Day of arrival to be excluded while counting days of stay in India for the purpose of residential status: ITAT

Case details: Pradeep Kumar Joshi v. ITO - [2021] 133 taxmann.com 283 (Ahmedabad - Trib.)

Judiciary and Counsel Details

• • Waseem Ahmed, Accountant Member, and MS. Madhumita Roy, Judicial Member 
  • Divyang Shah, AR for the Appellant. 
  • Purushottam Kumar, Sr. DR for the Respondent.

Facts of the Case

Assessee was a non-resident Indian and showed income from other sources being interest from REC Bonds and savings bank interest. He has also shown dividend income and salary earned from Oil Support Services, Dammam (outside India), interest on NRE FDR and LTCG, which were claimed as exempt from income tax.

However, On verifying the passport, the Assessing Officer (AO) contended that the assessee was resident in India, and thus, he was liable to pay tax on his entire income. Assessee contended that AO had considered both the date of arrival and date of departure from India, as stayed in India, which wasn’t correct. Only the departure date should be considered “stay in India”. However, AO rejected the assessee’s contentions. On appeal, the CIT(A) also upheld the order of AO. The assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that it had already been held by different court benches that while counting days of stay in India for considering the status of “Resident”, the days of arrival have to be excluded.

The Bangalore Tribunal, in the case of Manoj Kumar Reddy [2009] 34 SOT 180 (Bangalore), has held that as per the General Clauses Act, the first day in a series of a day is to be excluded if the word from is used. Since for computation of the period, one has to necessarily import the word ‘from’ and, accordingly, the First day is to be excluded.

Further, in the case of Fausta C. Cordeiro [2012] 24 taxmann.com 193 (Mum.), the Mumbai Tribunal has ruled that while deciding non-resident status, the day of arrival in India is to be excluded if it is not a complete day.

Following these rulings, it was held by the Tribunal that the date of arrival was to be excluded in counting the days of stay in India of the assessee for the purpose of section 6.

Case Review

• • Manoj Kumar Reddy v. ITO (International Taxation) [2009] 34 SOT 180 (para 10) followed.

List of Cases Referred to

• • Petition No. 7 of 1995, In re [1997] 90 Taxman 62/223 ITR 462 (AAR – New Delhi) (para 4),
  • ITO (IT) v. Faustac Cordeiro [2012] 24 taxmann.com 193/53 SOT 522 (Mum. – Trib) (para 6)
  • Manoj Kumar Reddy v. ITO (International Taxation) [2009] 34 SOT 180 (Bang.) (para 7).