TaxTMI 
TaxTMI 
2017 (1) TMI 892
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....not liable to deduct tax on reimbursement of shipping expenses paid to Dolphin Maritime Agency Pvt. Ltd., who is not shipping agent of non resident ship owner but an independent shipping agent. 2. Whether in law and facts of the case the Ind CIT (A) erred in holding that the reimbursements to Dolphin Maritime Agency Pvt. Ltd. are not liable for tax deduction at source without appreciating the fact that sections 194C and 194] refer to any sums paid and that Circular no. 715 of the C.B.D.T dated 08.08.1995 answers this question in the affirmative at question number 30. 3. Appellant prays that the order of the CIT(A) be reversed and that of the Assessing Officer be restored. 2. During the course of hearing none appeared on behalf of t....
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....The same has been verified and found that the foreign shipping company had also raised bill on C & F agent, exactly of same amount. The Ld. AR also filed a copy of declaration dated 1.4.2010, issued by the above shipping company and the same has been considered. The relevant part of the same is reproduced, here as under: We CMA CGM AGENCIES (INDIA) PRIVATE LIMITED are the agent for CMA CGM, 4 Quai D'arenc, Marseilles (France) in India. We hereby confirm that as per the provision of the Income Tax Act, 1961 CMA CGM S.A. FRANCE is non-resident shipping company engaged in the business of operation of ships in International Traffic. The place of effective management is situated in FRANCE and the said shipping company is tax residen....
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....mark r and under Article 9 (Shipping) of the Agreement for Avoidance of Double Taxation between India and Denmark, the prof i ts der ived by our Pr incipal from the operat ion of ships in international traffic are taxable only in Denmark. Further we are regularly filing returns of income based On the provisions of section 139/172 of the Act for the freight charges, terminal charges, terminal handling charges (THC) and any other amount of a similar nature collected by us on behalf .of our Principal in respect of goods shipped at a port in India. We Fiereby confirm that the entire amount payable by you to us towards freight and other charges mentioned above for the financial year 2010-11 has been or shall be included in the returns filed o....
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....ination of the documents and details filed, it appears that the principal is entitled for the benefit of Article 8 of the DTAA between India and Belgium. In view of this, the principal is entitled for 100% DIT Relief on account of income from operation of the vessels as per Annexure attached herewith operating in the international traffic which is either owned or chartered by the principal for transportation of passengers, mail livestock or goods carried on by the principal from the Indian ports. However, any income earned for the transportation of passengers, mail livestock or goods from one place to another place within India is not covered by this DIT Relief Certificate. The certificate is issued and will be relevant only to M/s....
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....ds the reimbursement of expenses incurred by the C& F agents on behalf of the appellant. As explained by the appellant, these expenses were incurred by the C&F agents on behalf of the appellant and claims were made in their bills on actual basis and the amounts were shown separately supported by necessary evidence. Therefore, these payments were made on actual basis and they do not contain any element of income. Hence, such a payment is not liablefor deduction of tax under section 195 of the Act. Further the Board's circular is applicable only where there is no. indication about the reimbursable amounts in the bills separately. In that cae, the gross amount has to be considered for deduction of tax. In view of this factual and legal pos....
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....een raised by the C & F agent, to the appellant, has also been raised by the shipping companies to the C & F agents for shipping of goods. Accordingly, it is claimed that there is no case of any income element in the hands of the C & F agents. The copy of bills of above shipping company is placed on record and verifiable. In view of the factual position, as laid out above and respectively, following the above decisions, as cited by the Ld. AR, I hereby hold that the appellant is not liable to deduct tax on reimbursement of shipping expenses paid to C & F agents (which. are separately billed), on behalf of the foreign shipping companies. The AO, is therefore directed. to allow relief to the extent of amount paid (for shipping of goods to for....