M/s Overseas Transport Co. Ltd., Mumbai V. ADIT (IT) - 2(1), Mumbai

CO 107/MUM/2003

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5182 (ITAT-MUMBAI)
• Duration Of Justice: 17 year(s) 1 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-07-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 09-06-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVANEESH TIWARI
• Keywords: Transfer pricing; International transaction; Permanent establishment; Tax effect
• Section: 13; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBERAND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 3129/MUM./2002 ( ASSESSMENT YEAR : 1998 99 ) DY. DIRECTOR OF INCOME TAX INTERNATIONAL TRANSACTION CIRCL 2(1), MUMBAI . APPELLANT V/S OVERSEAS TRANSPORT CO. LTD. 102, TECHNOPOLIS KNOWLEDGE PARK 1 ST FLOOR, MAHAKALI CAVES ROAD CHAKALA, ANDHERI (EAST) MUMBAI 400 093 PAN . RESPONDENT C.O. NO.107/MUM./2003 ( ARISING OUT OF ITA NO.3129/MUM./2002 ) ( ASSESSMENT YEAR :1998 99 ) OVERSEAS TRANSPORT CO. LTD. C/O RSM& CO. 109 112, DALAMAL TOWER S NARIMAN POINT, MUMBAI 400 021 PAN . CROSS OBJECTOR (ORIGINAL RESPONDENT) V/S DY. DIRECTOR OF INCOME TAX INTERNATIONAL TRANSACTION CIRCL 2(1), MUMBAI . RESPONDENT (ORIGINAL APPELLANT) 2 OVERSEAS TRANSPORT CO. LTD. ITA NO. 7128 /MUM./200 4 ( ASSESSMENT YEAR : 2001 02 ) DY. DIRECTOR OF INCOME TAX INTERNATIONAL TRANSACTION CIRCL 3 ( 2 ), MUMBAI . APPELLANT V/S OVERSEAS TRANSPORT CO. LTD. 102, TECHNOPOLIS KNOWLEDGE PARK 1 ST FLOOR, MAHAKALI CAVES ROAD CHAKALA, ANDHERI (EAST) MUMBAI 400 093 PAN . RESPONDENT C.O. NO.163/MUM./2005 ( ARISING OUT OF ITA NO.7128/MUM./2004 ) ( ASSESSMENT YEAR :2001 02 ) OVERSEAS TRANSPORT CO. LTD. C/O RSM& CO. 109 112, DALAMAL TOWERS NARIMAN POINT, MUMBAI 400 021 PAN . CROSS OBJECTOR (ORIGINAL RESPONDENT) V/S DY. DIRECTOR OF INCOME TAX INTERNATIONAL TRANSACTION RANGE 3(2), MUMBAI . RESPONDENT (ORIGINAL APPELLANT) REVENUE BY : SHRI AVANEESH TIWARI ASSESSEE BY : SHRI DHANESH BAFNA A/W MS. HIRALI DESAI DATE OF HEARING 13 .07.2020 DATE OF ORDER 27.07.2020 O R D E R PER BENCH T HE AFORESAID APPEALS BY THE REVENUE AND CROSS OBJECTIONS BY THE ASSESSEE ARISE OUT OF TWO SEPARATE ORDERS PASSED BY THE LEARNED 3 OVERSEAS TRANSPORT CO. LTD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 1998 99 AND 2001 02. ITA NO.7128/MUM./2004 REVE NUE S APPEAL FOR A.Y. 2001 02 2. IN T HE AFORESAID APPEAL THE REVENUE HAS CHALLENGED THE ORDER DATED 15 TH JULY 2004, PASSED BY THE FIRST APPELLATE AUTHORITY. AT THE VERY OUTSET, SHRI DHANESH BAFNA, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT ON THE AMOUNT DISPUTED BY THE REVENUE IS BELOW THE MONETARY LIMIT OF ` 50 LAKH APPLICABLE TO APPEALS BEFORE THE TRIBUNAL, AS PER CBDT CIRCULAR NO.17 OF 2019, DATED 8 TH AUGUST 2019. FURTHER, HE SUBMITTED, THE APPEAL IS NOT PROTECTED UNDER ANY OF THE EXCEPTIONS PROVIDED UNDER THE SAID CIRCULAR. THUS, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, REVENUES AP PEAL BEING COVERED UNDER THE AFORESAID CIRCULAR IS NOT MAINTAINABLE. IN SUPPORT OF SUCH CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FURNISHED A WORKING OF THE TAX EFFECT. 