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TMI Blog2014 (1) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 172 of the Act - This is evident from the "charter party" agreement, which clearly show that even the so called charterer was also entitled for only commission – Decided against assessee. - IT Appeal No. 424 of 2012 - - - Dated:- 17-9-2013 - DILIP B. BHOSALE AND B. MANOHAR, JJ. For the Appellant : Smt. Gayathri Sridharan, Lakshmi Kumaran and Sridharan. For the Respondent : K.V. Aravind. ORDER:- PER : Dilip B. Bhansali This appeal is directed against the order dated 12.07.2012 passed by the Income Tax Appellate Tribunal, Bangalore Bench-'B' (for short 'the Tribunal') in ITA No. 184/Bang/2011, whereby the appeal has been dismissed. Appeal before the Tribunal was directed against the order of the CIT(A)-IV, Bangalo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The notice was replied by the Assessee and it was reaffirmed that the charterer was the beneficiary of the freight. The Income Tax Authorities did not accept the reply and held that the treaty with the Netherland cannot be applied, unless the owner of ship, was beneficiary and not the charterer. It is in this backdrop, the question that falls for consideration was, whether the charterer is the beneficiary of the freight or the owner of the ship and that on whose behalf the Assessee was acting as an agent? 4. Having considered the entire materials placed on record, in particular, the agreement called "charter party", all the three Authorities held that the owner of ship was the beneficiary of freight. 5. In the present appeal, the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below failed to take note of clause 13 of the charter party wherein it was clearly stipulated that the charterer has to pay a minimum freight for 19500 tonnes regardless of the load and the owner of the Vessel were entitled for higher freight if the load exceeds the minimum tonnage, which is essentially like a dead rent and thus, the entire risk and reward of the ship belongs to the charterer and the owner is entitled for the fixed rent with an incremental rent if the vessel sails with a higher load. It was submitted that clause 13 of the charter party has not been taken note by the revenue authorities and clause 14 only talks about the time of payment wherein, they used the word '100% freight'. It was submitted that this is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of, which finds place in paragraph 9.2 of the order. Paragraph 9.2 of the order reads thus: "Clause 13 stipulates minimum freight is to be paid to the owner of the ship (the Iranian party) at the rate of 46 Euros of minimum of 19500 tonnes. Clause 13 further stipulates if the tonnage exceeding 19500 m. tonnes, the additional freight is to be calculated depending upon the intake of the cargo. Thus, the owner of the ship (Iran entity) is not only entitled to freight of a minimum m.tonnes of 19,500 but also an addition freight depending an intake of the cargo. Therefore, the risk and liabilities undertaken by the charterer M/s. Puyvast is only in the event of the tonnage being less than 19500 tonnes. Rising of the invoice by the charter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of any transactions, does not deal directly with or on behalf of a non-resident principal bur deals with or through a non-resident broker shall not be deemed to be an agent under this section in respect of such transactions, if the following conditions are fulfilled, namely: (i) the transactions are carried on in the ordinary course of business through the first mentioned broker; and (ii) the non-resident broker is carrying on such transactions in the ordinary course of his business and not as a principal. (2) No person shall be treated as the agent of a non-resident unless he has had an opportunity of being heard by the Assessing Officer as to his liability to be treated as such". 10. This Section, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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