AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 1260
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.... addition on account of IHC on the ground that same is chargeable to tax in India and accordingly brought to tax @ ad-hoc 10% deemed profit rate of taxable receipt; 3. erred in making an addition on account of IHC by denying the benefit of Article 9 of India -France Double Taxation Avoidance Agreement ('India-France DTAA') since IHC is directly connected to and ancillary to the transportation of cargo in international traffic; 4. erred in not following the binding decision of jurisdictional Bombay High Court ('HC') in the case of Safmarine Container Lines N.V. (ITA No. 952 of 2011 and 147 of 2009 dated 17 January 2013) on the ground that said decision is further challenged before the Hon'ble Supreme Court of India ('SC') when the SC has dismissed the revenue appeal; 5. erred in not taking cognizance of the decision of jurisdictional Tribunal in the Appellant's own case for AY 2012-13 to AY 2014-15 & AY 2015-16, wherein the Hon'ble Tribunal has held that IHC shall form part of income from operation of ships in international traffic and accordingly, not taxable in India as per Article 9 of India France DTAA; 6. without prejudice to the above, even if IHC is taxable in Ind....
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.... agent of the Appellant in India and, such dependent agent constitutes a PE of the Appellant in India, without appreciating the facts and circumstance of the case; 14. erred in not appreciating that CCAI cannot be considered a dependent agent of the appellant as per Article 5 of the IndiaFrance DTAA since the transactions between the Appellant and CCAI are at arm's length; 15. without prejudice to the above, failed to appreciate that the agent of the Appellant in India had been compensated at arm's length and hence no further attribution could be made towards Income of the Appellant liable to tax in India; Non-taxability of income in the nature of IT support services 'FTS' amounting to INR 7 60 05 380/- 16. erred in not examining and appreciating that income earned in the nature of IT support fees [Fees for Technical Services ('FTS')] amounting to INR 7,60,05,380/- from its Agency company (CCAI) is not chargeable to tax in India by virtue of the beneficial not provisions of Article 9 of India-France DTAA read along with protocol having the Most Favoured Nation ('MFN') clause as the same does not make available any technical knowledge, experience of skill etc. to the Ind....
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....re the Ld DRP which was pleased to reject the same vide directions dated 12/05/2021, issued under section 144C(5) of the Act. And in doing so, it followed the earlier directions issued in assessee's own case for preceding assessment years. In conformity to the directions issued by Ld. DRP, the Assessing Officer ("AO") passed the final assessment order dated 19/05/2022 under section 143(3) read with section 144C(13) of the Act (hereinafter the final assessment order). Being aggrieved, the assessee is in appeal before us. 4. The issue arising in ground No. 1 is general in nature and therefore need no separate adjudication. 5. The issue arising in grounds No. 2 - 6, raised in assessee's appeal, is pertaining to taxability of Inland Haulage Charges (in short ''IHC''). 6. The brief facts of the case pertaining to this issue, as emanating from the records, are during the year under consideration, out of the total Revenue of Rs.48,50,25,23,670/-, the assessee had collected a sum of Rs.377,56,83,161/-, from its customers on account of IHC. These charges were collected towards transportation of goods from the exporter's warehouse to the port of loading and vice versa. As per the assessee....
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....ilar ground was raised by the assessee before the Tribunal. The Tribunal following the order of Co ordinate Bench in assessee's own case in ITA No.6649/Mum/2017(supra) decided the issue in favour of the assessee. The relevant extract of the findings of Tribunal in assessment year 2015-16 are reproduced hereunder: "7. Having heard the parties, we find that while deciding identical issue in assessee's own case in the assessment year 2012-13, learned DRP had categorically held that the revenue earned from IHC is part of shipping business in International Waters, hence, covered under Article-9 of the Tax Treaty. However, subsequently, while deciding the identical issue in assessee's own case for the assessment years 2013-14 and 2014-15, learned DRP took a contrary view and decided the issue against the assessee. When the appeals preferred by the Revenue and the assessee for the aforesaid assessment years came up for consideration before the Tribunal, the Tribunal in ITA no.6649/ Mum./2017 & Ors., dated 14th March 2018, decided the issue in favour of the assessee holding as under: "15. We have heard rival contentions on this issue and perused the record. We notice that t....
