THAT IN EXERCISE OF THIS RIGHT ASSESSEE H AS TO MOVE FROM ONE COUNTRY TO OTHER TO COMPLY WITH THE RELEVANT PROVISIONS AND RE GULATIONS IN THIS BEHALF. THE ASSESSEES CASE BEFORE US DOES POSE A PECULIAR CASE WHERE PASSPORT IS ILLEGALLY IMPOUNDED BY GOVT. AGENCIES PUTTING EMBARGO ON AS SESSEES LEAVING INDIA. THE IMPOUNDING IS HELD TO BE UNJUSTIFIED BY CBI COU RT IN FIRST INSTANCE AND BY THE HONBLE SUPREME COURT ULTIMATELY AFTER INTENSE L ITIGATION IN THIS BEHALF. THE INTERVENING PERIOD AMOUNTS TO BEING A COMPELLED /FORCED STAY IMPOSED BY WRONGFUL APPLICATION OF LAW BY THE GOVT. AGENCY AS HELD BY THE APEX COURT. THIS RESULTS IN RESTRAINT ON ASSESSEE TO TRAVEL OUT SIDE INDIA. CBI COURT OF COMPETENT JURISDICTIONS HOLDS THE IMPOUNDING UNJUSTIFIED AND DIRECTS THE RELEASE OF PASSPORT. CBI WITHOUT RELEASING IT APPEALS TO HIGH COURT WHICH UPHOLDS THE IMPOUNDING. ASSESSEE FILES SLP BEFORE SUPREME COURT WHICH IS PLEASED TO HOLD THAT IMPOUNDING OF PASSPORT IS UNJUSTIFIED AND DIRE CTS THE RELEASE. BEFORE PASSPORT IS ACTUALLY RELEASED IT IS RE IMPOUNDED BY THE PASSPORT AUTHORITIES. AGAIN AFTER ONE MORE ROUND OF LITIGATION PASSPORT I S ULTIMATELY RELEASED ACTUALLY ITA NO2237 3718 3431&4641DEL/13 40 AND ASSESSEE IMMEDIATELY LEAVES INDIA. ULTIMATELY C BI DROPS ALLEGED CHARGES AND NO FIR IS APPLIED TO BE CLOSED. 57. THESE PROCEEDINGS CLEARLY REVEAL THAT THE REPEA TED IMPOUNDING OF ASSESSEES PASSPORT AND LODGING OF CRIMINAL CASE WA S FOUND TO BE UNTENABLE BY COURTS. THIS ENTANGLED THE ASSESSEE INTO SPAT OF LI TIGATION FORCING HIM TO STAY IN INDIA AND UNWILLINGLY LOOSE HIS NRI STATUS ON STRIC T AND LITERAL INTERPRETATION OF RELEVANT PROVISION. THE PLEA OF IMMINENT LOSS OF NR I STATUS CONSEQUENT TO ILLEGAL RESTRAINT ON ASSESSEE FROM TRAVELING OUTSID E INDIA IS PLEADED BEFORE HONBLE HIGH COURT AS MENTIONED ABOVE. THUS LOOKING AT THE MATTER FROM ALL POSSIBLE ANGLES THE ASSESSEE WAS RESTRAINED BY GOVT . FROM TRAVELING ABROAD COMPELLED TO STAY IN INDIA FOR MORE THAN 180 DAYS. THE CIRCUMSTANCES WERE BEYOND ASSESSEES CONTROL AND NO FAULT CAN BE ATT RIBUTED TO ASSESSEE IN THIS BEHALF. 58. IN OUR CONSIDERED VIEW THESE FACTS AND CIRCUMS TANCES CREATE A PECULIAR SITUATION. DUE TO INITIATIVE ON THE PART OF GOVT. A GENCY WHICH IS HELD TO BE UNTENABLE IT BECAME IMPOSSIBLE FOR THE ASSESSEE T O GO OUT OF INDIA. IF ONLY A STRICT AND LEGAL MEANING IS ASSIGNED TO RELEVANT PR OVISION IT LEADS TO A MANIFEST ABSURDITY THEREBY DENYING A LAWFUL ENTITLEMENT TO A N ASSESSEE BY AN ACTION OF A GOVT. AGENCY WHICH IS HELD TO BE UNTENABLE BY COURT S AND THE FIR IS ULTIMATELY CLOSED BY CBI. ASSESSEE DID NOT SIT IDLE AND PURSU ED LEGAL REMEDIES REQUESTING RELEASE OF PASSPORT TO ENABLE HIM TRAVELLING OUT O F INDIA TO LOOK AFTER HIS WORLD-WISE BUSINESS. THUS THE ASSESSEE WAS DILIGENT IN PROTECTING HIS LEGAL RIGHTS. THE ASSESSEES OVER STAY IN INDIA IS NEITHE R ATTRIBUTABLE TO HIS VOLITION NOR FREE WILL AND IS A RESULT OF UNTENABLE ACTIONS OF IMPOUNDING HIS PASSPORT BY EXECUTIVE ORDERS WHICH ARE QUASHED BY HIGHEST COURT. IN OUR CONSIDERED VIEW IN THESE CIRCUMSTANCES THE LITERAL MEANING OF THE PRO VISIONS LEAD TO A MANIFEST ABSURDITY IN AS MUCH