An individual is a resident of the state in which he has center of vital interest: ITAT Mumbai
Ashok Kumar Pandey Versus ACIT (ITA No.3986/M/2023)
Facts:
1. The assessee is in India is more than 183 days. He is a Managing Director and has shareholding of more than 50% in an Indian company.
2. He has earned capital gains and l income from investments made in shares and trading in shares in both India and US. He has also earned rental income from house property in US and bank interest from bank deposits made in US.
3. The assessee submits that his Centre of Vital Interest lies in USA and, therefore, in terms of Article 4(2)(a) of the DTAA between Indian and USA, he is a resident of USA. Assessee explains that his family is U S National holding US Passport, he is Overseas Citizen [ OCI] , has larger investments in US , one daughter out of three children is studying in USA, therefore his center of vital interest is in USA.
4. The AO has maintained that the assessee has a permanent home in India as well as in USA. His personal and economic relation and its closeness (center of vital interest). So he would be assessed as an assessee resident in India.
ITAT Mumbai held as below:
1. The assessee is staying in India for the current year for more than 183 days and therefore according to the domestic law, he is considered to be the resident of India.
2. The assessee has an active involvement in a running of a company and conducting business activities in India. He is deriving rental income, dividend income in USA. Thus, he does not have any active involvement in USA for earning wages, remuneration, profit.
3. Therefore, on comprehensive appraisal of the personal relationship and economic relationship of the assessee, tilt more in favour of being close to India then US.
4. Accordingly, we hold that the assessee is a resident of India in terms of Article 4(2)(a) of the Indo- US – DTAA as a resident of USA.
Note: According to article 4 (2) (a) of the DTAA, an individual is resident of the state in which he has center of vital interest ie where his personal and economic relations are closer.
The copy of the order is as under: