TaxTMI 
TaxTMI 
2011 (6) TMI 777
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....the CIT(A) on the above issues may be set aside and that of the AO be restored." C.O.No.195/Ahd/2009[Assessee] "[1] On facts of the case & in law, the Learned C.I.T. (Appeal) -II, Baroda has rightly allowed the claim of expenses of ₹ 88,77,737/- (disallowed by ITO, Ward 2(5) Baroda invoking the provisions of Sec. 40(a)(ia) of the Act). Based on conclusion upon appreciation of the evidence and held the payments made to foreign shipping lines or agents thereof are covered u/s 172 read with circular No. 723 dated 19-9-95 and in view of specific provision of article in D.T.A has provided u/s 90 is not taxable in India, will have an overriding effect over all other provisions when said provisions are evoked and therefore Sec 194C is not applicable. [2] The above payments are made to local resident agents of nonresident shipping companies are received on behalf of nonresident shippers are passed on to the agents u/s 172 in respect of such payments are on behalf of the shipping lines which are excluded and cannot be taken into consideration for the purpose of working out the default of the assessee in not deducting tax u/s 194C of the act. The requirement of TDS would arise o....
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....chart and the bills / debit notes produced by the assesse, the AO noticed that the assessee made payments under the following heads: • Air/ Sea Freight Charges • Cargo Carting • Govt. Charges • Document Charges • CFS/CWC Charges • Custom Duty • DO Charges • THC Charges • B L Charges • MICT Charges • Courier Charges • Examination Charges • Brokerage • Transportation Charges • Agency Charges • Service Tax 8% 2.1 The assessee further explained that the parties to whom payments were made were either Non resident Parties or were agents of the Non Residents and therefore, the recovery of taxes in such cases would be covered u/s 172 of the Act and not under any provisions of Chapter XVII B of the Act. To a further query by the AO,seeking documentary evidences in support of his explanation that the payee parties were either non-resident parties or were agents of non resident parties, the assesse merely furnished copies of profiles of some of the parties as available on their respective websites. In these circumstances, the AO issued a show cause notice as to why the expenses debited under Logis....
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....he provision of section 40(a)(ia) were not applicable and the amount was allowable as expenditure incurred in connection with the business. It was pointed out that provisions of section 172 would not be applicable in a case where there existed a Double Taxation Agreement between the Government of India and Foreign Nation as provided in Sec. 90 The assessee further did not press disallowance of ₹ 28,88,845/- as detailed on page 11 of the impugned order and restricted its claim only to an amount of ₹ 93,30,202/- paid to the following parties; Sr. No. Name of Party Amount on which we Claim exemption 1 U T World Wide I Pvt. Ltd. 22,97,336/- 2 Evergreen India Pvt. Ltd 68,652/- 3 Meridian Shipping Ag. Pvt. Ltd. 1,31,880/- 4 IIC Container Ind. Ltd. 83,370/- 5 Transworld Shipping Serv P Ltd 3,02,584/- 6 Satrun Shipping Ag Pvt. Ltd. 3,91,061/- 7 Perma Container Line 1,01,990/- 8 Maritime Serv Pvt. Ltd. 28,130/- 9 Aligator Shipping Serv Pvt. Ltd. 71,905/- 10 APL India Pvt. Ltd. 52,50,038/ 11 Hind Freight Serv Pvt. Ltd. 2,59,571/- 12 Maxicon Shipping AG Pvt. Ltd. 2,92,194/- 13 Seahawk Lines Pvt. Ltd. 51,491/- Total Rs. 93,30,202/- 3.1. ....
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....enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in that state. iv. IIC Container Lines: Sr.No. Name of the Agent Name of Non-Resi. Shipping Co. Head Quarter In Total Amount claimed 10 IIC Container Lines A 1004, Premium House, Opp. Gandhigram Rly. Stn. Ahmedabad Regional Quarter in Singapore: IIC Container Lines (S) Pte. Ltd. Branch in India: IIC Container Line P. Ltd. Singapore 83,370 1 Certificates of agent as agents of non-resident shipping companies. 2 Xerox copy of bill of lading. 3 IIC Containers Lines Pvt. Ltd. is an authorized agent of IIC Containers Lines (S) Pvt. Ltd. who is regularly filing returns on income based on provisions of Section 172 of I T Act 1961. The Certificate is attached. 4 India has entered into a DTAA with Singapore (1994) 209 ITR St.1 wherein it is stated in article 8 that Profit derived by an enterprise of a contacting state from the operation of ships or an aircraft in an international traffic shall be taxable only in that state. v. Transworld Shipping Services (I) Pvt. Ltd.: Sr. No. Name of the Agent Name of Non-Resi. Shipping Co. Head Quarter In Total Amount Claimed ....
