TaxTMI 
TaxTMI 
2015 (9) TMI 1056
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.... 2006 passed by the Income Tax Appellate Tribunal (the 'Tribunal') allowing the appeals filed by the respondent-assessee. The Assessment Years involved are A.Y. 1999-00 and 2000-01. 2. Both these appeals were admitted on 12 October 2007 on the following substantial questions of law: (I) Whether in facts and circumstances of the case, the ITAT has erred in applying the provision of Section 172 in holding that section 40(a)(i), is not applicable, particularly when section 172 concerned with levy and recovery of tax in a case of any ship, as against section 195 r/w 40(a) (i) of the IT Act, refers to non-resident Assessee as in the present case ? (II) Whether in the facts and in the circumstances of the case, the IT....
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....to section 80HHC, is right in law ? (VII) Whether the findings of the ITAT, that only 90 % of 'net' income from the 'transfer of vessel' and 'barge freight', has to be excluded, for the purpose of computing profits of the business under clause (baa) of Explanation to section 80HHC, is right in law ? (VIII) Whether the findings of the ITAT that, only 90 % of the 'net' income from the 'lease hire charges' received by the Assessee apart from depreciation has to be excluded for the purpose of computing profits of the business under clause (baa) of Explanation to Section 80HHC, is right in law? Regarding Question No.1: 3. The respondent-assessee had claimed expenditure of Rs. 1.8 cr....
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....CIT Vs. Orient (Goa) (P) Ltd. rendered on 2 December 2004. The impugned order holds that Section 40(a)(i) of the Act would apply only when there is an obligation to deduct tax at source. Reliance was placed upon the Circular No. 723 issued by CBDT to support it's plea that there was no obligation to deduct tax at source in respect of payment made towards demurrage charges in cases where Section 172 of the Act applies. It was not disputed by the revenue that in this case Section 172 of the Act applies. The impugned order specifically holds that Section 172 of the Act is a charging as well as a machinery provision in respect of non-resident shipping companies. It provides for determination and collection of tax. Thus Chapter XVII of the A....
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..... However as the assessee had not deducted tax at source on the demurrage charges paid, the Assessing Officer disallowed the expenditure of demurrage charges in view of Section 40(a)(i) of the Act. (b) In appeal, the CIT(A) held that demurrage charges had been paid by assessee. However in the hands of recipient M/s Mitsui & Co. Ltd. It was in the nature of profits of a non-resident from occasional shipping business. Placing reliance upon the CBDT Circular No. 723 and Section 172 of the Act, the CIT(A) allowed the appeal. (c) The revenue's appeal to the Tribunal was dismissed. 10. This Court held that Section 172 of the Act is applicable only in respect of non-resident carrying on shipping business while assessee i.e. Orient (Go....
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....-residents. The other aspect is that such profits of non-residents should be from occasional shipping business. It is not the case that the respondent assessee has earned some profit from occasional shipping and is a non-resident. In our view, s. 172 does not have application in relation to the respondent assessee and in the facts and circumstances of the present case. The company from Japan viz., Mitsui & Co. Ltd., Japan, recipient of demurrage amount is not before us. In other words, we are not examining the tax liability of the foreign company i.e., Mitsui & Co. Ltd., Japan. .......... Provisions of s. 172 are to apply notwithstanding anything contained in the other provisions of the Act. Therefore, in such cases, the provisions of ss. 1....
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....ing a resident company. The introduction of section 172 of the Act by the assessee was to determine whether in view thereof, was there any obligation to deduct tax at source by the payerassessee. Section 172 of the Act has to be examined through the prism of the non-resident shipping company in respect of it's income. It is in the above view that Section 172 of the Act and Circular No. 723 issued by the CBDT was relied upon by the respondent-assessee to point out that as Section 172 of the Act provides a complete code itself for levy recovery of tax ship wise and journey wise. Thus there is no occasion to deduct tax under Chapter XVII of the Act. 12. It is a settled position under the law of precedents that, it is not open to us (Div....