TaxTMI 
TaxTMI 
2017 (11) TMI 1474
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.... onward transportation by vessels owned, leased or chartered by the Appellant. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not treating the freight income earned by the appellant from shippers for containers loaded on feeder vessels as income from use / maintenance / rental of containers, etc. and thereby erred in not granting the benefit of Article 8(3) of the Tax Treaty to such income. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the action of the learned ADIT in holding Crescent Shipping Agencies (India) Ltd. ('Crescent) as a 'permanent establishment' ('PE') of the appellant in India under Article 5 of the Tax Treaty. 3(a) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the action of the learned ADIT in holding Crescent as a Fixed Place PE under Article 5(1) of the Tax Treaty. 3(b) On the facts and in the circumstances of the case and in law, the learned ClT(A) erred in confirming the action of the learned ADIT in holding Crescent as an agency PE under Article 5(5) of the Tax Treaty. 3(....
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....ternational traffic through owned/chartered/pooled ships. 2. For AY 2008-09, MISC Berhad filed its Return of Income on 21 August 2008 declaring total income of Rs..19,80,70,343 and claiming refund of Rs..95,98,054. 3. The learned Assessing Officer ('AO') vide order dated 22 December 2010, passed under section 144C(3) read with section 143(3) of the Income Tax Act, 1961 ('IT Act'), assessed the total income of the Company at Rs.. 1,55,79,820 and consequently determined the refund at Rs..24.45,436. Being aggrieved by the order of the learned AO, the company filed an appeal before the learned Commissioner of Income Tax (Appeals) - 11, Mumbai ['CIT(A)']. The learned CIT(A), vide his order dated 14 August 2013, granted part relief to the Company and upheld the action of the learned AO on most of the grounds. 4. Pursuant to the aforesaid order, the appellant wishes to prefer an appeal before your Honors. As per section 253(3) of the IT Act, the last date for filing an appeal before your Honours is 60 days from the date of service of the learned CIT(A)'s order to the Company. However, due to sufficient cause, as explained in the ensuing paragraphs. the....
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....g this appeal is not due to any malafide intention on the part of the appellant. 5. Here, we also wish to submit that section 253(5) of the IT Act grants powers to your Honours to admit appeals even after the expiration of the prescribed period if your Honours is satisfied that the appellant had "sufficient cause" for not presenting the appeal within that period. Accordingly, we request your Honours to condone the delay in filing of the subject appeal petition as there was, sufficient cause for not presenting the appeal on time. 6. In support of our submission above, we wish to bring to your Honours kind attention, that the appellate authorities and the Courts have been consistently adopting a liberal approach on the powers to condone delay, so that the ends of justice are sub-served. 6.1 In this regard, we refer to the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition Anantnag and Anr. Vs Katiji and Ors, (167 ITR 471) (copy enclosed as Annexure A), wherein the Hon'ble Supreme Court has interpreted the term "sufficient cause" in the context of the power to condone delay under Section 5 of the Limitation Act, 1963. According to the Hon'....
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....erits rather than to dispose it on mere technicalities more so in a case where there was no malafide intention on the part of the appellant to cause the delay, as explained above. Accordingly, in the interest of natural justice, the appellant requests your Honours to kindly condone the delay in filing of the appeal and oblige. 4. Ld.DR vehemently opposed for condonation of delay. 5. On a perusal of the petition and the reasons explained therein for the delay in filing the appeal, we find the assessee is prevented with reasonable cause in filing the appeal with delay of 471 days. The assessee could properly explain the delay in filing the appeal thus we condone the delay of 471 days and admit the appeal for disposing off the same on merits. 6. Coming to the merits, Learned Counsel for the assessee submits that the main issue in appeal i.e. Ground no. 1 is relating to confirming the action of the Assessing Officer in denying the benefit of Article-8 of the India- Malaysia Double Taxation Avoidance Agreement on freight income earned by the assessee from shippers for transporting cargo loaded on feeder vessels for onward transportation by vessels owned, leased or chartered by the a....