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....le only in that state. viii. Maritime Services Pvt. Ltd.: 14 Maritime Services P. Ltd. 28,130/- Issued by Dy. Director of Income Tax (International Taxation) 2(1) Mumbai dt . 16-04-2004. 1 Best team Shipping Co. Ltd use full tools worldwide container liners. 2 Individual company wise investor relation. 3 Maritime Services Pvt. Ltd is the Agent of RCL Feeder Pvt. Ltd., Australia Liner - general steamship and chartering agents to whom we have paid ocean freight, THC & other charges. ix. Alligator Shipping Services Pvt. Ltd. 15. Alligator Shipping Services Pvt . Ltd. 71,905/- Issued by Dy. Director of Income Tax (International Taxation) 2(1) Mumbai dt . 03-06-2004. 1 Individual company wise investor relation. 2 India has entered Double Taxation Avoidance Agreement with Singapore (1994) 209 ITR St. 1 wherein it is stated in article 8 that Profit derived by an enterprise of a contacting state from the operation of ships or an aircraft in an international traffic shall be taxable only in that state. x. APL India P. Ltd.: Sr.No. Name of Party Amount Rs. Certificate Ref. 16. APL India P Ltd 52,50,0387- Issued by Asst. Commissioner of Income Tax, Circle 1, Karuve Lip....
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.... the operation of ships or an aircraft in an international traffic shall be taxable only in that state. xiii. Seahawk Lines Pvt. Ltd. Sr.No. Name of the Agent Name of Non-Resi. Shipping Co. Head Quarter In Total Amount Claimed 20 Seahawk Lines Pvt. Ltd. 105, Gulab Building, 237 PD' Mello Rd, Fort , Mumbai H Q in Malaysia Malaysia 51,491/- 1 Individual company wise investor relation. 2 Xerox copy of bill of lading 3 Xerox copy of freight certificate issued by agent. 4 India has entered into DTAA with Malaysia (1997) 107 ITR St. 136 wherein it is stated in article 8 that Income of an enterprise of one of the Contracting State derived from the other contracting state from the operation of ships in international traffic may be taxed in that other contracting state, but the tax chargeable in that contracting state on such income shall be reduced by an amount equal to fifty per cent of such tax. 4. In the light of aforesaid submissions, the learned CIT(A) adjudicated the issue in the following terms:- "3.3. I have considered the submissions of the Authorized Representative and the facts of the case. Section 40(a)(ia) refers to the expenditure on any interest, commission ....
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....operates In the area of computation of profits from shipping business of non-residents. Thus, there is no overlapping in the areas of operation of these sections. 5. There would, however, be cases where payments are made to shipping agents of non-resident ship-owners or charters for carriage of passengers etc. shipped at a port in India. Since, the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of sections 194C and 195 will not apply". The above circular of the Board is squarely applicable to the facts of the instant case and the issue for determination. In this case wherever payments were not made to non resident shipping companies or their agents the appellant, during the course of appellant proceedings did not press the claim. Hence, payments made for MICT charges courier charges, examination charges, brokerage charges, transportation charges and agency charges amounting to ₹ 17,55,630/- was withdrawn. Further payments made to local parties of ₹ 11,33,215/- was also withdrawn. With regard to the balance disallowance the assessee has bro....
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....LD WIDE IND. 5400 CARGO CARTING 2654 EXAM CHARGES 160095 TPT 30900 AGENCY CHARGES R.C. GUPTA BROS 72250 HIND FREIGHT SERVICES 8000 GLOBAL MAR. 106000 SEVEN SEAS 191200 ---------------- 2899158 With regard to payments of ₹ 3,91,061/- made to Saturn Ship Agency Pvt. Ltd. there does not exist a Double Taxation Avoidance Agreement with Indonesia. Payments made to Sea Hark Pvt. Ltd. of ₹ 51,491/- are covered by DTAA with Malaysia wherein it is stated that 50% of the payment would be taxable in India. Since no evidence is on record that the returns for these two concerns have been filed u/s 172 of the Income-tax Act the addition made by the AO is confirmed. " 5. The Revenue is now in appeal before us against the aforesaid findings of the learned CIT(A). The learned DR supported the findings of the AO while the learned AR on behalf of the assessee relied upon the impugned order and reiterated their submissions before the ld. CIT(A). 6. We have heard both the parties and gone through the facts of the case as also the written submissions filed before us on behalf of the assessee. In the instant case, the AO invoked the provisions of section 40(a)(ia) of the Act ....