AS BY UNTENABLE ACTIONS OF EXE CUTIVE A TAX PAYER IS EXPOSED TO THE PERIL OF LOOSING HIS VALUABLE RIGHT U NDER TAXATION LAW I.E. RETAINING HIS NRI STATUS. IN THE ENTIRE EPISODE NO FAULT CAN BE ATTRIBUTED TO ASSESSEE WHO HAS SHOWN ACTIVE DILIGENCE IN DEFENDIN G HIS LEGAL RIGHTS. IN OUR ITA NO2237 3718 3431&4641DEL/13 41 CONSIDERED VIEW LEGISLATURE CANNOT HAVE ENACTED THI S PROVISION WITH AN INTENTION TO FORFEIT THE NRI STATUS BY UNLAWFULLY C OMPELLING THE ASSESSEE NOT TO LEAVE INDIA EVEN IF HE HAS FOUND NOT TO HAVE VIOLAT ED THE ALLEGED LAW. IN THE GIVEN FACTS AND CIRCUMSTANCES WHICH WE CONSIDER TO BE VERY PECULIAR THE STRICT AND LITERAL INTERPRETATION APPLIED BY LOWER AUTHORI TIES TO THE PROVISIONS LEADS TO MANIFEST ABSURDITY RESULTING IN A MEANING WHICH CAN NOT BE INTENDED BY THE LEGISLATURE. THE OPENING EXAMPLE PROPOSED BY LD COUN SEL FOR ASSESSEE GIVES A FAIR INDICATION ABOUT ABSURDITY AND UNINTENDED RESU LTS IF STRICT AND LITERAL CONSTRUCTION OF THE PROVISIONS IS APPLIED TO FACTS BEFORE US. 59. THE CASE OF VIPIN KUMAR CITED BY THE LD COUNSEL COPY WHEREOF IS PLACED ON RECORD ALSO INDICATES THAT GOVT. THROUGH ASG LOO KING AT THE PECULIAR FACTS OF THAT CASE AND PLEA OF HARDSHIP RAISED BY ASSESSEE; HAS UNDERTAKEN BEFORE HONBLE SUPREME COURT TO PROPERLY CONSIDER THE ISSUE OF NRI STATUS QUESTIONED BY WRONGFUL IMPOUNDING OF PASSPORT. THUS THE GOVT. IS VERY MUCH ALIVE TO THE UNINTENDED CONSEQUENCES POSED BY SUCH UNTENABLE ACT IONS OF PASSPORT IMPOUNDING. WE DO NOT KNOW THE ULTIMATE RESULT OF T HE CASE BUT THE ORDER GIVES A FAIR INDICATION THAT GOVT. DID NOT TREAT THE PROV ISION ABOUT RESIDENTIAL STATUS AND PHYSICAL PRESENCE IN CASE OF IMPOUNDING TO BE AN ABSOLUTE RULE. IN OUR VIEW GOVERNMENTS UNDERTAKING THROUGH ASG IN VIPIN KUMARS CASE THROWS A LIGHT ON POSSIBILITY OF APPLYING RULES OF INTERPRET ATION TO BE ADOPTED IN CASE OF ABERRATIONS IN NRI STATUS CAUSED BY UNTENABLE IMPOU NDING OF PASSPORT. 60. IN VIEW OF THE FOREGOING AND TAKING GUIDANCE FR OM HONBLE SUPREME COURT ORDER IN THE CASE OF VIPIN KUMAR(SUPRA) WE AR E INCLINED TO HOLD THAT THE STRICT AND LITERAL INTERPRETATION PUT BY LOWER AUTH ORITIES IS NOT AN ABSOLUTE RULE. LOOKING AT FACTS AND UNINTENDED HARDSHIP CAUSED T O THE ASSESSEE BY ILLEGAL IMPOUNDING OF PASSPORT AND THE FACT THAT ASSESSEE IS NOT FOUND TO BE ON THE WRONG SIDE OF LAW ON THESE ISSUES AND WHOSE PASSPOR T WAS UNTENABLY IMPOUNDED AND RELEASED AFTER A LONG WINDING AND APPARENTLY TI RING SPAT OF LEGAL PROCEEDINGS. IN OUR CONSIDERED VIEW THE LITERAL MEA NING AND STRICT INTERPRETATION CANNOT BE APPLIED TO DECIDE THE NRI STATUS IN THE PECULIAR FACTS ITA NO2237 3718 3431&4641DEL/13 42 OF THIS CASE. THE LITERAL MEANING MANIFESTLY LEADS TO UNINTENDED ABSURDITIES AND UNDUE HARDSHIP ON AN ASSESSEE WHO IS NOT FOUND TO H AVE VIOLATED THE LAW. UNTENABLE IMPOUNDING OF PASSPORT AND RESTRICTION ON FREEDOM OF MOVEMENT TO TRAVEL ABROAD AND THEREAFTER ADVERSE TAX CONSEQUENCE S CANNOT BE THE INTENTION OF LEGISLATURE. IN THESE CIRCUMSTANCES IT IS DESIRA BLE TO APPLY APPROPRIATE RULES OF INTERPRETATION OF STATUTES. OUR VIEW IS FORTIFIE D BY HONBLE SUPREME COURT JUDGMENTS IN THE CASES OF J H GOTLA K P VERGHES C W S (INDIA) LTD. MYSORE MINERAL AND BHARAT CEMENT WORKS (ALL SUPRA). 