3. SHRI AVANEESH TIWARI, THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY AGREE D WITH THE AFORESAID SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS PER THE WORKING SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE TAX EFFECT ON THE AMOUNT DISPUTED BY THE REVENUE IN 4 OVERSEAS TRANSPORT CO. LTD. THE PRESENT APPEAL WORKS OUT TO ` 3,93,116. WE FIND THAT AS PER CBDT CIRCULAR NO.17/2019, DATED 8 TH AUGUST 2019, IT STANDS CLARIFIED THAT THE REVISED MONETARY LIMIT OF ` 50 LAKH AS PER THE AFORESAID CIRCULAR WOULD ALSO APPLY TO ALL PENDING APPEALS. IN VIEW OF THE AFORESAID, REVENUES APPEAL DESERVES TO BE DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. C.O. NO.163/MUM./2005 [ARISING OUT OF REVENUES APPEAL IN I TA NO.7128/MUM./2004 FOR A.Y. 2001 02] 6. IN VIEW OF OUR DECISION IN REVENUES APPEAL BEING ITA NO.7128/ MUM./2004, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS, HENCE DISMISSED. 7. IN THE RESULT, ASSESSEES CROSS OBJECTION IS DISMISSED. ITA NO.3129/MUM./2002 REVENUES APPEAL FOR A.Y. 19 98 99 8. THIS APPEAL BY THE REVENUE ARISE S OUT OF THE ORDER DATED 26 TH MARCH 2002, PASSED BY THE FIRST APPELLATE AUTHORITY. THE GROUND OF CHALLENGE IN THE PRESENT APPEAL IS, WHETHER THE ASSESSEE HAS A PERMANENT ESTABLISHMENT (PE) IN INDIA UNDER ARTICLE 5 OF THE INDIA MAURITIUS TAX TREATY, SO AS TO BRING THE INCOME EARNED BY THE ASSESSEE TO TAX NET IN INDIA. 5 OVERSEAS TRANSPORT CO. LTD. 9. BRIEF FACTS ARE, THE ASSESSEE , A TAX RESIDENT OF MAURITIUS , IS ENGAGED IN SHIPPING BUSINESS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 11 TH SEPTEMBER 1998, DECLARING GROSS TOTAL INC OME OF US $ 3,88,810, AND CLAIMING BENEFIT OF ARTICLE 8 OF THE TAX TREATY. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ON VERIFYING THE RETURN OF INCOME FILED BY THE ASSESSEE NOTICED THAT IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN GROSS RECEIPT FROM FREIGHT AT US $ 51,84,106, AND APPLYING THE PROVISIONS OF SECTION 44B OF THE ACT H AS DETERMINED THE INCOME @ 7.5% OF THE RECEIPTS WHICH WORKED OUT TO US $ 3,88,810. IN SUPPORT OF HIS CLAIM OF BENEFIT UNDER THE TAX TREATY, THE ASSESSEE A LSO FURNISHED TAX RESIDENCY CERTIFICATE ISSUED BY THE TAX AUTHORITIES IN MAURITIUS. HAVING EXAMINED ASSESSEES CLAIM, THE ASSESSING OFFICER CALLED UPON THE ASS ESSEE TO SUBSTANTIATE ITS CLAIM THAT IT EFFECTIVE PLACE OF MANAGEMENT IS IN MAURITIUS. IN RESPON SE, THE ASSESSEE FILED ITS SUBMISSIONS IN SUPPORT OF ITS CLAIM. AFTER VERIFYING THE EXPLANATION SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD TWO SHAREHOLDERS WHO ARE RESIDENT OF UAE. FURTHER , THE SHIPPING ACTIVITY IN INDIA W AS CARRIED ON BY THE ASSESSEE THROUGH TWO AGENTS VIZ. PAREKH MARINE AGENCY PVT. LTD. (IN SHORT PAREKH) AND SAMSARA SHIPPING PVT. LTD. (IN