TaxTMI 
TaxTMI 
2021 (5) TMI 151
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.... 3. To adjudicate on this issue, only a few material facts are required to be taken note of. The assessee before us is said to be a limited company incorporated in the UAE, a tax resident of the UAE and engaged in the business of services like ship chartering, freight forwarding, sea cargo services, shipping line agents. The uncontroverted stand of the assessee, as noted by the Assessing Officer, is that the assessee charters the ships for use in transportation of goods and containers in international waters, including to Kandla and Mundra ports as indeed other ports in India and elsewhere. During the relevant previous year, the assessee had received Rs. 64,41,25,715 on account of total freight collection, including prepaid collections, which, under section 44B r.w.s. 172, result in a taxable income, computed @ 7.5%, of Rs. 4,83,09,429. The assessee, however, claimed that as the assessee is a tax resident of the UAE and as, under the Indo UAE tax treaty, the profits derived by an enterprise of a UAE or India from the operation by that enterprise of ships in international traffic shall be taxable only in the respective jurisdiction, the assessee is not to pay any tax in India. Th....
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.... that as the assessee has not given details of the actual beneficiaries of TRCs of the partners, such a non-furnishing of details is to escape from expositing the true structure and taking undue benefit of the Indo UAE tax treaty. The Assessing Officer thus concluded that the assessee is not entitled to the benefits of the Indo UAE tax treaty, and, accordingly, issued a draft assessment order holding that the income of Rs. 4,83,09,430 is taxable in India. Aggrieved, the assessee raised objections before the Dispute Resolution Panel, but without any success. The assessee had also filed additional detailed evidences before the DRP in support of its various submissions, including the submission that the assessee is a company and not a partnership firm, and a remand report from the Assessing Officer was also called on the additional evidence. The learned DRP nevertheless confirmed the action of the Assessing Officer and observed as follows: It is noted that the appellant company is in shipping business since year 2000. The appellant expanded its shipping business operations in June, 2013. Before 2013, the Appellant was a shipping agent. The assessee company commenced shipping ....
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....d in Auditors Report 16.04.2001) and misguide the department. This clearly indicates that the company was controlled only by the Greek National Mr. Dimosthensis Lalagiannis. In the rejoinder also, the assessee has not rebutted this finding of the AO. e. It is claimed by the assessee that during the year under consideration, Mr. Dimosthenis Lalagiannis, a Greek national who is based in UAE, was the designated Manager, managing the affairs of the Company. Mr. Dimosthensis Lalagiannis holds 25% of the share capital of the LLC. However, the AO has brought enough arguments and facts to hold that there was no other manager or controller of the assessee. There is no evidence that this person was in UAE for a period in excess of 183 days. f. It is also claimed that all the employees of the assessee company have been issued work permits by the Ministry of Labour, UAE. This claim of the assessee is false. The assessee had not given any details of its employees to the AO pertaining to year under discussion. Further, the assessee did not file any details during the remand proceedings also. The assessee tried to surreptitiously claim that all its employees were reside....
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....ther the assessee appellant can be said to be a "resident" of the UAE, treaty partner jurisdiction, which is a foundational requirement for availing the treaty benefits in question. Article 4(1) defines a resident, inter alia, "in the case of the United Arab Emirates: ........a company which is incorporated in the UAE and which is managed and controlled wholly in UAE". While at the stage of initial proceedings before the Assessing Officer, it was AO's observation that the assessee entity is a partnership firm, we have noted that at the stage of proceedings before the Dispute Resolution Panel, it was pointed out by the assessee that the assessee is a limited liability company under the UAE laws, that it has duly obtained the requisite licence from the Department of Economic Development, that its annual accounts and audits are in accordance with the UAE laws and that its memorandum of association and articles of association were also placed on record. The details of the company incorporation are on record, including in the paper-book, and the learned Departmental Representative did not even dispute these pieces of evidence. There is nothing now, or even at the assessment stage, to co....
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....ors of the companies which claim such a residence status. As for the companies, the only test for a company being termed as 'resident of UAE' is that it should be incorporated in UAE and wholly managed and controlled in the UAE. The assessee company has its office in UAE, it is in business there since 2000, it has expatriate employees who have been given a work permit to work in UAE for the asseee company, the main driving force of the company and its director is an expatriate resident in the UAE. 8. Under these circumstances, there seems to be no basis, except for surmises and conjectures, to suggest that the company is not "wholly managed or controlled from the UAE". As for the inconsistencies pointed out by the Assessing Officer in the financial statement disclosures, even if in one statement an accounting disclosure about director's remuneration is given and in another statement for another year such an accounting disclosure is left out, that would not mean that the company was not managed from the UAE. The assessee has provided reasonable evidence in support of the stand that the business was wholly and mainly controlled from the UAE. The fact that the assessee could not gi....