61. IN OUR CONSIDERED VIEW IN THE FACTS AND CIRCUM STANCES THE RULES OF INTERPRETATION OF READING DOWN OF STATUTORY PROVIS ION AND HARMONIOUS CONSTRUCTION WILL PROVIDE MOST APPROPRIATE INTERPR ETATION AND MEANING TO THE RELEVANT PROVISIONS FOR DETERMINING THE NRI STATUS . APPLYING THESE RULES OF INTERPRETATION RELEVANT RULES ARE TO BE READ TOGETH ER AND WITH HARMONIOUS CONSTRUCTION THE PROVISION IS TO BE READ WITH AN EX CEPTION THAT IF STAY OF AN ASSESSEE IN INDIA IS EXTENDED DUE TO ANY UNTENABLE ACTION WHICH IS PROVED TO BE SO BY COMPETENT COURT IN THAT CASE THE OVER ST AY CAUSED BY SUCH UNTENABLE RESTRICTION OF MOVEMENT OUT OF INDIA SHOULD BE EXCL UDED WHILE CALCULATING THE NO. OF DAYS OF STAY IN INDIA. IN OUR CONSIDERED OP INION THIS INTERPRETATION EVENS THE SCALE JUDICIAL CONSCIENCE AND DOES NOT LEAD TO ANY UNINTENDED HARDSHIPS. IT PROVIDES A LEVEL PLAYING FIELD TO PERSONS WHO ARE S UBJECTED TO UNTENABLE RESTRICTION ON THEIR CONSTITUTIONAL LIBERTIES OF F REE MOVEMENT OUTSIDE INDIA. WITH THESE OBSERVATIONS WE HOLD THAT THE NO. OF DAY S OF IMPOUNDING OF ASSESSEES PASSPORT TILL IT IS EFFECTIVELY RELEASED AS MENTIONED ABOVE SHOULD BE EXCLUDED WHILE COUNTING THE DAYS OF HIS STAY IN INDI A. FROM THE NO. OF DAYS GIVEN ABOVE THE ASSESSEE DESERVES TO BE ACCORDED WI TH STATUS OF NON RESIDENT IN INDIA. THUS THE CLAIM OF THE ASSESSEE TO BE TRE ATED AS NONRESIDENT IS ALLOWED AND THE ORDER OF LD CIT(A) ON THIS ISSUE IS REVERSE D. 62. THE SECOND ASPECT OF ARGUMENTS OF LD AR REST UP ON THE DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE WHEREIN HE HAS ARGUED THAT IN THE ABSENCE OF PASSPORT IT WAS IMPOSSIBLE FOR THE ASSESSEE TO MOVE OUT OF INDIA AND THEREFORE ITA NO2237 3718 3431&4641DEL/13 43 DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE IS SQUAREL Y APPLICABLE. THE LD AR HAS RELIED UPON NUMBER OF CASE LAWS IN THIS RESPECT WHI CH ARE LISTED ABOVE. IN THE CASE OF GUJARAT ASSEMBLY ELECTION MATTER (2002) 8 S SC 237 THE HON'BLE SUPREME COURT HAS HELD AS UNDER:- THE MAXIM OF LAW IMPOTENTIA EXCUSAT LEGEM IS INTIM ATELY CONNECTED WITH ANOTHER MAXIM OF LAW LEX NON COGIT A D IMPOSSIBILIA IMPOTENTIA EXCUSAT LEGEM IS THAT WHEN THERE IS A NECESSARY OR INVINCIBLE DISABILITY TO PERFORM THE M ANDATORY PART OF THE LAW THAT IMPOTENTIA EXCUSES. THE LAW DOES NO T COMPEL ONE TO DO THAT WHICH ONE CANNOT POSSIBLY PERFORM. THERE FORE WHEN IT APPEARS THAT THE PERFORMANCE OF THE FORMALITIES PRE SCRIBED BY A STATUTE HAS BEEN RENDERED IMPOSSIBLE BY CIRCUMSTANC ES OVER WHICH THE PERSONS INTERESTED HAD NO CONTROL LIKE A N ACT OF GOD THE CIRCUMSTANCES WILL BE TAKEN AS A VALID EXCUSE. 63. SIMILARLY THE APEX COURT IN THE CASE OF STATE OF R AJASTHAN V. SHAMSHER SINGH (1985) AIR 1082 APPLIED THE DOCTRINE OF IMPOSS IBILITY OF PERFORMANCE BY OBSERVING AS UNDER:- MR. JETHMALANI PLACED BEFORE US A PASSAGE FROM BRO OMS LEGAL MAXIMS (P. 162) 10 TH EDN. WHERE THE DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE (LEX NON COGIT AD IMPORSIBILIA) HAS BEE N DISCUSSED IT HAS BEEN INDICATED THEREIN THAT HOWEVER MANDATORY T HE PROVISIONS MAY BE WHERE IT IS IMPOSSIBLE OF COMPLI ANCE THAT WOULD BE A SUFFICIENT EXCUSE FOR NON COMPLIANCE PA RTICULARLY WHEN IT IS A QUESTION OF THE TIME FACTOR. KEEPING T HE ATTENDANT CIRCUMSTANCES OF THIS CASE IN VIEW WE FIND IT DIFF ICULT TO HOLD THAT THE TIME TAKEN BY THE STATE GOVT. CAN AMOUNT TO WITHHOLDING OF THE REPRESENTATION WHICH RESULTED IN NON COMPLIANCE OF SEC. 10 OF THE ACT SO AS TO VITIATE T HE DETENTION. 