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TMI Blog2020 (10) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... etary limit of Rs. 50 lakh applicable to appeals before the Tribunal, as per CBDT Circular no.17 of 2019, dated 8th August 2019. Further, he submitted, the appeal is not protected under any of the exceptions provided under the said circular. Thus, learned Counsel for the assessee submitted, Revenue's appeal being covered under the aforesaid Circular is not maintainable. In support of such contention, the learned Counsel for the assessee also furnished a working of the tax effect. 3. Shri Avaneesh Tiwari, the learned Departmental Representative fairly agreed with the aforesaid submissions of the learned Counsel for the assessee. 4. We have considered rival submissions and perused the material on record. As per the working submitted by the learned Counsel for the assessee, the tax effect on the amount disputed by the Revenue in the present appeal works out to Rs. 3,93,116.We find that as per CBDT Circular no.17/2019, dated 8th August 2019, it stands clarified that the revised monetary limit of Rs. 50 lakh as per the aforesaid Circular would also apply to all pending appeals. In view of the aforesaid, Revenue's appeal deserves to be dismissed. 5. In the result, Revenue's appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade any claim under Article-7 of the Tax Treaty. Thus, he concluded that the assessee has fixed place PE under Article-5(1) of the Tax Treaty, as its place of effective management is in India. Additionally, he also observed that the assessee has also PE in India under Article-5(5) through its dependent agents viz. Parekh Marine Agency Pvt. Ltd. and Samsara Shipping Pvt. Ltd. Accordingly, he concluded that the gross total income of US $ 3,88,810 would be subject to tax in India. Thus, he determined the total income of the assessee at Rs. 1,55,52,400 and raised tax demand on such income. The assessee challenged the assessment order so passed by filing appeal before the first appellate authority. 10. After considering the submissions of the assessee in the context of facts and material on record as well as judicial precedents cited before him, learned Commissioner (Appeals) ultimately concluded that Parekh Marine Agency Pvt. Ltd. and Samsara Shipping Pvt. Ltd., cannot be considered to be the dependent agents of the assessee as both these entities have their independent business and have earned commission income from various other principals as well. Thus, he held that the aforesaid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bay Lines (Mauritius), [2018] 91 taxmann.com 110 (Mum.); ii) DDIT v/s ARC Line (Mauritius), ITA no.1096/Mum./2010 (Mum.); and iii) ARC Line (Mauritius) v/s DCIT, [2019] 112 taxmann.com 95 (Mum.). 13. We have considered rival submissions in the light of the decisions relied upon and perused the material on record. The short issue arising for consideration before us is, whether the assessee has a fixed place PE in India or a PE through dependent agents? Article-5 of the Tax Treaty defines PE. As per Article-5(1), PE means a fixed place of business through which the business of the enterprise of one contracting State is wholly or partly carried out in the other contracting State. Article-5(2) illustrates the facilities which can be considered as PE, such as, place of management, a branch, an office, a factory, a workshop, a warehouse in relation to a person providing storage facilities for others and so on and so forth as provided in items (a) to (j) of the Article-5(2) of the Tax Treaty. Thus, first and foremost it is necessary to understand the meaning of the term "fixed place of business" as used in Article-5(1). The tests required to satisfy the existence of a PE under Articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article-5(5). 15. Keeping in perspective Article-5(5) of the Tax Treaty if we examine the status of Parekh Marine Agency Pvt. Ltd. and Samsara Shipping Pvt. Ltd. vis-a-vis the assessee, it would clearly emerge that while providing services to the assessee, both these entities are acting in the ordinary course of their business and are having their independent status. As could be seen from the facts on record as well as observations made by learned Commissioner (Appeals), during the year under consideration, Samsara Shipping Pvt. Ltd., has provided services to six shipping companies including the assessee and out of the total commission earned of Rs. 3,83,20,806, it received an amount of Rs. 46,53,998, from the assessee which constitutes a meagre 12.14% of the total income earned by Samsara Shipping Pvt. Ltd. from various principals. The same is the case with Parekh Marine Agency Pvt. Ltd.As observed by learned Commissioner (Appeals), during the year this entity has received income of Rs. 629.74 lakh from various principals, out of which, an amount of Rs. 17.62 lakh was earned from the assessee which constitutes merely 2.79% of the total income earned by the said party. Thus, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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