TaxTMI 
TaxTMI 
2012 (9) TMI 314
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....r Section 144C(5) vide order dated 16-8-2010. The assessee's main grievance are as under :- (i) that "slot hire charges" received by the Appellants during the year are in the nature of income earned from the operation of ships in international traffic and is accordingly covered by Article-8 of the DTAA. (ii) that "slot hire charges" being covered by Article 8 of the DTAA, are not liable for tax in India as per ruling of the Authority of Advance Ruling (AAR) in the Appellants own case (order dated 29.10.1997 in AAR No.356 of 1997). (iii) that without prejudice to the above, even assuming that the said income from "slot hire charges" is not covered by Article 8 and is in the nature of business profits covered by ....
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....pping operations and benefit of Article 8 of India and UAE DTAA is available to the assessee. Relying on the said decision of AAR, the assessee submitted before the Assessing Officer that its freight receipts is not taxable in India. Alternatively it was also submitted that it is not covered under Article 7 of DTAA as there is no PE in India and, therefore, business income cannot be computed under Section 44B. 3. The Assessing Officer referred the Draft Assessment Order proposing to tax the assessee in India, under Section 144C(1) to DRP Mumbai. Before the DRP, the assessee submitted details objections on various aspects. The sum and substance of said objections were that :- (i) its case is squarely covered by the decision of AA....
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....ceipts of Rs. 1,68,39,200/- as 'business income' to be computed under Section 44B and worked out the taxable income of Rs. 25,25,883/- by applying the rate of 15%. 5. Learned AR on behalf of the assessee submitted that its case is squarely covered by the ruling of AAR wherein it has been categorically held that the assessee is having income from operation of ships and is covered under Article 8 of the Indo-UAE DTAA Treaty, in view of which its income is not taxable in India. He categorically relied upon para 3 of the ruling wherein it has been recorded that "the affidavit further states that the company would operate the services using its own vessels as also vessels on charter or on management and depending on volume of business availab....
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....ily rejected. The assessee's main contention that its case is covered by AAR ruling, has not been analyzed at all. As pointed out by the learned AR, in para 3 of the AAR ruling there is a categorical averment that the assessee would operate services using its own vessels or vessels on charter and it would also resort to "slot hire charges" on vessels owned by it or operated by others. At several places, it has been noted by the AAR that the assessee will not only operate ships owned by it but also do business as an agent and other incidental business relating to shipping operations. Based on these facts, the AAR has given a categorical finding, firstly, that the assessee is a resident of UAE and its taxation of income in India would be gove....
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.... is not accepted. This casual attitude of the DRP leads to harassment of the assessee and drag them to protracted litigation. This casual nature of DRP has been frowned upon in several cases not only by Tribunal but also by Hon'ble High Courts. In the case of Gap International Sourcing India (P) Ltd. v. Dy. CIT [2011] 44 SOT 56/[2010] 8 taxmann.com 294 (Delhi), the coordinate bench of this Tribunal came across a similar situation wherein voluminous submissions made by the assessee were found to be brushed aside by the DRP without even a whisper in the order. The order passed by the DRP, therefore, was held to be laconic by the Tribunal and the matter was remitted back to the DRP to consider the same again and to pass a proper and speaking o....