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Judgment
Balasubrahmanyan, J.—This reference from the Income Tax Appellate Tribunal is under the W.T. Act, 1957. The question relates to the
applicability to the assessee, who figures in this case, of a concessional rate of tax provided for under r. 3 of Pt. II of Sch. I to the Act. This rule
provides for the cutting down of the wealth-tax rates by one-half, in a case where the assessee is an individual who is not a citizen of India and who
is also not a resident of India. It is not in dispute that the assessee in this case is not a citizen of India. So far as the degree of the assessee''s
residence is concerned, there again we do not have any controversy that he is a person ""not ordinarily resident in India"". The question is whether r.
3, in the circumstances, would apply to the assessee''s case.
The Tribunal said that the assessee would not come within r. 3 because he does not answer the description of an individual who is not a resident
in India. We agree with this view.
The W.T. Act is familiar with three degrees of residence as applicable to an individual. All of them are mutually exclusive. They are - (1) the
status of a person who is a resident in India; (2) the status of a person who is not a resident in India; and (3) the status of a person who is not
ordinarily resident in India. Since the assessee in this case belongs to the category of a ""not ordinarily resident"" individual, it means he cannot come
under either category (1) or category (2). It follows, therefore, he cannot claim a concessional rate of taxation under r. 3, as if he is a person not
resident in India.
The text of the question of law is as under :
Weather, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the concession provided
under rule 3 of Part II of Schedule I to the Wealth-tax Act, 1957, was not applicable to the assessee''s case ?
For the reasons mentioned earlier, the question is answered against the assessee and in favour of the Department. The Department will have its
costs. Costs one set. The counsel''s fee is fixed at Rs. 500 (rupees five hundred only).