R.V. Easwar, Vice President: only ground taken by Revenue in this appeal is that CIT(A) erred in holding that residential status of assessee has to be taken as "not ordinarily resident" as against status of "resident and ordinarily resident" adopted by AO. 2 . appeal arises this way. assessee is individual. He is consultant for pharmaceuticals formulations. He filed return for assessment year under consideration declaring income of Rs. 7,77,000. In return, assessee claimed that status was that of resident. In respect of interest income of Rs. 3,07,328, he claimed exemption under s. 10( 15 )(fa) of IT Act. interest arose from fixed deposit in foreign currency. While completing assessment, AO rejected claim for exemption on following grounds : (a) assessee has claimed status of resident, whereas exemption is available only to assessee who is non-resident or "not ordinarily resident". (b) fixed deposit in bank was in Indian rupees and not in foreign currency. 3. assessee appealed to CIT(A) and claimed that status was "not ordinarily resident" and therefore he was entitled to exemption of interest. CIT(A) examined provisions of s. 10( 15 )(fa) and held that since deposits were not in foreign currency, exemption was not available. However, as regards status claimed, he agreed with assessee that he was "not ordinarily resident" and held that exemption in respect of interest income cannot be denied on ground that assessee was resident. Ultimately, however, appeal was dismissed because deposits in bank, as already noted, did not fulfil conditions of section. 4 . In coming to conclusion, that assessee was "not ordinarily resident" CIT(A) observed that during financial years 1990-91 to 1999- 2000, assessee stayed in India as follows : F.Y Stay in India (days) 1990-91 365 1991-92 365 1992-93 365 1993-94 365 1994-95 297 1995-96 47 1996-97 1997-98 91 1998-99 333 1999-2000 353 Total : 2581 From above, CIT(A) held that as per s. 6(1)(a), assessee would not be resident in India for two financial years, namely, 1995-96 and 1996- 97. He therefore held that assessee was not resident in India in 9 out of 10 previous years preceding previous year relevant to assessment year in appeal and therefore according to s. 6(6)(a), he would be "not ordinarily resident". 5. Revenue is in appeal. Sec. 6(6)(a) of IT Act is as under : (6) person is said to be "not ordinarily resident" in India in any previous year if such person is : (a) individual who has not been resident in India in nine out of ten previous years preceding that year, or has not during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and thirty days or more; or (b) HUF whose manager has not been resident in India in nine out of ten previous years preceding that year, or has not during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and thirty days or more". 6. word "resident" in first part of this clause means resident within meaning of s. 6(1) while in second part of this clause words "has not during seven previous years preceding that year been in India" refer to physical presence of assessee in India. In order to claim status of being "not ordinarily resident" under first part of this clause resident in India for less than nine years out of preceding ten years is sufficient. In order to claim that status under second part of clause, requisite condition is that aggregate period of assessee s physical presence in India during seven years preceding relevant accounting year should not have exceeded 729 days. effect of two parts of clause read together is that individual is said to be "resident and ordinarily resident" only when both following conditions are fulfilled : (a) He has been resident in India in nine out of ten years preceding relevant previous year; and (b) He has during seven years preceding that year been in India for period of, or for periods aggregating to, at least 730 days. If either of these two conditions is not fulfilled, individual is said to be "not ordinarily resident". 7 . These principles were laid down in various decisions, namely, S. Marimuthu Pillai vs. CIT (1945) 13 ITR 186 (Mad), K.M.N.N. Swaminathan Chettiar vs. CIT (1947) 15 ITR 418 (Mad), P.B.I. Bava vs. CIT (1955) 27 ITR 463 (Cochin), and also by Authority for Advance Ruling AAR No. P5 of 1995, In re (1997) 223 ITR 379. No doubt, contrary view has been expressed by Gujarat High Court in Pradip J. Mehta vs. CIT (2002) 175 CTR (Guj) 394 : (2002) 256 ITR 647 (Guj). However, view propounded in other judgments cited above has held field for very long time commencing from Indian IT Act, 1922 and is also in conformity with speech of Finance Member in Central legislative Assembly while introducing relevant amendment Bill and has further been adopted by circular dt. 15 th Dec.,1962 by CBDT. circular is as under : "CIT, WB s Circular letter No. J/28320/4A/10/5/58-59, dt. 5th Dec., 1962, addressed to Secretary, Indian Chamber of Commerce, Calcutta-1 I am directed to refer to correspondence resting with Ministry of Finance (Department of Revenue) letter No. 4/22/61-IT(AT), dt. 25th Nov., 1961, and to state that Department s view has all along been that individual is "not ordinarily resident" unless he satisfied both conditions in s. 4B(a), i.e., (i) he must have been resident in nine out of ten preceding years; and (ii) he must have been in India for more than two years in preceding seven years. Thus, person will be "resident and ordinarily resident" if both these conditions are satisfied but he will be "resident but not ordinarily resident" if either of those conditions is not satisfied." 