SHORT SAMSARA). FURTHER, HE OBSERVED THAT MOST OF THE BOARD MEETINGS, EXCEPT VERY FEW, ARE HELD IN UAE. THUS, HE WA S OF THE VIEW THAT THE ASSESSEE IS NOT ELIGIBLE TO AVAIL 6 OVERSEAS TRANSPORT CO. LTD. BENEFIT UNDER ARTICLE 8 OF THE TAX TREATY. FURTHER, HE OBSERVED , THE ASSESSEE HAS ALSO NOT MADE ANY CLAIM UNDER ARTICLE 7 OF THE TAX TREATY. THUS, HE CONCLUDED THAT THE ASSESSEE HAS FIXED PLACE PE UN DER ARTICLE 5 (1) OF THE TAX TREATY, AS IT S PLACE OF EFFECTIVE MANAGEMENT IS IN INDIA. ADDITIONALLY, HE ALSO OBSERVED THAT THE ASSESSEE HAS ALSO PE IN INDIA UNDER ARTICLE 5 ( 5 ) THROUGH ITS DEPENDENT AGENTS VIZ. PAREKH MARINE AGENCY PVT. LTD. AND SAMSARA SHIP PING PVT. LTD. ACCORDINGLY, HE CONCLUDED THAT THE GROSS TOTAL INCOME OF US $ 3,88,810 WOULD BE SUBJECT TO TAX IN INDIA. THUS, HE DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT ` 1,55,52,400 AND RAISED TAX DEMAND ON SUCH INCOME. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER SO PASSED BY FILING APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 10. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF F A CTS AND MATERIAL ON RECO RD AS WELL AS JUDICIAL PRECEDENTS CITED BEFORE HIM, LEARNED COMMISSIONER (APPEALS) ULTIMATELY CONCLUDED THAT PAREKH MARINE AGENCY PVT. LTD. AND SAMSARA SHIPPING PVT. LTD., CANNOT BE CONSIDERED TO BE THE DEPENDENT AGENTS OF THE ASSESSEE AS BOTH THESE ENTITI ES HAV E THEIR INDEPENDENT BUSINESS AND HAVE EARNED COMMISSION INCOME FROM VARIOUS OTHER PRINCIP AL S AS WELL. THUS, HE HELD THAT THE AFORESAID TWO ENTITIES CANNOT BE CONSIDERED TO BE THE EXCLUSIVE AGENT OF THE ASSESSEE IN TERMS OF ARTICLE 5 ( 5 ) OF THE TAX TRE ATY. THUS, HE FINALLY CONCLUDED THAT THE ASSESSEE NOT HAVING A PE IN 7 OVERSEAS TRANSPORT CO. LTD. INDIA IS NOT TAXABLE AS PER ARTICLE 7 OF THE TAX TREATY. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 11. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE O BSERVATIONS OF THE ASSESSING OFFICER. FURTHER, DRAWING OUR ATTENTION TO THE GROUNDS RAISED, HE SUBMITTED , LEARNED COMMISSIONER (APPEALS) HAS NOT DEALT WITH THE ISSUE OF ASSESSEE HAVING A FIXED PLACE PE UNDER ARTICLE 5 ( 1 ) OF THE TAX TREATY. 12. THE LEARNED COU NSEL FOR THE ASSESSEE STRONGLY RELYING UPON THE OBSERVATIONS OF LEARNED COMMISSIONER (APPEALS) SUBMITTED , UNDER NO CIRCUMSTANCES, IT CAN BE SAID THAT THE ASSESSEE IS HAVING A FIXED PLACE PE IN INDIA. DRAWING OUR ATTENTION TO ARTICLE 5 ( 1 ) OF THE TAX TREATY, HE SUBMITTED , THE ASSESSEE HAS NO FIXED PLACE OF BUSINESS IN INDIA. HE SUBMITTED , THE EFFECTIVE CONTROL AND MANAGEMENT OF THE ASSESSEE HAS ALWAYS REMAINED IN MAURITIUS AND NEVER WAS IN INDIA. THUS, HE SUBMITTED , THERE CANNOT BE A FIXED PLACE OF BUSINESS T O TREAT IT AS PE IN INDIA. AS REGARDS THE FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS DEPENDENT AGENTS IN INDIA WHICH CONSTITUTE S PE UNDER ARTICLE 5 ( 5 ) OF THE TAX TREATY , D RAWING OUR ATTENTION TO ARTICLE 5 ( 5 ) OF THE