64. SIMILAR WERE THE FINDINGS IN THE CASE LAW OF STAN DARD CHARTERED BANK V. DIRECTORATE OF ENFORCEMENT (2005) 275 ITR 81 (SC) W HEREIN THE HON'BLE APEX COURT HELD AS UNDER:- IT IS AN ACCEPTABLE LEGAL MAXIM THAT LAW DOES NOT COMPEL A MAN TO DO THAT WHICH CANNOT POSSIBLY BE PERFORMED (IMPO TENTIA EXCUSAT LEGEM). THIS PRINCIPLE CAN BE FOUND IN BENN IONS STATUTORY INTERPRETATION M 4 TH EDN. AT P/969 ALL CIVILIZED SYSTEMS OF LAW IMPORT THE PRINCIPLES THAT LEX NOT C OGIT AD ITA NO2237 3718 3431&4641DEL/13 44 IMPOSSIBILIA. AS PATTERNSON J. SAID THE LAW COMP ELS NO IMPOSSIBILITY. BENNION DISCUSSING ABOUT LEGAL IMPO SSIBILITY AT P. 970 STATES THAT. IF AN ENACTMENT REQUIRES WHAT IS L EGALLY IMPOSSIBLE IT WILL BE PRESUMED THAT PARLIAMENT INTE NDED IT TO BE MODIFIED SO AS TO REMOVE THE IMPOSSIBILITY OF PERFO RMANCE (LEX NON COGIT AD IMPOSSIBILIA) IN NUMEROUS CASES (STATE OF RAJASTHAN V. SHAMSHER SINGH (1985) SUPP. SCC 416. SPL. REFERENCE NO.1 OF 2002 REPORTED IN (2002) 8 SCC 237. 65. THE LD AR HAS ALSO RELIED UPON THE DOCTRINE OF FORCE MAJEURE WHICH REFERS TO SITUATIONS OF HAPPENING OF CERTAIN EVENTS WHICH IS BEYOND THE CONTROL OF THE PARTIES. THE DOCTRINE OF FORCE MAJEURE HAS B EEN EXPLAINED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF GLOBAL STEEL PHILIPPINES V. STC OF INDIA LTD & OTHERS IN I.T.A. NO. 4615/2009 & I.T.A. NO.53 16/2009 WHEREIN IT HAS BEEN HELD THAT PARTIES SHALL BE RELEASED FROM RESPO NSIBILITY FOR A FAILURE TO FULFILL COMPLETELY OR PARTIALLY THEIR OBLIGATIONS U NDER THE PRESENT CONTRACT IF IT IS A CONSEQUENCE OF FORCE MAJEURE CIRCUMSTANCES SUC H AS FIRE FLOOR EARTHQUAKE WAS MILITARY OPERATIONS OF ANY KIND BLOCKADES PR OHIBITION OF EXPORT/IMPORT STRIKES OR SOME OTHER CONTINGENCIES BEYOND CONTROL OF THE PARTIES 66. WHEN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASES ARE EXAMINED WITH RESPECT TO JUDICIAL PRONOUNCEMENTS AS RELIED U PON BY THE LD AR WE FIND THAT ASSESSEE WAS FORCED TO STAY IN INDIA FOR A PER IOD OF MORE THAN 182 DAYS BY WHICH HE LOST HIS NRI STATUS AND BECAME LIABLE TO E NHANCED INCOME TAX ON HIS GLOBAL. THE LEGISLATURE IN ITS WISDOM MIGHT NOT HAV E ENVISAGED SUCH A SITUATION WHEREIN A PERSON IS FORCED TO BECOME A RESIDENT DUE TO WRONGFUL RESTRAINT OF SUBJECT IN ABSENCE OF ELIGIBILITY TO TRAVEL OUTSIDE INDIA. THEREFORE ASSESSEES CASE BECOMES FIT WHERE DOCTRINE OF FORCED MEAJURE MAY BE APPLICABLE AS IT WAS IMPOSSIBLE FOR THE ASSESSEE TO MOVE OUT OF COUN TRY AND THEREFORE DOCTRINE OF IMPOSSIBILITY OF PERFORMANCE IS ALSO APPLICABLE. THIS IS A FIT CASE WHERE STRICT LEGAL READING OF THE PROVISIONS REGARDING RESIDENCE IN INDIA SHOULD NOT BE APPLIED. AN INTERPRETATION OR CONSTRUCTION SHOUL D BE APPLIED WHICH RESULTS IN HARMONIOUS MEANING EQUITY