Receipt from Fortis Mutual Fund being Investment made from NRE Account of Non-Resident Indian Not Taxable in India: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) recently held that receipt from fortis mutual fund being investment made from Non Resident External account of Non –Resident Indian not taxable in India.

Assesee Vijaykumar Vasantbhai Patel,was a Non resident Indian, filed his original Return of Income on 29.09.2009 declaring nil income .After the regular assessment completed in the year 2011 the assessing officer came to know that assessee had made investment  in Fortis Mutual Fund and it was not mentioned the assessees in the assessment  proceedings. Assessing officer confirmed the investment made by the assessee from the Principal Manager, BNP Paribas Mutual Fund and found that assessee made an amount of Rs. 23.06 crores.Assessing officer seeking reply from the assessee but did not get any reply from the assessee.Therefore assessing officer treated the amount of Rs. 23.06 crores as unexplained investment under section 69 of the Income Tax Act 1961 and added as the assessee’s income. Against this order the assessee filed an appeal before CIT(Appeals).

Section 69 of the Income Tax Act 1961 provides that if any investment made by the taxpayer would not be recorded in the book of account and taxpayer could not explain the nature and source of that income in such a situation assessing officer investments may be deemed to be the income of the assessee of such a financial year.

Chetan Shah counsel for the assessee submit that when the investment made from NRE Account of the Non-Resident assessee, it was not taxable in India and the above funds was  sourced from outside India, therefore not taxable in India.

After considering the submission CIT (Appeals) allow the appeal filed by the Assessee. Against the order of CIT (Appeals) revenue filed the appeal before ITAT.

 After considering the contentions of the both parties the division bench of the ITAT comprising Shri Waseem Ahmed, (Accountant Member) and Shri T.R. Senthil Kumar, (Judicial Member) dismiss the appeal of the revenue and observed that Assessee had proved he was a Non-Resident Indian who borrowed for loans from Standard Chartered Bank, Chennai NRE Account and also found that the fund is coming from outside India hence it was not taxable in India.

Support our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.