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2013 (9) TMI 3 - AT - Income TaxAppeal before ITAT - Person aggrieved - Taxability of import freight - profit derived from the operation of ships in international traffic - Whether any income has been assessed in the hands of the partnership firm - Exemption on account of income received in India from the operation of ships - Interpretation of assessee aggrieved - Held that - assessee aggrieved used in section 253(1) being a person competent to file an appeal before the Tribunal is the person who is an aggrieved party liable to pay tax in terms of the order against which the appeal is to be preferred. As already discussed by us there is no tax payable by the assessee in the present case as a result of the impugned order passed by the ld. CIT(A) even as a partner of the firm as the said order of the ld. CIT(A) has not given rise to any tax liability of the partnership firm - Decided against assessee.
Issues Involved:
1. Maintainability of the appeal filed by the assessee. 2. Taxability of income received in India from the operation of ships under the India-Netherlands DTAA. 3. Assessment of the partnership firm PONP under the Indian Income Tax Act. Issue-wise Detailed Analysis: 1. Maintainability of the Appeal: The primary issue raised by the respondent was the maintainability of the appeal filed by the assessee before the Tribunal. The respondent contended that the assessee could not be considered "aggrieved" by the order of the CIT(A) as the order had effectively granted full relief by holding the income from the partnership firm PONP to be exempt under section 10(2A) of the Indian Income Tax Act. The Tribunal agreed with this contention, noting that the CIT(A)'s order did not result in any tax liability for the assessee, either individually or as a partner of the firm, since the proceedings against the partnership firm were separate and had been stayed by the Hon'ble Calcutta High Court. Therefore, the Tribunal held that the appeal filed by the assessee was not maintainable under section 253(1) of the Act, which requires the appellant to be an "assessee aggrieved" by the order in question. 2. Taxability of Income under the India-Netherlands DTAA: The assessee, a company based in the Netherlands, claimed that its income from the operation of ships in international traffic was taxable only in the Netherlands under Article 8-A(2) of the India-Netherlands DTAA. The Assessing Officer (A.O.) disagreed, holding that the partnership firm PONP was not a tax resident of the UK and thus not eligible for treaty benefits. The CIT(A) upheld this view, stating that the UK partnership was not a "person" under the Indo-UK DTAA and thus could not avail treaty benefits. However, the CIT(A) also held that the share of income of the partners from the firm was exempt under section 10(2A) of the Act, as the partnership firm was taxable in India. 3. Assessment of the Partnership Firm PONP: The A.O. assessed the income from the operations in India in the hands of the assessee under section 172(2) of the Act, as the partnership firm PONP was considered fiscally transparent in the UK and not liable to tax there. The CIT(A) agreed with the A.O. that the partnership firm was a "person" under the Indian Income Tax Act and thus taxable in India. The CIT(A) held that the profits of PONP were taxable as the profits of a firm in India, and there was no provision to assess the income of the firm in the hands of the partners. However, the CIT(A) also noted that the share of income of the partners was exempt under section 10(2A) of the Act, and the A.O. should have allowed this exemption to the assessee. Conclusion: The Tribunal dismissed the appeal filed by the assessee on the grounds of maintainability, stating that the assessee was not an "assessee aggrieved" as required under section 253(1) of the Act. Consequently, the Tribunal did not delve into the merits of the issues raised in the appeal. The order pronounced in the open court on 3-7-2013 concluded that the appeal filed by the assessee was dismissed.
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