2026 (8) TMI 61

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....Sudarshan Lamba, AOR For the Respondent(s): Ms. Meera Mathur, AOR, Mr. Anand Varma, AOR, Ms. Apoorva Pandey, Adv., Mr. Ayush Gupta, Adv., JUDGMENT PER S.V.N. BHATTI, J. 1. The Civil Appeals arise from the Judgment and Order dated 01.07.2011, in Income Tax Appeal Nos. 485, 486 and 683 of 2010 (for short, 'impugned Order') of the High Court of Judicature at Bombay. The Director of Income Tax, International Taxation (for short, 'the Revenue') is the Appellant. 2. M/s Star Cruises (India) Pvt. Limited is the Assessee/Respondent. The Civil Appeals relate to the assessment years 2006-07, 2007-08, and 2008-09. 3. The Superstar Libra Ltd. (for short, 'SLL'), a non-resident entity, operated a cruise known as "Superstar Libra" in India....

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....r entertainment and hospitality and does not include carriage of passengers/goods within the meaning of section 44B of the Act. Consequent to such view, the Assessing Officer estimated deemed income at 25% of the cruise fare collected for and on behalf of SLL, not at 7.5% as claimed by the Assessee. 6. The Assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals) [for short, 'CIT(A)'], Mumbai. By Order dated 15.06.2007, the CIT(A) allowed the Appeal and set aside the Assessment Order dated 30.03.2007. 7. The Appellate Authority appreciated all the circumstances of the case under Section 44B of the Act and held that the deemed income of SLL was estimated at 7.5% of the receipts received from the cruise fare.....

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....come estimated by the Assessing Officer. 9. The Revenue carried the matter in appeal before the High Court, as noted above, and through the impugned Order, the Appeal(s) have been dismissed. Hence, the Civil Appeals. 10. Leave has been granted in the matter(s) on the following two questions, namely:- "(i) Whether on the facts and circumstances of the case and in law, the Hon'ble High Court was justified in upholding the Hon'ble ITAT'S decision that assessee is engaged in the business of operation of Ships and is entitled to be assessed under Section 44B of the Income Tax Act? (ii) Whether on the facts and circumstances of the case and in law, the Hon'ble High Court was justified in upholding the Hon'ble ITAT'S decisi....

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....requirements are satisfied by the Assessee. The inference drawn by the Revenue on the application of the word 'carriage' in the circumstances of the case is untenable and ex facie illegal. The Assessing Officer has restricted the meaning of the word 'carriage' by observing that, to come within the meaning of carriage, the carriage must necessarily be from Port A to Port B. The CIT(A) has rejected this limited interpretation of the word 'carriage'. The Assessee has established that the primary grounds for attracting Section 44B of the Act are complied with, and that making an ancillary purpose the dominant purpose, particularly with a restricted meaning of the word 'carriage', is erroneous. There is no gainsaying that a round trip of passeng....