Are the receipts from outside sources of a resident, but not an ordinarily resident of India, taxable in India?

This case examines whether receipts from outside India by an individual who is not ordinarily resident in India are taxable in India. The assessee, a promoter of M/s. Lanco Infratech Limited, received significant funds from his NRI accounts held in Mauritius. While the assessee provided documentation for these inward remittances, the Assessing Officer sought further clarification on the source and nature of these funds.

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD ‘ A ‘ BENCH, HYDERABAD.

BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND
SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER
(Through Virtual Hearing)

ITA No.1679/Hyd/2017
(Asst. Year : 2013-14)

Asst. Commissioner of Income Tax,
Circle 16(1), Hyderabad. ….Appellant.

 Vs.

Shri Madhusudan Rao Lagadapati,
Lanco House, Plot No.4,
Software Units Layout, Madhapur,
Hyderabad. …..Respondent
PAN ABCPL 8904D

Appellant By : Shri Rajendra Kumar (D.R)
Respondent By : Shri P. Murali Mohan Rao.

Date of Hearing : 7.4.2021.
Date of Pronouncement : 09.06.2021.

O R D E R

Per Smt. P. Madhavi Devi, J.M. :

This is Revenue’s appeal filed for the Assessment Year 2013-14 against the order of the Commissioner of Income Tax (Appeals)-4, Hyderabad Dt.20.07.2017.

2. The brief facts of the case are that the assessee, an individual and one of the promoters and Chairman of M/s. Lanco Infratech Limited filed his Return of Income for the Assessment Year 2013-14 on 31.7.2013 admitting total income of Rs.3,42,66,780 (income from salary of Rs.3,37,87,481 and income from other sources of Rs.7,01,407). The Return of Income was processed u/s. 143(1) of the Act and subsequently the case was selected for scrutiny.

4. During the course of assessment u/s. 143(3) of the Act, the Assessing Officer observed that there were credits in assessee's Axis Bank A/c. No.836486982 totalling to Rs.17,78,15,615 deposited in US $. The assessee explained that the same were received form his NRI account maintained with Barclays Bank and Standard Bank Ltd., Mauritius duly complying with the guidelines of the Regulatory Authorities/RBI and the same was shown in his capital account for the year under consideration. The assessee also filed inward remittances certificate as evidence of receipt of money from his NRI Account. The Assessing Officer observed that in all such transactions, the purpose of receiving such inward remittances is stated as migrant transfer including person / non-resident deposits. It is also observed by the A.O. that though the assessee himself was the remitter of the funds into Standard Bank (Mauritius) Ltd., Port Louis MU, he has not furnished the copies of Bank accounts held with these banks and that the assessee had only stated that he had made a term deposit of US $ 10,00,000 during the F.Y. 2011-12. 

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