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....ee and therefore, not chargeable to tax. The Hon'ble Bombay High Court held that the amount received by the assessee for using the communication system by the agents is part of shipping business and could not be captured under any other provisions of the Income tax Act except DTAA. The High Court further held that it does not amount to technical service. Finally the High Court held that the amounts paid by the agents for using the communication system arose out of the shipping business and cannot be brought to tax. 19. The decision so rendered by Hon'ble Bombay High Court in the context of India-Denmark DTAA clearly shows that the ancillary activities connected with the shipping business are also included in the shipping business. The above said decision has been followed by the co-ordinate bench in the case of same assessee, viz., A.P.Moller Maersk A/S (ITA No.1798/Mum/2015 dated 15-02 2017) for AY 2011-12 to hold that the Inland Haulage charges received by that assessee shall also form part of shipping income from international traffic. The decision so rendered for AY 2011-12 was followed by the coordinate bench in the above said assessee's case in AY 2012-13 in ITA....
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.... the plea of the assessee and direct the AO to delete the addition on account of IHC. As a result, grounds No. 2 - 6 raised in assessee's appeal are allowed. 11. The issue raised in grounds No. 7 - 12, by assessee is pertaining to taxability of freight charges from transportation of cargo through feeder vessels. 12. The brief facts pertaining to this issue, as emanating from the record, are that during the course of scrutiny proceedings, it was noticed by the AO that the assessee was transporting the goods by means of feeder vessels which were neither owned nor chartered by the assessee company and in doing so, it earned freight income of Rs.14,15,60,433/- which is taxable income. Therefore, he brought to tax the income of assessee from feeder vessels without any (assignment loaded on another vessels which was worked out to be Rs.1,06,17,032/- and 7.5% of it was computed at Rs.14,15,60,433/-. The Ld. DRP rejected the objections filed by the assessee, against the aforesaid addition, by following its directions rendered in assessee's own case for preceding assessment years, after noting that in the year under consideration facts are pari materia to the earlier assessment years and ....
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....nate Bench rendered in assessee's own case, we hold that freight charges received from transportation of cargo through feeder vessels being part of shipping income in International Traffic is covered under Article-9(1) of the India-France Tax Treaty, hence, not toxable in India. In fact, the aforesaid view of the Tribunal was upheld by the Hon'ble Jurisdictional High Court while dismissing Revenue's appeal in assessee's own case in Assessment Year 2002-03 in Income Tax Appeal no. 2175 of 2009, vide judgment dated 6th August 2012. Accordingly, these grounds are allowed." [Emphasized by us) No contrary material has been brought to our notice to take a different view. Following the order of Co-ordinate Bench on this issue, ground No. 6 to 10 of the appeal are allowed for similar reasons." 16. We note that the issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee for preceding assessment years. The Ld. DR could not show us any reason to deviate from the aforesaid decision since he could not point out any change in facts or law vis-a-vis earlier assessment years. Thus, respectfully following the order passed by th....
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.... assessee's own case for preceding assessment years. The relevant findings of the coordinate bench of the Tribunal, in aforesaid decision, are as under: "10. Both sides heard. We find that in assessment year 2015-16 Coordinate Bench following the decision of Tribunal in assessee's own case for assessment year 2012-13 to 2014-15 held as under: "20. As could be seen from the aforesaid decision, the Tribunal has held that if the Indian agent has been remunerated at arm's length, it cannot be considered as agency P.E. of the assessee. It is further relevant to observe, in the advance pricing agreement between the CMA CGM Agencies India Pvt. Ltd and CBDT entered on 24th November 2015, it has been agreed that remuneration @ 18% between the assessee and its indian agent has to be considered to be at arm's length, in the facts of the present case, it has been factually demonstrated before us that the payment made by the assessee to its indian agent is at the arm's length price of 18%. That being the case, following the aforesaid decision of the Co-ordinate Bench, we hold that the Indian Agent of the assessee cannot be considered as an agency PE. Thus, grounds are decide....
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....e earned in the nature of IT support fees (being FTS) amounting to INR 7,60,05,380/- from the company's Indian Agency company [i.e. CCAI] is not chargeable to tax in India by virtue of the beneficial provisions of Article 9 of India-France tax treaty and for such a preposition it relied on the decision of Tribunal (Pune) in the case of its own Indian Agency company, CCAI (ITA No.2314/PUN/2017 dated 2 January 2020) wherein the Tribunal while adjudicating similar payment for AY 2012-13 has held that the said FTS paid by the assessee is not chargeable to tax in India as per the beneficial provisions of India-France tax treaty; and hence, on the same reasoning, the assessee was not liable to withhold any tax on the same in India. After hearing the assessee, the AO didn't accept the contention. According to AO, the assessee has filed its return of income on 30th Nov 2018 which is well before the due date prescribed u/s139 (1) of the Act and further the assessee has not filed the revised return of income. Therefore, according to AO, without filing a revised return of income, the claim cannot be entertained by him in view of the judgement of Hon'ble Supreme Court's decision in the cas....