RATHER THAN INJUSTICE. ITA NO2237 3718 3431&4641DEL/13 45 67. IN OUR CONSIDERED VIEW APPLICATION OF RULE OF I NTERPRETATION OF READING DOWN AND HARMONIOUS CONSTRUCTION AUTOMATICALLY T AKE CARE OF ASSESSEES ARGUMENTS ON DOCTRINES OF IMPOSSIBILITY OF PERFORMA NCE AND FORCE MAJEURE . IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE HOL D THAT FOR CALCULATION OF STAY IN INDIA FOR THESE YEARS THE SAME SHOULD BE CA LCULATED AFTER EXCLUSION OF DAYS OF WRONGFUL IMPOUNDING OF PASSPORT WHICH CONST ITUTES FORCED STAY IN INDIA. THUS PERIOD FOR WHICH ASSESSEE COULD NOT TRAVEL OUT SIDE INDIA IN ABOVE FACTS AND CIRCUMSTANCES I.E. FROM 10.10.2006 TO 21-9-2011 I. E. TILL THE PASSPORT WAS FINALLY HANDED OVER TO ASSESSEE AND ALLOWED TO TRAV EL OUTSIDE INDIA SHOULD BE EXCLUDED. CONSEQUENTLY ASSESSEES RESIDENTIAL STATUS IS HELD TO BE AS NON RESIDENT FOR THE YEARS BEFORE US. THEREFORE GROUN D NO.2 IN BOTH THE YEARS IS ALLOWED. 68. WE MAY HASTEN TO ADD THAT THIS CONCLUSION IS BA SED ON CONSIDERATION OF PECULIAR FACTS AND CIRCUMSTANCES IN THE PRESENT CAS ES AND IT CANNOT BE USED AS A GENERAL PRECEDENT. 69. VIDE GROUND NO.3 THE ASSESSEE HAS CHALLENGED TH AT LD CIT(A) WAS NOT JUSTIFIED TO DIRECT THE ASSESSING OFFICER TO PURSU E THE REFERENCE MADE TO GOVT. OF MAURITUS GOVT. OF JERSEY AND BRITISH ISLANDS TO ARRIVE AT REAL FACTS REGARDING FUNDS INVOLVED IN VARIOUS ENTITIES ABROAD. WE FIND THAT THIS DIRECTION GIVEN TO ASSESSING OFFICER DOES NOT AMOUNT TO SET ASIDE OF T HE AOS ORDER. CIT(A) HAS TRIED TO CAUTION THE AO TO KEEP THE INTEREST OF REV ENUE IN MIND. GENERALLY THE APPELLATE AUTHORITIES SHOULD RESTRICT THEIR CONCLUS IONS TO THE SUBJECT MATTER AND SHOULD AVOID GENERALIZED DIRECTIONS. SUCH DIRECTIONS ARE SUSCEPTIBLE TO BE TAKEN TO BE ORDERS OF A HIGHER AUTHORITY. LD CIT(A) HAS D ELETED THE ENTIRE ADDITION WITHOUT ANY PRE CONDITION THEREFORE GENERAL INSTR UCTIONS GIVEN TO ASSESSING OFFICER DO NOT AMOUNT TO BINDING ORDER AND AT BEST AMOUNT TO OBITER DICTA. TO PROTECT THE INTEREST OF REVENUE IS THE DUTY OF INVE STIGATION OR ASSESSING OFFICER EVEN WITHOUT ANY DIRECTION. CONSEQUENTLY WE ARE OF THE VIEW THAT OBSERVATIONS OF LD CIT(A) ARE GENERAL AND INCONSEQUENTIAL OBSERV ATIONS REQUIRING NO INTERFERENCE. ITA NO2237 3718 3431&4641DEL/13 46 70. GROUND NO.4 RELATES TO ADDITION MADE ON PROTECT IVE BASIS. WE FIND THAT LD CIT(A) HAS CLEARLY HELD THAT SHARE CAPITAL WAS S UBSCRIBED BY PALM TECHNOLOGIES LTD. WHICH IS A SEPARATE ENTITY. LD. C IT(A) HELD BY A CLEAR FINDING THAT THE CAPITAL DID NOT BELONG TO ASSESSEE BUT TO A DISTINCT ENTITY WHOSE EXISTENCE IS NOT DENIED. AFTER GIVING SUCH CLEAR FIN DING HE SHOULD NOT HAVE GIVEN FINDING ABOUT ADDITION ON PROTECTIVE BASIS. PALM TECHNOLOGIES LTD. AND ASSESSEE ARE HELD TO BE TWO DIFFERENT PERSONS. THE LD CIT(A) HAS HELD THAT OWNERSHIP OF PALM TECHNOLOGIES LTD IS KNOWN AND APP ELLANT WAS NOT A SHAREHOLDER IN PALM TECHNOLOGIES WHICH WAS OWNED BY ONE MRS. EA HALFLAND. IT IS UNDISPUTED THAT BOTH UBBS AND PTL ARE DULY INCORP ORATED COMPANIES UNDER THE LAWS OF SHARJAH AND MAURITIUS RESPECTIVELY. THE LD CIT(A) HAS HIMSELF OBSERVED THAT THIS AMOUNT CANNOT BE HELD AS UN-EXPLA INED