DR. RAJNIKANT RULES BHATT Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an application under Section 245Q of the Income -tax Act, 1961 ("the Act"), from a resident of Abu Dhabi seeking to know whether the income derived by him by way of interest, dividends and capital gains in India will be entitled to tax concessions in his hands by virtue of the Agreement for Avoidance of Double Taxation (DTAAJ between India and the United Arab Emirates (U. A. E.). It is interesting to notice that each of the several applications, the authority has received on this issue from residents of U. A. E. has some special distinguishing features which need to be dealt with separately, though the broad questions posed before the authority are the same.

(2.) THE applicant, Dr. Rajnikant R. Bhatt, originally filed an application under Section 245Q. on January 19, 1996, but this application was signed not by him but by his wife. It was, therefore, defective. Thereafter, the applicant has rectified the position and filed a fresh application duly signed by him which has been received on July 5, 1996.

(3.) IT is stated by the applicant that he is a doctor specialising in radiology. He left India along with his family and went to the United Arab Emirates on January 2, 1977. He stayed there for about 11 years and returned to India on June 27, 1988. It is stated that his reasons for so doing were that proper educational facilities for his children were not available in the U. A. E. and the applicant was not willing to send his children to the United Kingdom for studies. However, he did not stay long in India and went back once again, this time alone, to the U. A. E. in May, 1991, and he has been staying there since then. He has been working as a radiologist in the Government hospital at Abu Dhabi drawing a monthly salary of 12,100 dirhams, equivalent to approximately Rs, 14 lakhs per annum. He has, during the past several years, invested substantial sums in shares and debentures of Indian companies, units of the Unit Trust of India (U. T. I.) and other mutual funds (M. F.), dividends and interest income wherefrom is to the tune of Rs. 5 lakhs per annum. His assets in India are of the value of Rs. 54 lakhs. At Abu Dhabi, he is residing in quarters allotted to him by his employer and does not (indeed, cannot) own any immovable property. His wealth in the U. A. E. comprises some assets valued at Rs. 9.50 lakhs and other assets valued at about 2,30,000 dirhams. His source of income at Abu Dhabi consists of his salary from Mafraq Hospital, the interest on fixed deposits with the Bank of Baroda at Abu Dhabi and profits on the sale of certain portfolio investments.