8. entire position has been summed up, recognising ambiguity in wording of section and possibility of more than one view, by Authority for Advance Ruling in decision cited supra and ultimately, Authority speaking through Hon ble Justice S. Ranganathan, has preferred settled view and we can do no better than to respectfully reproduce entire discussion : (pp. 384-385 of report) "Sec. 6(6) is somewhat ambiguous in its wording. It can be read either as definition of person who can be treated as "ordinarily resident" in India or as definition of person who should be treated as "resident but not ordinarily resident". ambiguity arises as result of use of double negative used in sub-section. two interpretations possible are : (1) individual is resident and ordinarily resident in any previous year only if : (a) He has been "resident" (as per s. 6(1)) in nine out of ten previous years preceding that year; and (b) He has been in India for period or periods amounting in all to 730 days or more during seven years preceding that year. (2) individual, though resident, is "not ordinarily resident" in any previous year : (a) Either where he has not been resident, i.e., has been non-resident in nine out of ten previous years preceding that previous year; (b) Or where he has not been in India (i.e., has been absent from India) for 730 days or more during seven previous years preceding that year. It will be seen that, if we apply first of above two interpretations, applicant will be resident but not ordinarily resident for asst. yrs. 1996-97 to 2004-05 as he will have been "resident" in eight and less number of preceding previous years although his physical stay in India would have exceeded 730 days by end of previous year relevant for asst. yr. 1998-99. However, if second of tests is applied he will be resident and ordinarily resident only for asst. yrs. 1996-97 and 1997-98. It is curious that this difficulty in interpretation of basic provision of Act has not been directly resolved even though IT legislation in this country is about to celebrate its platinum jubilee - provisions of s. 6(6) of Act having been re-enacted materially on same lines as s. 4B of Indian IT Act, 1922. first interpretation given above is in accordance with speech of Finance Member in Central legislative Assembly while introducing relevant amendment Bill, has been adopted by circular of CBDT dt. 5th Dec., 1962, and also seems to have been broadly accepted, although alternative view has been touched upon in some judicial dicta : See discussion in Kanga and Palkivala on "Law and Practice of IT (8th edition), pp. 247-248 and Sampath Iyengar s Law of IT (9th edition), pp. 869-872" and cases cited therein. It seems correct to construe definition as providing that person will become resident and ordinarily resident only if (a) he has been "resident" in nine out of ten preceding previous years, and (b) has been in India for at least 730 days in seven preceding previous years and that he will be treated as resident but not ordinarily resident if either of these conditions is not fulfilled. applicant is, therefore, right when he says that he will be having status of resident but not ordinarily resident for asst. yrs. 1996-97 to 2004-05. It is on this assumption that his questions have to be answered and answers are restricted to assessment years in respect of which he will be resident but not ordinarily resident mentioned above." 9. If we apply above legal position to facts of instant case, it will be seen that assessee was physically present in India for entire 365 days during previous year, namely, 1st April, 2000 to 31st March, 2001, having returned to India on 20th Feb., 2000 (para 3 of assessment order). So he is "resident" in India for that year. enquiry will then have to be made whether he is "resident and ordinarily resident" or "resident but not ordinarily resident" in India. This takes us to consideration of question whether he was resident in India nine out of ten previous years preceding relevant previous year. As per details given by CIT(A), assessee was not resident for previous years 1995-96 and 1996-97 and for other eight years he would be resident. He therefore does not fulfil condition that he should be resident in nine out of ten previous years, falling short by one year. Thus, first condition for being "resident and ordinarily resident" is not satisfied. As per legal position noted above, non-fulfilment of one of two conditions of s. 6(6)(a) is sufficient to bring assessee under category of "not ordinarily resident". Thus is what CIT(A) has held and we concur with him. 10. So far as other condition, namely, that assessee should have physically present in India for 730 days or more during seven years preceding relevant previous year, we find that this condition is satisfied. As per details given by CIT(A) seven years period will be Financial years 1993-94 to 1999-2000 and during these years assessee was physically present in India for period aggregating to 1486 days. However, since assessee has fulfilled only one of two conditions for being "resident and ordinarily resident", he becomes "resident but not ordinarily resident" within meaning of s. 6(6)(a) of IT. Act. 11. above section has been amended by Finance Act, 2003, w.e.f. 1st April, 2004 on lines of view expressed by Gujarat High Court in Pradip J. Mehta s case (supra). Department s circular No. 7 of 2003 which explains new section says that amendment was made in order to remove doubts about interpretation of section and that it is clarificatory in nature. Nevertheless, it has been made applicable only from 1st April, 2004. We do not see how amendment could be held to be clarificatory when interpretation of s. 6(6)(a) as accepted in ruling of AAR (supra) had held field right from its inception. In fact even under s. 4B(a) of Indian IT Act, 1922, as has been noticed by authority for advance ruling in decision cited (supra), same interpretation was accepted by Courts. Such interpretation of provision was in accordance with speech of Finance Member in Central Legislative Assembly while introducing relevant amendment Bill and had been adopted in circular dt. 5th Dec., 1962 issued by CBDT (as noticed by authority in above ruling). We are therefore unable to give effect to amendment retrospectively. 12. For above reasons, we uphold decision of CIT(A) regarding status of assessee and dismiss appeal filed by Revenue with no order as to costs. *** DEPUTY COMMISSIONER OF INCOME TAX v. KAPILA SINGLA