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TMI Blog2017 (10) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is entitled to exemption in respect of only the freight charges remitted to Singapore. In respect of USD in respect of which, there is no proof of remittance, it has to be brought to tax in India. We find that similar issue had arisen before the Hon'ble Gujarat High Court in the case of M.T. Maersk Mikage & 4 Petitioners vs. DIT (International Taxation) (2016 (9) TMI 19 - GUJARAT HIGH COURT). The AO is therefore, directed to tax only such part of the freight charges which have not been remitted to the assessee in Singapore. Assessee’s appeal is partly allowed. - ITA No.264/Hyd/2017 - - - Dated:- 29-9-2017 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For The Assessee : Shri R. Sreenivasan For The Revenue : Shri L. Ramji Rao, DR ORDER Per Smt. P. Madhavi Devi, J.M. This is assessee s appeal for the A.Y 2014-15 against the order of the CIT (A)-10, Hyderabad, dated 06.09.2016. 2. Brief facts of the case are that the assessee is a nonresident company. M/s. GAC Shipping (India) Pvt. Ltd, Nellore filed an application for grant of no objection certificate on 20.2.2014 on behalf of the assessee in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A), the assessee filed the details of the remittance of US D 3,66,175 on 10.03.2014 and US D 50,192.36 on 26.06.2014. This proof was submitted as additional evidence before the CIT (A). The CIT (A) called for a remand report from the AO and the AO has submitted his remand report. After calling for assessee s objections to the remand report, the CIT (A) held that he is not admitting the additional evidence. Thereafter he proceeded to confirm the assessment order. Aggrieved by the same, the assessee is in second appeal before us. 5. The learned Counsel for the assessee submitted that the assessee has initially filed evidence of remittance of USD 3,66,175 only to the assessee in Singapore before the AO and the AO has confirmed the addition only to the extent of the balance of the amount in respect of which no evidence was filed. He submitted that the evidence of remitting the balance to the extent of USD 3,38,246 was furnished before the CIT (A) and the AO in the remand report has accepted that the additional evidence in the form of remittance to the extent of USD 7,05,421 qualifies for relief under Article 24 r.w. Article 8 of the DTAA between India Singapore. Therefore, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttance, it has to be brought to tax in India. We find that similar issue had arisen before the Hon'ble Gujarat High Court in the case of M.T. Maersk Mikage 4.. Petitioners vs. DIT (International Taxation) reported in 291 CTR 184 (Guj.), wherein the Hon'ble High Court has held as under: 15. This brings us to the core issue strenuously debated by both sides viz. that of applicability of Article 8 vis-a-vis Article 24 of DTAA. We may quickly refresh the facts. ST Shipping is a company based in Singapore. Through the shipping business carried out at Indian ports, ST Shipping earned income, on which, it claims immunity from Indian income tax. The Revenue contends that the remittance of such accrued income not having taken place at Singapore, Article 24 will apply and consequently Article 8 providing for avoidance of table taxation would not apply. 16. The fact, that the income in question which arises out of shipping operations by virtue of Clause- 1 of Article 8of the DTAA would be taxable :- 5 -: M/s. Far Shipping (Singapore) Pte. Ltd., Rep. by M/s. Samsara Shipping (P) Ltd., only in Singapore, is not in serious dispute. The moot question therefore is whether op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance. This certificate was before the Commissioner while he passed the impugned order. The contents of this certificate were not doubted. If that be so, what emerges from the record is that the income in question would be assessable to tax at Singapore on the basis of accrual and not remittance. This would knock out the very basis of the Assessing Officer and Commissioner for invoking clause-1 of Article 24 of DTAA. Both the authorities considered the question of remittance of income as the sole requirement for invoking Article 24.1 of DTAA an interpretation which according to us does not flow from the language used. As noted the essence of Article 24.1 is that in case certain income is taxed by a contracting State not on the basis of accrual, but on :- 6 -: M/s. Far Shipping (Singapore) Pte. Ltd., Rep. by M/s. Samsara Shipping (P) Ltd., the basis of remittance, applicability of Article 8 would be ousted to the extent such income is not remitted. This clause does not provide that in every case of non-remittance of income to the contracting state, Article 8 would not apply irrespective of tax treatment such income is given. When in the present case, we hold that the income in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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