TAX TREATY, THE LEARNED COUNS EL FOR THE ASSESSEE SUBMITTED THAT BOTH THE AGENTS EMPLOYED BY THE ASSESSEE IN INDIA ARE NOT EXCLUSIVELY DOING WORK OF THE ASSESSEE, BUT , THEY ARE INDEPENDENT ENTITIES AND THE WORK DONE FOR THE ASSESSEE WAS IN THE ORDINARY COURSE OF THEIR BUSINESS. TO 8 OVERSEAS TRANSPORT CO. LTD. EMPH ASIZE THE AFORESAID ASPECT, THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE OBSERVATIONS OF LEARNED COMMISSIONER (APPEALS) SHOWING VARIOUS STREAMS OF INCOME EARNED BY THE AGENT S WHICH WERE NOT RESTRICTED TO THE ASSESSEE ALONE. THUS, HE SUBMI TTED , SINCE THE ASSESSEE DOES NOT HAVE A PE IN INDIA EITHER UNDER ARTICLE 5( 1 ) OR 5( 5 ) AND THE AGENTS APPOINTED BY THE ASSESSEE IN INDIA ARE COVERED UNDER THE EXCEPTIONS OF ARTICLE 5( 5 ) , THE ASSESSEE CANNOT BE STATED TO BE HAVING A PE IN INDIA. THEREFORE, THE INCOME EARNED IS NOT TAXABLE IN INDIA AND THE ASSESSEE IS ELIGIBLE TO AVAIL THE BENEFIT OF THE TAX TREATY. IN SUPPORT OF HIS CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS: I) ADIT V/S BAY LINES (MAURITIUS), [2018] 91 TAXMANN.COM 110 (MUM.); II) DDIT V/S ARC LINE (MAURITIUS), ITA NO.1096/MUM./2010 (MUM.); AND III) ARC LINE (MAURITIUS) V/S DCIT, [2019] 112 TAXMANN.COM 95 (MUM.). 13. WE HAVE CONSIDERED RIVAL SUBMISSIONS IN THE LIGHT OF THE DECISIONS RELIED UPON AND PERUSED THE M ATERIAL ON RECORD. THE SHORT ISSUE ARISING FOR CONSIDERATION BEFORE US IS, WHETHER THE ASSESSEE HAS A FIXED PLACE PE IN INDIA OR A PE THROUGH DEPENDENT AGENTS ? ARTICLE 5 OF THE TAX TREATY DEFINES PE. A S PER ARTICLE 5( 1 ) , PE MEANS A FIXED PLACE OF BUSINESS THROUGH WHICH THE BUSINESS OF THE ENTERPRISE OF ONE CONTRACTING STATE IS WHOLLY OR PARTLY CARRIED OUT IN THE OTHER 9 OVERSEAS TRANSPORT CO. LTD. CONTRACTING STATE. ARTICLE 5( 2 ) ILLUSTRATES THE FACILITIES W HICH CAN BE CONSIDERED AS PE , SUCH AS , PLACE OF MANAGE MENT , A BRANCH, AN OFFICE, A FACTORY, A WORKSHOP, A WAREHOUSE IN RELATION TO A PERSON PROVIDING STORAGE FACILITIES FOR OTHERS AND SO ON AND SO FORTH AS PROVIDED IN ITEMS (A) TO (J) OF THE AR TICLE 5( 2 ) OF THE TAX TREATY. THUS, FIRST AND FOREMOST IT IS NECESSARY TO UNDERSTAND THE MEANING OF THE TERM FIXED PLACE OF BUSINESS AS USED IN ARTICLE - 5( 1 ) . THE TESTS REQUIRED TO SATISFY THE EX ISTENCE OF A PE UNDER ARTICLE - 5( 1 ) ARE - THERE MUST BE A BUSINESS OF THE ENTERPRISE OF ONE CONTRACTING STATE IN THE OTHER CONTRACTING STATE, THERE MUST BE PLACE OF BUSINESS IN THE OTHER CONTRACTING STATE, THE PLACE OF BUSINESS MUST BE AT THE DISPOSAL OF THE ENTERPRISE, THE PLACE OF BUSINES MUST BE FIXED AND THROUGH THIS FIXED PLACE OF BUSINESS T HE ENTERPRISE EITHER WHOLLY OR PARTLY CARRIES ON ITS BUSINESS. FACTS ON RECORD CLEARLY INDICATE THAT THE ASSESSEE DOES NOT POSSESS A FIXED PLACE OF BUSINESS TO EITHER WHOLLY OR PARTLY CARRY OUT ITS BUSINESS. THERE IS NO PERMANENT INFRASTRUCTURE, OFFICE, SU PERVISORY STAFF, TANGIBLE AND INTANGIBLE ASSETS IN INDIA TO CONSTITUTE A FIXED