Section 10(4) of Income Tax Act, 1961— The issue contested in this appeal is whether the interest income from NRE account of the assessee is taxable in India or exempt u/s 10(4)(ii) as claimed by the assessee. The assessee had an NRE account in Canara Bank in India. Although the assessee was non-resident earlier, he became a 'Resident and Ordinarily Resident' in the relevant previous year 2014-15. On the interest income earned from NRE FD account of Rs. 1.10 crore, the assessee claimed exemption u/s 10 (4)(ii) in the return of income. The AO rejected the assessee's claim of exemption and brought to tax and the CIT(A) upheld it.

Held that—Since the assessee has come and stays in India during the financial year 2014-15 for 283 days, his residential status under FEMA is a ‘person resident in India’ only. Therefore, the assessee is not entitled for the deduction U/s.10(4)(ii). The assessee has also not placed any material to dislodge the findings recorded by the ld.CIT(A), before us, i.e., to prove that he is a Resident outside India in the relevant previous year 2014-15 within the scope of the FEMA as well as for income tax purpose, therefore we do not find any reason to interfere with the order of the ld.CIT(A) and hence the assessee’s corresponding appeal grounds are dismissed.[SHRI BABA SHANKAR RAJESH VERSUS THE ACIT] [2019] 18 ITCD Online (1) [ ITAT CHENNAI]