MONEY/INVESTMENT OF APPELLANT THEREAFTER THERE IS NO JUSTIFICATION I N KEEPING A PROTECTIVE ADDITION IN THIS BEHALF. WE ALSO FIND THAT SIMILAR ADDITION ON SUBSTANTIVE BASIS WAS MADE IN ASSESSMENT YEAR 2004-05 AND TRIBUNAL ON REVENUE APPEAL IN I.T.A. NO.2605/DEL/2013 HAS DEALT WITH THIS ISSUE AT PAGE 60 ONWARDS VIDE ORDER DATED 21.2.2014 AND VIDE PARA 7.5. AT PAGE 68 HAS D ISMISSED THE APPEAL OF REVENUE ON THIS ISSUE. DURING THESE YEARS THE LD CI T(A) HAS HOWEVER MADE THE ADDITION ON PROTECTIVE BASIS WITHOUT JUSTIFICATION. IN VIEW OF THE ABOVE AND FOLLOWING THE ITAT ORDER FOR 2004-05 IN ASSESSES OW N CASE WE DELETE THE ALTERNATE RETENTION OF ADDITION ON PROTECTIVE BASIS . THEREFORE GROUND NO.4 IN BOTH THE YEARS IS ALLOWED. 71. GROUND NO.5 IN A.Y. 2007-08 RELATES TO ADDITION OF RS. 7 29 0000/- CONFIRMED BY LD CIT(A) ON ACCOUNT OF EXCESS CASH FO UND AT THE TIME OF SEARCH. THE ASSESSEE HAD SUBMITTED HIS EXPLANATION VIDE LET TER DATED 14.1.2009 ALONG WITH CASH FLOW STATEMENT PLACED AT PAPER BOOK PAGE 261. THE ASSESSING OFFICER HAS MADE THE ADDITION BY REJECTING THE OPENING BALA NCE OF CASH IN THE CASH FLOW STATEMENT AND ALSO ESTIMATED RS. 1 50 000/- PE R MONTH AS HOUSEHOLD EXPENSES AGAINST RS. 75 000/- PER MONTH CLAIMED BY T HE ASSESSEE. THE LD AR HAS ARGUED THAT WITHOUT CONSIDERING OPENING BALANCE AND ARBITRARILY ESTIMATING HOUSEHOLD EXPENSES THE LD CIT(A)S ACTION IN CONFIR MING THE ACTION OF ITA NO2237 3718 3431&4641DEL/13 47 ASSESSING OFFICER IS NOT JUSTIFIED. IT IS PLEADED T HAT ASSESSEE HAS EXPLAINED THE CASH FLOW ALONG WITH OPENING BALANCE BEFORE AO WHO HAS NOT CONSIDERED THE SAME. AFTER HEARING THE PARTIES WE ARE OF THE VIEW THAT INTEREST OF JUSTICE WILL BE SERVED IF THIS ISSUE IS SETASIDE TO AO WITH A DI RECTION TO CONSIDER THE CASH FLOW STATEMENT AND EXPLANATION OF THE ASSESSEE AND R EADJUDICATE THIS ISSUE AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEAR D REGARDING OPENING BALANCE OF CASH AND REGARDING JUSTIFICATION OF DRAWINGS. TH EREFORE GROUND NO.5 IS ALLOWED FOR STATISTICAL PURPOSE. 73. GROUND NO.6 IN A.Y. 2007-08 RELATES TO ADDITION OF RS. 28 47 533/- QUA INVESTMENT IN RENOVATION OF SONALI FARMS FROM APPELL ANT OVERSEAS BANK ACCOUNT. THE ADDITION WAS MADE HOLDING THE ASSESSEE AS A RESIDENT IN INDIA. THE FACT THAT INVESTMENT IN SONALI FARMS WAS MADE FR OM OVERSEAS BANK ACCOUNT EMERGES FROM THE RELEVANT FINDINGS OF LD CI T(A). WE HAVE HELD THE ASSESSEE TO BE A NON RESIDENT CONSEQUENTLY ANY AMOU NT IS NOT TAXABLE IN INDIA UNLESS IT IS DEEMED TO HAVE BEEN RECEIVED OR ACCRUE S OR ARISES OR DEEMED TO HAVE ARISEN TO ASSESSEE IN INDIA. WE FIND THAT SIMI LAR ADDITION WAS MADE IN A.Y. 2006-07 AND TRIBUNAL VIDE ITS ORDER DATED 21.2.2014 HAS SET ASIDE THE ISSUE TO THE OFFICE OF ASSESSING OFFICER VIDE PARA 21.2 AT P AGE 88 OF THE SAID ORDER. THE ISSUE WAS SET ASIDE TO ARRIVE AT UNEXPLAINED EXPENDI TURE IN THE CONSTRUCTION OF SONALI FARMS IF ANY. SINCE THE ISSUE IS COMING FROM T HE EARLIER YEAR RESPECTFULLY FOLLOWING THE EARLIER ORDER WE SET ASIDE THIS ISSUE TO THE OFFICE OF ASSESSING OFFICER FOR THE LIMITED PURPOSE OF VERIFICATION AS TO WHETH ER THE TOTAL AMOUNT SPENT ON SONALI FARMS EXCEEDED THE AMOUNT AS ESTIMATED BY THE VALUER AND IF ANY ADDIT ION IS POSSIBLE UNDER SECTION 69C. 73. IN VIEW OF THE ABOVE THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 74. GROUND NO.7 IS SIMILAR TO GROUND NO.6 WHEREBY T HE ADDITION OF RS . 