9911796707
TMI Blog2014 (1) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... any conclusion – The decision of Deputy Director of Income tax (International Taxation) v Thoresen Chartering Singapore (Pte) Ltd. [2008 (6) TMI 227 - ITAT BOMBAY-L] followed – order of the CIT(A) set aside and the matter restored to AO for fresh consideration – Decided in favour of Revenue. - ITA No.6343 & 6344/Mum/2007 - - - Dated:- 25-4-2012 - B.R.MITTAL AND J.SUDHAKAR REDDY, JJ. For the Appellant : Shri R.Muralidhar For the Respondent : Revenue by: Shri Jitendra Yadav PER BENCH : The department has filed these two appeals for the assessment years 2003-04 2004-05, respectively against orders of ld CIT(A)-XXXIII, Mumbai both dated 16.7.2007 on the following common grounds: 1. On the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal No.2, the relevant facts are that assessee is a resident of Netherlands within the meaning of Article 4 of the Indo-Netherlands Treaty. In the relevant assessment years under consideration, assessee was engaged only in the business of providing containers to the exporters from India. The assessee s activities in India are carried on through PatVolk Division of Forbes Gokak Ltd (Forbes), which is acting as an agent in India for a number of Principals. During the course of assessment proceedings, assessee claimed that it was engaged in operation of ships in international traffic and in the course of their business, they undertook to ship cargo belonging to Indian Exporters to the foreign destination of the exporter and the freight charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay tax in India. In this respect, ld CIT(A) has considered his predecessor s order for assessment year 2002-03 and the relevant paras 4.6 of the said order has been stated in para 4.2. of the impugned order as under: Further, I agree with the appellant s contention that the income from Indian operations cannot be brought to tax by virtue of provisions of Article 7 of the treaty since they do not have a permanent establishment (PE) in India within the meaning of Article 5 of the AADT between India- Netherlands. I find merits in the appellants contention that the agent through which the appellant is carrying on business in India is an agent of independent nature, therefore, it cannot be held that PE of the appellant in India. The I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the rival submissions and perused the record of the case. There is no dispute regarding applicability of DTAA because the assessee s management and control was in Netherlands. First of all, we have to consider whether Article 8A is applicable to the facts of the case or not. This Article reads as under:- 1. Profits from the operation of ships in international traffic shall be taxable only in the state in which the place of effective management of the enterprise is situated. 2 . 3 . 4. For the purposes of this Article: a) b) profits from the operation of ships include: i) profits derived from the use, maintenance or rental of containers(including traile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttributable to that permanent establishment. There cannot be any dispute that the assessee has business connection in India but whether there was PE in India or not is to be found out in order to decide the applicability of Article 7 of DTAA. Ld CIT (A) has held that since the assessee was operating through agent of independent status, therefore, in view of Article 5(6), it can not be said that the assessee was having PE in India. However, the department s contention is that the assessee was maintaining the containers in India for being provided to the customers, and, therefore, the assessee had fixed place of business in India and hence, the profits attributable to PE were required to be taxed in India. 11. Ld Sr. Counsel objects t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to PE, and, therefore, same can be considered with reference to the ground taken by the department. However, in order to have a complete holistic view, it is necessary that all the relevant Articles dealing with this issue are considered by the lower authorities before arriving at any conclusion. We, therefore, following the reasoning given in the case of Deputy Director of Income tax (International Taxation) v Thoresen Chartering Singapore (Pte) Ltd.,(118 ITD 410) (supra), restore the matter to the file of the AO to decide the matter afresh after giving adequate opportunity to the assessee. 10. Since the issue is identical to that of assessment year 2002-03 in assessee s own case (supra), respectfully following the decision of a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
