DCIT (IT) 2(2)(2), MUMBAI V. HOYER GLOBAL TRASNPORT BV, MUMBAI

ITA 1154/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3895 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Assessment Year: 2012-2013
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HIMANSHU SHARMA
• Keywords: Double taxation relief; Permanent establishment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 1154/MUM/2017 : A.Y : 2012 - 13 DCIT(IT) - 2(2)(2), MUMBAI (APPELLANT) VS. M/S. HOYER GLOBAL TRANSPORT BV (FORMERLY HOYER ODFJELL BV) C/O SAMSARA SHIPPING PVT. LTD., 101/102, TEHNOPOLIS KNOWLEDGE PARK, MAHAKALI CAVES ROAD, ANDHERI (E), MUMBAI 400 093. PAN : AAACH9241F (RESPONDENT) APPELLANT BY : SHRI HIMANSHU SHARMA RESPONDENT BY : SHRI NINAD PATADE DATE OF HEARING : 09/08/2018 DATE OF PRONOUNCEMENT : 09/08/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL FILED BY THE REVENUE PERTAINING TO ASSESSMENT YEAR 201 2 - 1 3 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A) - 5 6 , MUMBAI DATED 2 3 . 0 6 .201 5 , WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 144C(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 2 7 .0 5 .201 5 . 2. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 2 ITA NO. 1154/MUM/2017 M/S. HOYER GLOBAL TRANSPORT BV 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO DELETE ADDITION OF RS.2,34,58,436/ - , WITHOUT APPRECIATING THE FACTS OF THE CASE THAT SAMSARA SHIPPING PVT. LTD. ACTS AS A DEPENDENT AGENT AND DOES ALL THE WORKS AND ACTIVITIES ON BEHALF OF THE ASSESSEE COMPANY, AND THEREFORE CONSTITUTED THE PE OF THE ASSESSEE IN INDIA? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED BY DECIDING THE ISSUE OF PE BASE D ON THE GENERAL VOCATIONAL PROFILE, I.E. GROSS REVENUES OF THE AGENT WHEN THE ORDINARY COURSE OF BUSINESS TEST FOR ASCERTAINING EXISTENCE OF PE SHOULD BE ON AGENTS STATUS OF BEING CONTAINERIZED CARGO - BULK HANDLER TO THE ASSESSEE AND NOT THE ENTIRE GAMU T OF ACTIVITIES OF THE ENTITY AS A WHOLE? 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. IN ORDER TO APPRECIATE THE CONTROVERSY IN THIS APPEAL, THE RELEVANT FACTS ARE THAT THE RESPONDENT - ASSESSEE IS A COMPANY WHICH IS INCORPORATED IN AND IS A TAX RESIDENT OF NETHERLANDS. IT IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF CONTAINERISED CARGO. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE EARNED AN INCOME OF RS.31,27,79,145/ - FROM INDIAN OPERATIONS, WHICH WAS CLAIMED TO BE NON - TAXABLE IN INDIA IN VIEW OF ARTICLE 5 OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA AND NETHERLANDS. SO, HOWEVER, THE ASSESSING OFFICER NOTED THAT ASSESSEE - COMPANY WAS BEING ASSISTED BY ONE, M/S. SAMSARA SHIPPING PVT. LTD., AN INDIAN COMPANY, IN ITS COMMERCIAL OPERATIONS IN INDIA. THE ASSESSING OFFICER TOOK THE STAND THAT M/S. SAMSARA SHIPPING PVT. LTD. WAS LIABLE TO BE TREATED AS ASSESSEES PERMANENT ESTABLISHMENT (PE) IN INDIA AND THUS, THE AFORESAID PROCEEDS WERE LIABLE TO BE TAXED IN INDIA ALSO. THE STAND OF THE ASSESSEE WAS TO THE CONTRARY, WHICH WAS TO THE EFFECT THAT