RAMBHAI L PATEL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The following question of law has been referred to us under Section 256 (2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") by the Income Tax Appellate Tribunal, Ahmedabad Bench `C', Ahmedabad, for the opinion of this Court.

(2.) The applicant-assessee is a Hindu Undivided Family and the status under the Act is "Resident, but not ordinarily Resident". The assessment years involved in this reference are 1977-78 and 1978-79 and the relevant accounting periods are financial years ended on 31.3.1977 and 31.3.1978 respectively.

(3.) The applicant-assessee opened an account with Central Bank of India which was a Fixed Deposit Account and the same was treated as "Non Resident (External) account" as per the provisions of Foreign Exchange Regulation Act, 1947. The status of the assessee under the Act was "Non Resident" when the aforesaid account was opened. For the two years under consideration the assessee earned interest of Rs.22,710.00 and Rs.52,629.00 respectively and the said interest was claimed to be exempt under the provisions of Section 10 (4A) of the Act.