5 10 57 115/- REPRESENTING DEPOSITS IN DEUTSCHE BAN K NEW DELHI HAS BEEN ITA NO2237 3718 3431&4641DEL/13 48 UPHELD TO BE HIS INCOME ON THE BASIS THAT ASSESSEE WAS A RESIDENT. THE DEPOSIT IN DEUTSCHE BANK NEW DELHI REPRESENT MONEY TRANSFER RED FROM DEUTSCHE BANK SINGAPORE. THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF TRIBUNAL DATED 21.2.2014 WHEREIN SIMILAR ADDITION R EPRESENTING DEPOSITS IN DEUTSCHE BANK WERE DELETED ALLOWING THE GROUND TAKE N BY ASSESSEE. THE RELEVANT FINDINGS OF THE ITAT ARE REPRODUCED BELOW: - THIS ISSUE HAS BEEN COVERED BY THE DECISION OF THE HON'BLE HIGH COURT IN THE CASE OF THE APPELLANT WHERE THE DEPOSI TS IN THE SAME BANK ACCOUNT FOR THE ASSESSMENT YEAR 2001-02 2003- 04 WERE DELETED WITH THE FOLLOWING OBSERVATIONS:- WE ARE LEFT TO CONSIDER THE ADDITION OF RS.10 51 20 000/- MADE U/S 68 OF THE SAID ACT. INSOFAR AS THIS ADDITION IS CONCERNED THE 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 R ESIDENT AND THEREFORE THE SAID ADDITION HAS --------. 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 ` .10 51 20 000/- U/S 68 WOULD HAVE TO BE DELETED BECAUSE IT WAS A TR ANSFER FROM THE RESPONDENT/ASSESSEES FOREIGN ACCOUNT TO THE DO MESTIC ACCOUNT. HENCE THE MATTER IS SQUARELY COVERED SINC E IT IS THE SAME BANK ACCOUNT WHICH HAS ALREADY BEEN CONSIDERED AND ADJUDICATED UPON BY THE HON'BLE HIGH COURT. 75. IN THESE TWO YEARS WE HAVE ALREADY HELD THE ASS ESSEE TO BE A NON RESIDENT FOR THE PURPOSE OF INCOME TAX. THEREFORE THIS GROUND IS SQUARELY COVERED IN FAVOR OF ASSESSEE. IN VIEW THEREOF THE A BOVE GROUND NO.7 IN A.Y. 2007-08 IS ALLOWED. ITA NO2237 3718 3431&4641DEL/13 49 76. GROUND NO.8 RELATES TO ADDITION ON ACCOUNT OF U N-EXPLAINED CASH FOUND OUT OF CASH FOUND DURING SEARCH ON 28.2.2007. SIMILA R GROUND WAS RAISED BY THE ASSESSEE VIDE GROUND NO.5 WHEREIN THE UNEXPLAINED CA SH WAS FOUND ON 10.10.2006. WE HAVE ALREADY SET ASIDE THE ISSUE TO THE ASSESSING OFFICER THE ISSUE BEING IS LIKE WISE SET ASIDE. THEREFORE GROU ND NO.8 IN A.Y. 2007-08 IS ALLOWED FOR STATISTICAL PURPOSES. 77. VIDE GROUND NO.9 IN A.Y.. 2007-08 AND GROUND N O.6 IN A.Y. 2008-09 THE ASSESSEE HAS PRAYED FOR AWARD OF SUITABLE COST TO A SSESSEE. WE FIND THAT ASSESSING OFFICER AND LD CIT(A) ARE BOTH OFFICERS O F GOVT. OF INDIA AND WERE DISCHARGING THEIR DUTIES. THEY DO NOT HAVE ANY ROLE IN IMPOUNDING OF PASSPORT CONSEQUENTLY NO CAUSE OF ACTION REGARDING AWARDING OF COSTS ARISES CONSEQUENTLY GROUND NO.9 IN A.Y. 2007-0-8 AND GROUN D NO. 6 IN A.Y. 2008-09 ARE DISMISSED. 