AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 866
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....e ld. CIT(A) may be cancelled and that of AO may be restored to the above extent. (iv) The appellant craves leave to add/alter/modify/delete any of the ground of appeal at the time of hearing." 3. Facts of the case, in brief, in so far as they are relevant for disposal of the present appeal are that the Respondent-company, namely, M/s Marine Containers Services (India) Pvt. Ltd., acts as agent for the freight beneficiary, namely, M/s Yang Ming (UK) Ltd. In the assessment year under appeal also, it acted as agent of the said freight beneficiary. The freight beneficiary, i.e., M/s Yang Ming (UK) Ltd, is engaged in the business of transportation of goods by sea. The principal company, i.e., freight beneficiary, is registered in UK and resident of UK. In the year under appeal, the principal company operated 40 voyages arriving at Mundra Port. The respondent-company, acting as agent of the freight beneficiary, filed voyage returns in respect of the aforesaid 45 voyages before the Assessing Officer at Gandhidham as required by section 172(3) of the Income-tax Act. Instead of passing 45 orders u/s 172(4) separately to dispose of each of the aforesaid 45 voyage returns filed by the....
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....t is not engaged in occasional shipping business is backed by its taking the alternate recourse provided in section 172(7) itself. Thus, the combined order passed u/s 172(4) by the Income Tax Officer is null and void as assessee's claim that it is not engaged in occasional shipping business is backed by its taking the alternate recourse provided in section 172(7) itself. It is liable to be assessed on the basis of return filed u/s 139(1) for its entire income. One more issue is the AO's reasoning that the appellant is not owner/charter of the vessels. Once the AO says that the appellant is not owner/charter of the vessel; then he could not have taken recourse to section 172 itself as the section applied to owner/charter only. The sub-section (1) reads as under : "172. (1) The provisions of this section shall, notwithstanding anything contained in the other provisions of this Act, apply for the purpose of the levy and recovery of tax in the case of any ship, belonging to or chartered by a non-resident, which carries passengers, livestock, main or goods shipped at a port in India" However, this sub-issue is not adjudicated since I have already held earlier that the order passed b....
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....ot stipulate multiple assessments against the same assessee simultaneously u/s 172(4) and also under the normal provisions of the said Act. He contended that the ld. CIT(A) has therefore rightly quashed the order passed by the AO u/s 172(4). 8. We shall now turn to the issues raised in the grounds of appeal taken by the Department. The issue before us is not about the assessability or determination of income from the aforesaid 45 voyages but about the procedure to be adopted for assessment of income from those voyages. The Assessing Officer has invoked section 172(4) to tax the income in a summary manner from 45 voyages operated by the freight beneficiary in the year under appeal on the basis of the returns filed u/s 172(3) before him. The respondent-company, on the other hand, claims that the procedure outlined in section 172(4) is not applicable to it as it has already filed its return of income u/s 139(1) before the expiry of the assessment year under appeal and therefore it ought to have been assessed in respect of income from 45 voyages under the normal provisions of the I-T Act in view of the provisions of section 172(7). 9. On appeal by the assessee, the ld. CIT(A) has qua....
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....er of the ship to prepare and furnish, before the departure of any such ship, to the Assessing Officer a return of the full amount paid or payable to the owner or charterer or any person on his behalf on carriage of all passengers, livestock, mail or goods shipped at that port since the last arrival of the ship thereat. Sub-section (4) requires the AO to assess income referred to in sub-section (2) and determine the sum payable thereon. The procedure of assessment contemplated by sub-sections (2) and (4) is summary in nature in that it neither allows the non-residents to claim any deduction including the benefits otherwise admissible under the Double Taxation Avoidance Agreements nor requires the AO to follow any elaborate procedure for making the assessment. The AO has to simply assess the income at the rate of 7.5% of the freight paid or payable to the owner or charterer of the ship or any person on his behalf. And that is the end of the matter as far as assessment of income from such ships is concerned. Sub-section (7) of section 172 confers a right on the owner or charterer of a ship to claim before the AO before the expiry of the relevant assessment year that an assessment be ....
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....on 172 would not be applicable to (i) assess the profits of non-residents from regular shipping business; (ii) the cases covered by sub-section (7) of section 172, i.e., where the owner or charterer claims that his total income should be assessed in accordance with the normal provisions of the Income-tax Act; and (iii) cases where there is a convention between the Government of India and the foreign countries as provided under section 90 of the Income-tax Act. The summary procedure of assessment contemplated by section 172 cannot be mixed up with a regular assessment especially when option is exercised by the owner or charterer of the ship u/s 172(7). By the same analogy, there cannot be multiple assessments of profits from the same voyages, i.e., one u/s 172(4) on the basis of returns filed u/s 172(3) and the other under the normal provisions of the Income-tax Act on the basis of the return filed u/s 139. 13. Looking to the magnitude of the voyages undertaken by the freight beneficiary and the fact that the respondent-company has been, as observed by the ld. CIT(A), regularly filing its return of income at Mumbai and being assessed to tax at Mumbai, the finding of the CIT(A) that....
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.... his assessment would need to be completed under the normal provisions of the Income-tax Act. The ld. CIT-DR vehemently contented that the jurisdictional Assessing Officer should be directed to verify the position and tax the income of the freight beneficiary (represented by the respondent-company) from the business of handling cargo transportation (including slot chartering business) as per normal provisions of the Act. It is the case of the respondent-company that its income including the income from 45 voyages covered by the impugned order passed by the AO u/s 172(4) should be taxed in accordance with the normal provisions of the Income-tax Act on the basis of the return filed by it u/s 139 at Mumbai. Perusal of the order passed by the CIT(A) shows that he has taken a view that the case of the respondent falls u/s 172(7) and not u/s 172(4). The respondent-company has also accepted the liability to be dealt with u/s 172(7). The jurisdictional AO may therefore verify the position and take such action as may be warranted in law in terms of section 172(7) to ensure that the income of the assessee from the aforesaid 45 voyages does not escape assessment as per the normal provisions o....