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....ship for a voyage. The Law Lexicon (P. Ramanatha Ayier, 2nd Edn.), defines the word "charterer" as "one who, by contract acquired the right to use a vessel belonging to another. One who charters or hires or engages the whole or part of a ship under an agreement of Charter Party for a voyage". Here, the word "charterer" does not mean the owner or lessee of a ship. The word "charter Party" has been defined in Law Lexicon as "an indenture of covenants and agreements made between merchants and mariners concerning their sea affairs. It is a contract by which a ship or some principal part thereof, is let to a merchant for conveyance of goods on a determined voyage to one or more places". From this definition, it is amply evident that the word "charterer" means hiring of a ship for a voyage, either whole of the ship or a part of a ship. The word "charter" completely eludes the concept of ownership. A charterer of a ship cannot be the owner of a ship. Therefore, the contention of the learned Departmental Representative that the word "charterer" has to be understood in the context of owner or lessee that is having control of the ship is perhaps not the correct understanding of the word "cha....
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....an agreement for a voyage. Thus, even a part of a space in the vessels for a particular journey is also considered as "charter of ship" or "charterer". In the decision of Balaji Shipping U.K. Ltd. (supra), while referring to the judgment of Tychy (supra), the High Court have noted that a "slot charter" and a "voyage charter" of a part of a ship are in a sense charterers of a space in a ship. 25. From the above discussion, the following inferences can be deduced: i) Firstly, the operation of a ship can be done as charterer which does not mean to own or control the ship either as an owner or as a lessee; ii) Secondly, charterer is a hirer of a ship under an agreement or arrangement to acquire the right to use a vessel or a ship for the transportation of a good on a determined voyage, either the whole of the ship or part of the ship or some space of the ship in a charter party agreement; and iii) Thirdly, the word "charterer" includes a voyage charter of a part of a ship or a slot, as it is also arrangement or agreement to hire a space in a ship owned and leased by other persons. Thus, in our opinion, the word "charterer" should not be confused from the word "owner" or ....
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....f reasons and different situations such as obliging regular clients, or cultivating new ones. If it were not to do so, it may well loose clientele. Ships owned or chartered or otherwise controlled or managed by an enterprise may not be available on the particular route on a given day or for a particular period. The enterprise may already have entered into contracts or may even be required to enter into contracts for the carriage of goods on that route on that day or during that period. The trade would expect, the enterprise to perform its contracts and/or ensure there is no break in its services. This it can do by availing slot hire agreements. Their refusal or failure to do so, may well affect their business and reputation adversely. 27. By availing the facility of slot hire agreements, the enterprise does not arrange the shipment on behalf of the owner of the said vessel, but does so on its own account on a principal to principal basis with its clients. Such cases also have a nexus to the main business of the enterprise of the operation of ships. They are ancillary to and complement the operation of ships by the enterprise. If they are not merely ancillary to the main business....
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.... of the person who has hired the ship and the hirer agrees to pay for conveyance of goods on a determined voyage. The risk of the assessee is towards its customers from whom he has agreed to transport the cargo / goods from the destination port of booking to the final destination port. Thus, in our opinion, such a strict interpretation of the word "charterer" as adopted by the Department cannot be sustained. 30. Now coming to the decision of Cia-De-Navegacao Norsul (supra), we find that in the said decision, the assessee had failed to link and establish the voyage wise transportation, whether the feeder vessels were actually loading the goods into the mother vessels, which the assessee had claimed that it was operating. This is evident from Para- 2 of the said Tribunal order. Further, as pointed out by the learned counsel, the plea of the assessee that there was a slot charter agreement with the feeder vessel orally was not supported by any material or evidence. It was in this context that this plea of slot charter agreement with the feeder vessel was rejected. Further, in view of the meaning of the concept of charter and slot charter as explained by the Hon'ble Jurisdiction....