2023 (10) TMI 977 - AT - Income Tax

Reopening of assessment - Taxability of Vessel handling charges in India - HELD THAT - The undisputed position that emerges is that the assessee assailed the final assessment order for AYs 2012-13, 2013-14, 2016-17 2017- 18 before this Tribunal wherein the appeals have been allowed by the Tribunal on legal grounds as well as on merits vide 2023 (5) TMI 1207 - ITAT CHENNAI Reassessment proceedings as well as consequential assessment framed therein are unsustainable in law and accordingly, liable to be quashed. The issue, on merits, as finally been held that the assessee would be entitled for the benefit of Article-8 of the treaty and the impugned charges would not be taxable in India in the hands of the assessee. Therefore, facts and circumstances being the same, taking the same view, we allow the legal grounds as well as grounds on merits.

Summary

Issues involved:
The appeal challenges the final assessment order for Assessment Year (AY) 2015-16, based on reassessment proceedings, focusing on the legal ground of income escapement and applicability of India-Singapore DTAA. The issue was previously addressed for AYs 2012-13, 2013-14, 2016-17 & 2017-18 by the Tribunal.

Assessment Proceedings and Legal Grounds:
The appeal by the assessee pertains to AY 2015-16, arising from the final assessment order passed by the Assessing Officer under relevant sections of the Act. The assessee contested the reassessment proceedings, arguing that there was no income escapement as the income was already taxed by the Indian entity. The assessee relied on Article-8 of India-Singapore DTAA. The Dispute Resolution Panel had rejected the assessee's objections based on earlier orders for different assessment years.

Tribunal's Decision and Legal Grounds:
The Tribunal noted that the assessee previously challenged final assessment orders for other years, which were allowed by the Tribunal on legal and merit grounds. The current issue was found to be in favor of the assessee based on the earlier Tribunal decisions. The reassessment proceedings and consequential assessment were deemed unsustainable in law and were ordered to be quashed. The Tribunal held that the assessee was entitled to the benefit of Article-8 of the treaty, making the impugned charges non-taxable in India. The appeal was allowed, rendering the stay application moot, and the Assessing Officer was directed to recalculate the assessee's income and taxes accordingly.

Conclusion:
The Tribunal allowed the appeal for AY 2015-16, dismissing the stay application as moot. The decision was based on the legal grounds and merits favoring the assessee, in line with the previous Tribunal rulings. The order was pronounced on 17th October 2023.