9911796707
TMI Blog2018 (6) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... e is stated to have carried out its business activities in India through its agent Parekh Marine Agencies Pvt. Ltd. For the impugned assessment year assessee filed its return of income on 27th September 2013, declaring total income of Rs. 9,52,43,663. During the assessment proceedings, the Assessing Officer noticing that the assessee has not offered to tax IHC, service tax in relation to IHC and feeder vessel charges, called upon the assessee to explain why it should not be brought to tax. In response, it was submitted by the assessee that these charges are not taxable as they are income forming part of the operation of ships in international traffic, hence, exempt under Article-9 of India-France Double Taxation Avoidance Agreement (DTAA). Further, it was submitted by the assessee that in the immediately preceding assessment year i.e., A.Y. 2012-13, the issues have been decided in its favour by the DRP. Though, the Assessing Officer agreed that in the immediately preceding assessment year the issues were decided in favour of the assessee by the DRP, however, stating that the Department has preferred appeal before the Tribunal and the dispute in the earlier year are sub judice in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be brought to tax under section 44B of the Act. Accordingly, they upheld the decision of the Assessing Officer. 6. The learned Authorised Representative submitted that the issue in dispute now stands decided in favour of the assessee in assessee's own case by virtue of order of the Tribunal in ITA no.6649/Mum./2017 and Ors., dated 14th March 2018. 7. Learned Authorised Representative taking us through the relevant observations of the Co-ordinate Bench submitted that the Tribunal specifically dealing with the reasoning of the DRP on the basis of which the addition was upheld in the impugned assessment year has held that the ratio laid down by the Hon'ble Jurisdictional High Court in Safmarine Containers Lines N.V.(supra) would squarely apply as IHC received by the assessee are incidental to and directly connected with operation of ships in international traffic. He submitted that the Tribunal while dealing with the aforesaid reasoning of the DRP has taken note of the fact that in case of DIT v/s A.P. Mooler Maersk A/S. involving India Denmark Tax Treaty, the Hon'ble Jurisdictional High Court has held that the principle laid down in Safmarine Containers Line N.V. (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h transportation" in Article-9 of India-France DTAA, it cannot be said that IHC is exempt under Article-9 of India-France DTAA. As could be seen from the impugned order of the DRP, on identical reasoning the DRP has held that IHC is taxable in India under section 44B of the Act. Notably, while deciding the Revenue's appeal against the order of the DRP in case of the present assessee as well as the appeals filed by the assessee and the Department in case of CMA CGM SA involving identical issue, the Tribunal after considering all aspects of the issue has held as under:- "15. We have heard rival contentions on this issue and perused the record. We notice that the ld DRP has mainly declined to follow its own order passed in AY 2012-13 in the subsequent two years for the reason that there is difference between Article 8 of India-Belgium DTAA and Article 9 of India France DTAA. According to Ld DRP that the India-Belgium DTAA contains specific provisions to include "any other activity directly connected with such transportation", whereas the same is absent in the India-France DTAA. The Ld A.R, on the contrary, submitted that the presence or absence of the above said provision will not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered by Hon'ble Bombay High Court in the context of India-Denmark DTAA clearly shows that the ancillary activities connected with the shipping business are also included in the shipping business. The above said decision has been followed by the co-ordinate bench in the case of same assessee, viz., A.P.Moller Maersk A/S (ITA No.1798/Mum/2015 dated 15-02-2017) for AY 2011-12 to hold that the Inland Haulage charges received by that assessee shall also form part of shipping income from international traffic. The decision so rendered for AY 2011-12 was followed by the coordinate bench in the above said assessee's case in AY 2012-13 in ITA No.1743/Mum/2016 dated 07-02-2018. 20. Before us, the ld A.R demonstrated that the Article 9 of India-France DTAA and Article 9 of India-Denmark DTAA are identically worded. Since the decision rendered by Hon'ble Bombay High Court in the case of Safmarine Containers Lines N.V (which was rendered in the context of India-Belgium DTAA) was held to be applicable to India-Denmark DTAA also by the Hon'ble Bombay High Court in the case of A.P.Moller Maersk A/S (ITA No.1306 of 2013), the ld A.R submitted that the absence of the expression "any other ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench of Hon'ble Uttarakhand has referred identical issue to a Larger Bench. The DRP observed, considering the fact that the provisions of section 44B and section 44BB of the Act are similar; the position of law on the issue has not attained finality. The DRP observed, since, the order of the DRP is not appealable by the Department, in order to protect the interest of Revenue they have to uphold the decision of the Assessing Officer in bringing the service tax collected to tax under section 44B of the Act along with the IHC. 13. Learned Authorised Representative submitted that this issue has also been decided in favour of the assessee by the Co-ordinate Bench while deciding assessee's appeal for assessment year 2012-13. 14. The learned Departmental Representative relied upon the decision of the DRP. 15. We have considered rival submissions and perused materials on record. The basic and fundamental reasoning on which the service tax collected by the assessee on IHC has been brought to tax under section 44B of the Act by the Departmental Authorities is, IHC is taxable under section 44B of the Act. However, it is noticed while deciding identical issue in assessee's own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Co-ordinate Bench, we hold that service tax collected on IHC is not taxable in India as per Article-9 of India-France DTAA. These grounds are allowed. 17. In grounds no.6 and 7, the assessee has challenged the decision of the Departmental Authorities in holding Parekh Marine Agencies Pvt. Ltd. as the agency Permanent Establishment (P.E) of the assessee in India. 18. We have considered rival submissions and perused materials on record. It is agreed before us that this issue becomes academic if grounds no.2 to 5 are decided in favour of the assessee. In view of the aforesaid, it is not necessary to dwell upon the issue any further. Suffice to say, in assessee's own case for assessment year 2010-11 in ITA no.6041/Mum./2014, dated 22nd March 2017, the Tribunal has held in the following manner:- "3.3.2 On an appreciation of the facts on record and the issues raised in this appeal in A.Y. 2010-11 (supra), we find that in this year also the facts largely remain the same as in the earlier Asst. years, and this forms the basis on which relief has been granted to the assessee by the Ld. CIT(A) in the impugned order, wherein it was held that the assessee's agent did not constitute its ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