PLACE PE. THERE IS NOTHING ON RECORD TO ESTABLISH THAT THE ASSESSEE CARRIES ON ITS CORE BUSINESS ACTIVITIES IN INDIA THROUGH FIXED PLACE OF BUSINESS. THOUGH, THE ASSESSING OFFICE R HAS ALLEGED THAT THE EFFECTIVE PLACE OF MANAGEMENT IS IN INDIA, HOWEVER, HE HAS MISERABLY FAILED TO PROVE SUCH FACT THROUGH COGENT EVIDENCE. THE ALLEGATION OF THE ASSESSING OFFICER THAT THE DIRECTORS OF THE ASSESSEE COMPANY ARE STAYING IN UAE AND ARE 10 OVERSEAS TRANSPORT CO. LTD. EXE RCISING THEIR CONTROL OVER THE AFFAIRS OF THE COMPANY FROM UAE , UNDER NO CIRCUMSTANCES , CREATES A FIXED PLACE PE IN INDIA AS NONE OF THE CONDITIONS OF ARTICLE 5( 1 ) OF THE TAX TREATY ARE SATISFIED. THUS, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT THE ASSESSEE HAS A FIXED PLACE PE IN INDIA UNDER ARTICLE 5( 1 ) OF THE TAX TREATY . 14. AS REGARDS THE CONTENTION OF THE REVENUE THAT THE ASSESSEE HAS A PE IN INDIA THROUGH TWO DEPENDENT AGENTS VIZ. PAREKH MARINE AGENCY PVT. LTD. AND SAMSARA SHIPPING PVT. LTD ,L ET US EXAMINE THIS A SPECT KEEPING IN VIEW ARTICLE 5 (4) AND 5 ( 5 ) OF THE TAX TREATY. ARTICLE 5( 4 ) OF THE TAX TREATY WHICH OVERRIDES ARTICLE 5(1) AND (2) SAYS, WHERE A PERSON ACTS IN A CONTRACTING STATE FOR OR ON BEHALF OF AN ENTERPRISE OF THE OTHER CONTRACTING STATE, SUCH PERSON SHALL BE DEEMED TO BE A PE IN RESPECT OF ANY ACTIVITIES SUCH PERSON CARRIES ON FOR THE ENTERPRISE. HOWEVER, AN EXCEPTION H AS BEEN CARVED OUT IN ARTICLE - 5( 5 ) TO EXCLUDE AN AGENT FROM BE ING TREATED AS A PE, IF SUCH AGENT IS OF AN INDEPENDENT STATUS AND PROVIDES SERVICES TO THE ENTERPRISE IN THE ORDINARY COURSE OF ITS BUSINESS. IT IS FURTHER CLARIFIED THAT IF THE ACTIVITIES OF SUCH AGENT ARE EXCLUSIVELY DEVOTED FOR AND ON BEHALF OF TH E EN TERPRISE, IT WILL NOT BE CONSIDERED AS AN AGENT OF IND EPENDENT STATUS UNDER ARTICLE 5( 5 ) . 15. K EEPING IN PERSPECTIVE ARTICLE - 5( 5 ) OF THE TAX TREATY I F WE EXAMINE THE STATUS OF PAREKH MARINE AGENCY PVT. LTD. AND SAMSARA 11 OVERSEAS TRANSPORT CO. LTD. SHIPPING PVT. LTD. VIS A VIS THE ASSESS EE, IT WOULD CLEARLY EMERGE THAT WHILE PROVIDING SERVICES TO THE ASSESSEE , BOTH THESE ENTITIES ARE ACTING IN THE ORDINARY COURSE OF THEIR BUSINESS AND ARE HAVING THEIR INDEPENDENT STATUS. AS COULD BE SEEN FROM THE FACTS ON RECORD AS WELL AS OBSERV A TIONS MADE BY LEARNED COMMISSIONER (APPEALS), DURING THE YEAR UNDER CONSIDERATION, SAMSARA SHIPPING PVT. LTD., HAS PROVIDED SERVICE S TO SIX SHIPPING COMPANIES INCLUDING THE ASSESSEE AND OUT OF THE TOTAL COMMISSION EARNED OF ` 3,83,20,806, IT RECEIVED AN AMOUNT O F ` 46,53,998, FROM THE ASSESSEE WHICH CONSTITUTES A M EAGRE 12.14% OF THE TOTAL INCOME EARNED BY SAMSARA SHIPPING PVT. LTD. FROM VARIOUS PRINCIPALS. THE SAME IS THE CASE WITH PAREKH MARINE AGENCY PVT. LTD. AS OBSERVED BY LEARNED COMMISSIONER (APPEALS) , DURI NG THE YEAR THIS ENTITY HAS RECEIVED INCOME OF ` 629.74 LAKH FROM VARIOUS PRINCIPALS , OUT OF WHICH , AN AMOUNT OF ` 17.62 LAKH WAS