The ITO, (International Taxation), GANDHIDHAM V. M/s Mitsutor Shipping Agency Pvt Ltd, GANDHIDHAM

ITA 101/RJT/2011

• Counselvise Citation: 10124914 RSA 2011
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-01-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 30-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: J P SHAH
• Keywords: Residential status; Double taxation relief; Opportunity of being heard; Principle of natural justice

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , ,, , . .. . . .. . , ,, ,$ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. S RIVASTAVA, AM. ITA NO. 101/RJT/2011. / ASSESSMENT YEAR:-2009-10.. / V/S. THE I. T. O., (INTERNATIONAL TAXATION), GANDHIDHAM-KUTCH. ( +/ APPELLANT) M/S.MITSUTOR SHIPPING AGENCY PVT. LTD., 18/19 BAJAJ CHAMBERS, PLOT NO.12/B, GANDHIDHAM. ,-+/ RESPONDENT ./ / ASSESSEE BY SHRI J. P. SHAH, C.A. / / REVENUE BY SHRI AVINASH KUMAR, D.R. / / DATE OF HEARING 03-04-2012 / / DATE OF PRONOUNCEMENT 04 - 04-2012 / / / / ORDER . .. . . .. . , ,, , / T. K. SHARMA, J. M. : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 31-01-2011 OF CI T (A), GANDHINAGAR, AHMEDABAD FOR THE ASSESSMENT YEAR 20009-10. 2. BRIEFLY STATED THE FACTS ARE THAT FOR THE ASSESS MENT UNDER APPEAL, THE LOCAL AGENT MITSUTOR SHIPPING AGENCIES PVT. LTD. OF GANDH IDHAM HAS FILED PROVISIONAL RETURN ON 16-02-1009 FOR THE FREIGHT BENEFICIARY OF M/S. MUR SHIPPING DMC COMPANY OF UAE. THE ASSESSING OFFICER VIDE ORDER D ATED 21-12-2009 U/S.172(4) OF THE I.T. ACT ASSESSED THE LOCAL AGENT AS TAXABLE INCOME OF ITA NO 101/RJT/2011. 2 RS.15,08,266/-. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) HOLD THAT THE PROFIT ARISING OUT OF OPERATION OF SHIP IN QUESTION IN INTERNATIONAL WATER, BY THE ASSESSEE IS NOT SUBJECT TO TAXATION IN INDIA DUE TO APPLICABILITY OF ARTICLE 8 READ WITH ARTICLE 4 OF INDO-UAE DTAA. AGGRIEVED WITH TH E ORDER OF LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOL LOWING GROUNDS:- THE LD. CIT(A) ERRED IN LAW AND ON FACTS WHILE GRA NTING DTAA BENEFIT FOR PRINCIPAL OF UAE. THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY IGNORIN G COMPREHENSIVE DTAA AGREEMENT WITH UAE AN ARTICLE-4( 4) RESIDENT, ARTICLE-8 SHIPPING AND ARTICLE-29 (LIMITATION OF BE NEFITS). THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY IGNORIN G COMPREHENSIVE DTAA AGREEMENT WITH UAE AN ARTICLE-4 (B)- RESIDENT THAT A COMPANY WHICH IS INCORPORATED IN TH E UAE AND WHICH IS MANAGED AND CONTROLLED WHOLLY IN UAE THE LD. CIT(A) ERRED IN LAW AND ON FACTS CONSIDERIN G RESIDENTIAL STATUS OF PRINCIPAL WHILE IGNORED THE NATIONALITY O F DIRECTORS & SHARE HOLDERS COMPANY ARE OUT OF UAE. THE LD. CIT(A) ERRED IN LAW AND ON FACTS THAT PRINC IPAL COMPANY IS NOT SUBMITTED COPY AGM CALL TO CONVENE THE GENERAL ASSEMBLY. THE LD. CIT(A) ERRED IN LAW AND ON FACTS OF BARD CI RCULAR NO.1/2003 DATED 10.02.2003. THE LD. CIT(A) ERRED IN LAW AND ON FACTS ON DETERMI NING EFFECTIVE CONTROL AND MANAGEMENT OF THE PRINCIPAL-M/S. SHIPPI NG DMO CO;UAE. THE LD. CIT(A) ERRED IN LAW AND ON FACTS ON RELIANC E IS PLACE IN THE CASE OF MOHSINALLY ALIMOHAMMED RAFIK V. CIT [1995] 79 TAXMAN 75 (AAR NEW DELHI) THE STRICT INTERPRETATION OF A RTICLE 4 OF DTAA ONLY PERSONS WHO ARE ACTUALLY SUBJECTED TO TAX IN U A CAN BE TREATED AS RESIDENT OF UAE. THE LD. CIT(A) ERRED IN LAW AND ON FACTS ON IRC ISS UED BY THE MINISTRY OF FINANCE-UAE WITH DIRECTION TO ISSUED I N DUBAI WITHOUT ANY RESPONSIBILITY WHATSOEVER IN THE MINISTRY OF FI NANCE. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. ITA NO 101/RJT/2011. 3 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE, SHRI AVINASH KUMAR, D.R. APPEARED AND DREW OUT ATTENTION TO PARA -4.3 ON PAGE 7 OF IMPUGNED ORDER OF LD. CIT(A) WHICH READS AS UNDER:- 4.3 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E ASSESSEE WAS DIRECTED TO FILE PROOF OF BOARD MEETINGS BEING HELD IN UAE AND ALSO TO PROVE THE OPERATIONAL PRESENCE OF THE ASSES SEE IN THAT COUNTRY. THE ASSESSEE FILED THE FOLLOWING DETAILS/ EVIDENCES OF WIDE LETTER DATED 30-12-2010 ON THE SAME DATE. A) LIST OF PERMANENT EMPLOYEES WORKING IN UAE B) ORGANISATION CHART OF THE DUBAI OFFICE C) MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON 22-07- 2009 AT THE D UBAI OFFICE. ALTHOUGH THE EVIDENCES WERE FILED ON MY DIRECTIONS STILL FOR NATURAL JUSTICE, THESE WERE FORWARDED TO THE AO FOR HIS COM MENTS/REMAND REPORT VIDE THIS OFFICE LETTER DATED 31-12-2010. T HE AO WAS REQUESTED TO SUBMIT HIS COMMENTS BY 21-02-2011, BUT TILL DATE NO RESPONSE HAS BEEN RECEIVED. 4. THE LD. D.R. POINTED OUT THAT THE LD. CIT(A) PAS SED THE IMPUGNED ORDER ON 31-01-2011 COMPLETELY IGNORING THAT AO IS REQUIRED TO SUBMIT HIS COMMENTS BY 21-02-2011. SINCE THE LD. CIT(A) PASSED THE IMPUGN ED ORDER BEFORE THE EXPIRY OF DUE DATE BY WHICH AO IS REQUIRED TO SUBMIT HIS COMM ENTS/REMAND REPORT, THE IMPUGNED ORDER OF LD. CIT(A) BE SET-ASIDE AND HE BE DIRECTED TO DECIDE THE APPEAL OF THE ASSESSEE AFRESH AFTER GIVING OPPORTUN ITY OF BEING HEARD TO BOTH THE SIDES. 5. SHRI J. P. SHAH, LD. A.R. APPEARED FOR THE ASSES SEE COULD NOT CONTROVERT THE AFORESAID SUBMISSION MADE BY THE LD. D.R. 6. WE FIND CONSIDERABLE FORCE IN SUBMISSION MADE BY LD. D.R. FROM THE PERUSAL OF PARA-4.3 OF IMPUGNED ORDER (SUPRA), IT I S CLEAR THAT THE LD. CIT(A) ASKED THE A.O. TO SUBMIT HIS COMMENTS/REMAND REPORT BY 21 -02-2011. HE PASSED THE IMPUGNED ORDER ON 31-01-2011 WITHOUT WAITING FOR TH E EXPIRY OF TIME ALLOWED TO ITA NO 101/RJT/2011. 4 AO FOR FILING HIS COMMENTS/REMAND REPORT. THIS IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. WE THEREFORE, SET-ASIDE THE IMPUG NED ORDER OF LD. CIT(A) AND DIRECT THE AO TO SUBMIT HIS COMMENTS/REMAND REPORT . THE LD. CIT(A) WILL CONSIDER THE SAME AND RE-DECIDE THE APPEAL OF THE ASSESSEE AFRESH, AFTER GIVING OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 7. IN THE RESULT, FOR THE STATISTICAL PURPOSES, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED. /5 04/04 / 2012 7/ THIS ORDER PRONOUNCED IN OPEN COURT ON 04 / 0 4//2012. SD/- SD/- ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 5/ ORDER DATE 04 / 04/2012. /RAJKOT / // / ,: ,: ,: ,: ;: ;: ;: ;: / COPY OF ORDER FORWARDED TO:- 1.+ / APPELLANT- THE INCOME TAX OFFICER, INTERNATIONAL TAXATION, GANDHIDHAM 2.,-+ / RESPONDENT- M/S.MITSUTOR SHIPPING AGENCY PVT. LT D 3.? / DIT, INTERNATIONAL TAXATION,AHMEDABAD 4. ?A / CIT (A), GANDHINAGAR 5.:,, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.