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TMI Blog2017 (10) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... same and accordingly this issue is the decided the appeal against the Revenue. - ITA Nos. 2603/M/2014, 2604/M/2014, 2605/M/2014, 3327/M/2014 And 7524/M/2014 - - - Dated:- 11-9-2017 - SHRI R. C. SHARMA, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER For The Appellant : Shri Girish Dave For The Respondent : Shri Rajguru M.V. Sr. DR ORDER PER: AMARJIT SINGH: JM The above mentioned appeals have been filed by the Assessee against the order dated 29.11.2013 for the AYs. 2005-06,2006-07, 2007-08 and against the order dated 05.02.2014 for the assessment year 2010-11 and against the order dated 19.09.2014 for the assessment year 2011-12 passed by the CIT(A)-30 Mumbai [hereinafter referred to as CIT(A) ]. ITA. NO. 2603/M/2014 2. The Assessee has filed the present appeal against the order dated 29.11.2013 passed by the Commissioner of Income Tax (Appeals)-30, Mumbai relevant to the AY. 2005-06. The Assessee has raised the following grounds:- 1. The order passed by learned CIT(A) upholding addition of ₹ 3,34,17,555 made by the Assessing Officer ('AO') as against Nil income returned by the appellant is erroneous, contrary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation 1(a) of Section 9(1)(i) of the Act. 7. The Ld. Assessing Officer / CIT(A) erred in law and on facts in levying interest under section 234B, 234C and 234D of the Act. 3. The brief facts of the case, are that the Principal Company Dockendale Shipping Co. Ltd. is a company based in Nassua, Bahamas and it is in the business of ship management. The Assessee has an office in the India which is termed as liaison office. The Assessee did not file the returns of income on the ground of that the activity of the liaison office neither generate any income nor can be said to be business connection in India of the Assessee. On 31.01.2006 a survey u/s 133A of the I.T. Act, 1961 was carried out and it was revealed that said liaison office was carrying out activities which amounted to being permanent establishment/business connection in India. Accordingly, notice u/s 148 of the I.T. Act, 1961,was issued and served on the Assessee. In response, to this notice, the Assessee filed its return of income and raised the question about the issue of notice. The Assessee was asked to state why the activities liaison office should not be constituted as PE (Permanent Establishment) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n are not liable to be sustainable in the eyes of law specifically in view of the law settled in K.S.S Petron Pvt. Ltd.Vs. The Assistance Commissioner of Income Tax Circle-2 in ITA No. 224/M/2014. . It is also argued, that the Assessing Officer nowhere shown any income earned by the Assessee but assessed the income on the basis of the income of another company namely, M/s Freedom Company Ltd. which was doing the consistently business accordingly and illegal. Therefore, the order u/s 148 is not liable to be sustainable in the eyes of law On the other hand, the Ld. Representative of the department has strongly relied upon the order passed by the CIT(A) in question. We noticed that the Assessee company is Dockendale Shipping Company Ltd. was incorporated in Nassau, Bahamas June, 1973. The Liaison office was set up in India in the year 1995 of sufficient chance after due taken the permission on the RBI, which lies at page 10,11 12 of the paper book. It is not in dispute that the Assessee office was only doing the work of liaison in the nature of supplying man-power to vessels managed by the DSCL(Dockendale Shipping Company Ltd.) and also to provide in house training to the said man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckendale Shipping Company Limited. 2nd Floor, Bitoo Building, P.O. Box No. 10455 Bank Lane, Nassau, Bahamas. Dear Sirs, Permission under Section 29(1) (a) of the Foreign Exchange Regulation Act, 1973 For opening a liaison office in India -------------------------------------------------- Please refer to your application dated 4th April 1995 and the subsequent of respondence rooting with your letter dated 2. We advise that we are agreeable to your establishment a liaison office at Bombay initially for a period of three years for the purpose of undertaking solely liaison activities viz. to recruit Indian crews for ships managed by your company. Please noted that this permission has been granted subject to the following conditions.: ( i) Except the proposed liaison work, the office in India will not under take any other activity of a trading, commercial or industrial nature nor shall it enter into any business contracts in its own name without our prior permission. ( ii) No commission fees will be charged or any other remuneration received/income earned by the office in India for the liaison activities/services re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay as regularizing, condoning or in any manner validating any irregularities, contraventions or other lapses if any under the provisions of any other law for the time being in force. 5. Please not to furnish to us the postal address of your liaison office in due course for our record. You may please note to address the correspondence in future to our Bombay Regional Office. . 5. According to the said permission the Assessee company was only authorized to recruit the Indian crew for ships managed by the Assessee company. However, certain work has specifically denied by the RBI which has been mentioned above at para no. 1 to 8 of the letter. The Assessing Officer has reached at the conclusion that the Assessee company has established the permanent establishment and the office of the Assessee was attribution of the income to the Assessee company. However, it is strange that no business of any kind has been shown by the Assessing Officer and no income of the Assessee of any kind was shown in the assessment order. The Assessing Officer Pick the income of another company M/s Freedom Company shipping Ltd. which was receipt consultation of the fees at the rate of US$2000 per sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /M/2014 KSS Petron Pvt, Ltd. Vs. ACIT Circle-10-Mumbai, we are of the view that notice u/s 147/148 is not liable to be sustainable in the eye of law, therefore, we set aside the same and accordingly this issue is the decided the appeal against the Revenue. ISSUE NO.1,3 8 6. Since, while deciding the legal issue of the notice u/s 147/148 has been order of the set aside, therefore, there is no need to decide the other issues on the factual ground it was same would be academic in nature. ITA NO.2604/M/2014, ITA NO.2605/M/2014, ITA NO.3324/M/2014 ITA NO.7524/M/2014 7. In all the above mentioned appeals the facts are similar but the figure is different. The assessment orders were passed on the basis of this survey u/s 133A of the I.T. Act, 1961, dated 31.01.2006 vide with in notices u/s 147/148 were issued in ITA No. 2603/M/2014. Therefore, the finding in the said appeal is quite applicable to these appeals also and accordingly, notice u/s 147/148 is also to be set aside and the legal issue has been decided in favour of the Assessee against the Revenue. In brief, the appeal of the Assessee are hereby ordered to be allowed. 8. In the result, appeal f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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