EARNED FROM THE ASSESSEE WHICH CONSTITUTES MERELY 2.79% OF THE TOTAL INCOME EARNED BY THE SAID PARTY . THUS, THE AFORESAID FACT S CLEARLY ESTABLISH ED THAT BOTH PAREKH MARINE AGENCY PVT. LTD. AND SAMSARA SHIPPING PVT. LTD., WERE NOT EXCLUSIVELY WORKING FOR THE ASSESSEE AND ARE HAVING THEIR INDEPENDENT STATUS. FURTHER, THE SERVICES PROVIDED TO THE ASSESSEE BY THEM ARE IN THE ORDINARY COURSE OF THEIR BUSINESS. THAT BEING THE CASE, THE EXCEPTIONS PROVIDED UNDER ARTICLE 5( 5 ) OF THE TAX TREATY WOULD BE CLEARLY APPLIABLE. HENCE, NEITHER PAREKH MARINE AGENCY PVT. LTD. NOR SAMSARA SHIPPING PVT. LTD. CAN BE CONSIDERED AS DEPENDENT AGEN TS SO 12 OVERSEAS TRANSPORT CO. LTD. A S TO CONSTITUTE PE IN INDIA. THE CO ORDINATE BENCH IN BAY LINES MAURITIUS (SUPRA) WHILE DECIDING IDENTICAL ISSUE INVOLV ING MORE OR LESS SIMILAR FACTS , HAS HELD THAT IF THE AGENT WAS NOT EXCLUSIVELY ACTING ON BEHALF OF THE ASSESSEE ENTERPRISE, IT CANNOT BE CONSIDERED AS DEPENDENT AGENT SO AS TO CONSTITUTE A PE. THUS, THE RATIO LAID DOWN IN THE AFORESAID DECISION WOULD ALSO SUPPORT ASSESSEE S CASE . THE OTHER DECISIONS RELIED UPON BY TH E LEARNED COUNSEL FOR THE ASSESSEE ALSO EXPRESS SIMILAR VIEW. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED COMMISSIONER (APPEALS) HOLDING THAT THE ASSESSEE DOES NOT HAVE A PE IN INDIA EVEN UNDER A RTICLE - 5( 5 ) OF THE TAX TRE ATY, HENCE, IS ELIGIBLE TO AVAIL THE BENEFITS OF THE TAX TREATY . MORE SO, CONSIDERING THE FACT THAT THE TAX AUTHORITIES IN MAURITIUS HAVE ISSUED TAX RESIDENCY CERTIFICATE IN FAVOUR OF THE ASSESSEE. GROUNDS NO. 1 AND 2 ARE DISMISSED. 16. AS REGARDS THE GROUND NO.3 RAISED BY THE REVENUE RELYING UPON THE DECISION OF THE CO ORDINATE BENCH IN BHL OPERATIONS B.V., NETHERLAND, WE MUST OBSERVE THAT THE AFORESAID ASPECT HAS BEEN DEALT WITH BY THE CO ORDINATE BENCH IN BAY LINES MAURITIUS (SUPRA) WHEREIN THE BENCH HAS OB SERVED THAT IN VIEW OF THE DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT IN DCIT(IT) V/S B4U INTERNATIONAL HOLDINGS LTD., [2012] 23 TAXMANN.COM 372 (BOM.), THE DECISION RENDERED IN 13 OVERSEAS TRANSPORT CO. LTD. DHL OPERATIONS B.V., NETHERLAND (SUPRA) IS NO MORE A GOOD LAW. THEREFO RE, TH IS GROUND IS ALSO DISMISSED. 17. IN THE RESULT, REVENUES APPEAL IS DISMISSED. C.O. NO.107/MUM./2003 BY ASSESSEE FOR A.Y. 1998 99 ARISING OUT OF REVENUES APPEAL IN ITA NO.3129/MUM./2002 A.Y. 1998 99 18. IN VIEW OF OUR DECISION IN REVENUES APPEAL BEING ITA NO. 3129 / MUM./200 2 , THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS, HENCE LIABLE TO BE DISMISSED. 19. IN THE RESULT, ASSESSEES CROSS OBJECTION IS DISMISSED. 20. TO SUM UP, REVENUES APPEALS AND ASSESSEES CROSS OBJECTIONS ARE DISMISSED. OR DER PRONOUNCED THROUGH NOTICE BOARD UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962 , ON 27.07.20 2 0 SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 27.07.2020 14 OVERSEAS TRANSPORT CO. LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI