AI Drafter 
TaxTMI 
TaxTMI 
2020 (5) TMI 629
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....the action of the Assessing Officer by holding the appellant was not entitled to the beneficial provisions of Article 9 (Shipping) of the Double Taxation Avoidance Agreement between India and the United Kingdom (India UK DTAA) since the appellant did not own or hire any ships and the income was not derived from the use or hire of the containers in international traffic. 2. Without prejudice to the foregoing ground, the Hon'ble CIT(A) erred in confirming the action of the learned Assessing Officer in holding that the agent in India was a 'Dependent Agent' of the appellant, constituting a permanent establishment (PE) within the meaning of Article 5 of India UK DTS, and the appellant was, therefore, liable to be taxed under Article 7 of India UK DTAA. 3. Without prejudice to the above grounds of appeal of the appellant, that it is entitled to the benefits of Article 9 of India UK DTAA, even assuming- though not conceding that the appellant has a PE in India as per Article 5 of India UK DTAA, the Hon'ble CIT(A) erred in confirming the action of the learned AO in estimating the profits of the appellant, in accordance with rule 10 of the Income Tax Rules 1962, by relyin....
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....tence of permanent establishment could perhaps be a wholly academic issue inasmuch as once the agent is paid an arm's length remuneration for the services rendered, as is not even in dispute in the present case, no further profit can be attributed to the PE. In other words, the proposition was that, as the law stands now, existence of a DAPE is tax neutral except in a situation in which agent is not paid an arm's length remuneration for services rendered, and since it is nobody's case that agent has not been paid arm's remuneration, nothing turns on existence of PE because, even if there is a PE, no further profits can be attributed to the DAPE. None of the parties objected to this proposition, even though learned Departmental Representative dutifully relied upon the stand of the authorities below and submitted that the matter is in appeal before the Hon'ble Supreme Court. Learned counsel for the assessee, however, has subsequently filed a written note justifying the claim of treaty protection under article 9 and dealing with other arguments which were not subject matter of consideration in the open court proceedings before us. In the case of Set Satellite (supra), ....
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....m/2010 as well. It is pointed out that all the material facts and circumstances are similar and the difference is only in respect of the income assessed- Rs. 40,82,990 in this year. In view of this agreed position, and respectfully following our decision in the ITA no, 2496/Mum/2009 above, we uphold the plea of the assessee that as the consideration paid to the agent was an arm's length remuneration and as the same has been subjected to tax in India, no further profits can be brought to tax in the hands of the assessee. The impugned addition of Rs. 40,82,990 is thus deleted. Learned representatives fairly agree that once this core issue is decided in favour of the assessee, all other grievances will be rendered academic. 11. However, before we part with the matter, we must deal with one procedural issue as well. While hearing of these appeals was concluded on 15th January 2020, this order is being pronounced today on th day of May, 2020, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that rule 34(5) of the Income Tax Appellate Tribunal Rules 1963, which deals with pronouncement of orders, provides as follows: (5) T....
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....inary" circumstances. 13. Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon'ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, an....