78. GROUND NO.5 IN ASSESSMENT YEAR 2008-09 RELATES TO ADDITION OF RS. 8 45 280/- (10000 GBP) ON THE GROUND THAT SAME REPR ESENTS FOREIGN REMITTANCE TAXABLE IN INDIA. WE HAVE HELD THE ASSESSEE AS NON R ESIDENT FOR THE PURPOSE OF INCOME TAX THEREFORE THE REMITTANCE FROM ABROAD ARE TAXABLE IN INDIA ONLY IF THEY REPRESENT INCOME ACCRUED OR DEEMED TO HAVE BEE N RECEIVED IN INDIA. THE ASSESSING OFFICER MADE THE ADDITION AS ASSESSEE COU LD NOT EXPLAIN THE SOURCE OF REMITTANCE INTO INDIA. THIS GROUND IS SIMILAR TO GR OUND NO.7 IN ASSESSMENT YEAR 2007-08 WHEREIN WE HAVE ALLOWED THE RELIEF TO ASSES SEE ON THE BASIS OF ITAT ORDER IN EARLIER YEAR BESIDES HOLDING HIM TO BE A N ON RESIDENT. HOWEVER CLEAR FACTS ARE NOT EMERGING FROM THE ASSESSMENT ORDER AN D LD CIT(A)S ORDER CONSEQUENTLY THIS GROUND IS SET ASIDE TO ASSESSING OFFICER TO EXAMINE THE TAXABILITY OF THIS AMOUNT KEEPING THE NRI STATUS IN MIND AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD. THEREFORE G ROUND NO.5 FOR AY 2008-09 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO2237 3718 3431&4641DEL/13 50 79. ADVERTING TO THE APPEALS FILED BY REVENUE IN TH ESE YEARS GROUND NO.1 IN BOTH THE YEARS AND GROUND NO.6 IN A.Y. 2007-08 & GR OUND NO.5 IN A.Y. 2008-09 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDI CATION. GROUND NO.2 IN BOTH YEARS IS REGARDING GRIEVANCE OF THE ASSESSEE WHEREI N LD CIT(A) DELETED THE ADDITION ON ACCOUNT OF INVESTMENT MADE BY UNIVERSAL BUSINESS SOLUTIONS IN THE CLARIDGES HOTELS LTD. WE FIND THAT LD CIT(A) HAS D EALT WITH THIS ISSUE VERY ELABORATELY AND AFTER RECORDING PROPER REASONS HAS RIGHTLY DELETED THE ADDITION. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE SAME . IN VIEW OF THE ABOVE REVENUES GROUND NO.2 IN BOTH YEARS IS DISMISSED. 80. GROUND NO.3 RELATES TO THE GRIEVANCE OF REVENUE REGARDING ADDITION MADE ON PROTECTIVE BASIS ONLY INSTEAD OF ON SUBSTAN TIVE BASIS. WE HAVE ALREADY DEALT WITH THIS ISSUE AND DECIDED IN FAVOR OF ASSES SEE. THEREFORE THIS GROUND IN BOTH YEARS IS DISMISSED. 81. GROUND NO.4 RELATES TO THE GRIEVANCE OF REVENUE WHEREBY LD CIT(A) HAD MADE THE ADDITION ON PROTECTIVE BASIS AND AT THE SA ME TIME ISSUED CERTAIN DIRECTIONS TO THE ASSESSING OFFICER. THE GRIEVANCE OF THE REVENUE REGARDING ADDITION ON PROTECTIVE BASIS HAS ALREADY BEEN DEALT IN ASSESSEES APPEAL AND WE HAVE ALLOWED THE RELIEF TO ASSESSEE. AS REGARDS DIR ECTIONS ISSUED BY LD CIT(A) WE HAVE ALREADY HELD THEM TO BE INCONSEQUENTIAL AND NOT AMOUNTING TO SET ASIDE PROCEEDINGS. THEREFORE THIS GROUND IN BOTH Y EARS IS DISMISSED. 82. GROUND NO.5 IN ASSESSMENT YEAR 2007-08 IS REGAR DING ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED JEWELLER Y. LD CIT(A) HAS RIGHTLY DELETED THIS ADDITION HOLDING THAT THE SAME ADDITIO N WAS MADE IN THE HANDS OF HIS WIFE WHICH LD CIT(A) IN APPEAL NO.423/2009-10 I N ASSESSMENT YEAR 2007-08 HAD DELETED THE SAME FINDING THE JEWELLERY AS EXPLAI NED. THEREFORE GROUND NO.5 IN ASSESSMENT YEAR 2007-08 IS DISMISSED. ITA NO2237 3718 3431&4641DEL/13 51 83. AS A RESULT THE APPEALS FILED BY THE ASSESSEE A RE PARTLY ALLOWED FOR STATISTICAL PURPOSES WHEREAS APPEALS FILED BY THE REVENUE ARE DISMISSED. 84. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DAY OF APRIL 2014. SD/- SD/- (R.P. TOLANI) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 11.04.2014. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DEL HI. TRUE COPY. BY ORDER (ITAT NEW DELHI). DATE OF HEARING DATE OF DICTATION DATE OF TYPING DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.