M/S. SAMSARA SHIPPING PVT. LT D. WAS ITS COMMERCIAL AGENT AND WAS AN INDEPENDENT ENTITY WHICH WAS NEITHER 3 ITA NO. 1154/MUM/2017 M/S. HOYER GLOBAL TRANSPORT BV RELATED TO THE ASSESSEE NOR TO ANY OF ITS OTHER GROUP CONCERNS. IT WAS ALSO ASSERTED THAT NEITHER THE ASSESSEE NOR ANY OF ITS GROUP CONCERNS HAD ANY OWNERSHIP INTEREST IN M/S. SAM SARA SHIPPING PVT. LTD. AND THAT THE AGENCY SERVICES RENDERED BY THE SAID INDIAN CONCERN WAS IN ITS ORDINARY COURSE OF BUSINESS. FOR ALL THE AFORESAID REASONS, IT WAS ASSERTED BY THE ASSESSEE THAT M/S. SAMSARA SHIPPING PVT. LTD. COULD NOT BE CONSTRUED AS ITS PE IN INDIA. THE ASSESSING OFFICER, HOWEVER, DIFFERED WITH THE ASSESSEE AND HELD THAT THE ASSESSEE - COMPANY HAD A PE IN INDIA AND ACCORDINGLY, ESTIMATED ASSESSEES INCOME FROM FREIGHT IN INDIA @ 7.5% OF THE TOTAL RECEIPTS OF RS.31,27,79,145/ - THEREBY C OMPUTING ASSESSEES TOTAL INCOME AT RS.2,34,58,436/ - . ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO NOTED THAT THE STAND OF THE ASSESSING OFFICER WAS SIMILAR TO THE STAND OF THE ASSESSING AUTHORITIES IN THE EARLIER YEARS. THE CIT(A) TOOK N OTE OF THE FACT THAT FOR ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 IN ASSESSEES OWN CASE, HIS PREDECESSOR VIDE ORDER DATED 27.08.2013 UPHELD THE STAND OF THE ASSESSEE IN LIGHT OF SIMILAR ORDERS FOR ASSESSMENT YEARS 2003 - 04, 2004 - 05 AND 2011 - 12 DATED 18.12.2015 . FOLLOWING SUCH PRECEDENTS, THE CIT(A) HELD THAT M/S. SAMSARA SHIPPING PVT. LTD. WAS AN AGENT OF THE ASSESSEE IN AN INDEPENDENT STATUS, WHICH DID NOT QUALIFY IT FOR BEING TREATED AS A PE OF ASSESSEE IN INDIA. THUS, HE UPHELD THE STAND OF ASSESSEE THAT T HE IMPUGNED RECEIPTS WERE NOT LIABLE TO BE TAXED IN INDIA IN VIEW OF ARTICLE 7 READ WITH ARTICLE 5(5) AND 5(6) OF THE INDIA - NETHERLANDS DTAA. AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 4. IN THE ABOVE BACKGROUND, IT WAS A COMM ON POINT BETWEEN THE PARTIES THAT FOR ASSESSMENT YEARS 2002 - 03, 2009 - 10 AND 2010 - 11, THE TRIBUNAL VIDE ITS ORDER IN ITA NOS. 7555 TO 7557/MUM/2013 DATED 21.09.2016 HAS 4 ITA NO. 1154/MUM/2017 M/S. HOYER GLOBAL TRANSPORT BV CONSIDERED AN IDENTICAL SITUATION IN ASSESSEES OWN CASE AND UPHELD THE STAND OF THE ASS ESSEE. SIMILAR WAS THE POSITION IN ASSESSMENT YEAR 2011 - 12, WHEREIN THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 1543/MUM/2016 DATED 24.01.2018 CONCURRED WITH THE EARLIER ORDER OF THE TRIBUNAL DATED 21.09.2016 (SUPRA) AND HAS UPHELD THE STAND OF THE ASSESSEE. COPIES OF SUCH ORDERS HAVE BEEN PLACED ON RECORD. IT WAS ALSO A COMMON POINT BETWEEN THE PARTIES THAT THE AFORESTATED PRECEDENTS CONTINUE TO HOLD THE FIELD AND HAVE NOT BEEN ALTERED BY ANY HIGHER AUTHORITY. THUS, THE CIT(A) MADE NO MISTAKE IN FOLLOWING T HE ABOVE PRECEDENTS AND ALLOWING THE PLEA OF THE ASSESSEE. 5. IN VIEW OF THE AFORESAID DISCUSSION, WE FIND NO REASON TO INTERFERE WITH THE DECISION OF THE CIT(A), WHICH WE HEREBY AFFIRM. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. THE ABOVE D ECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 9 TH AUGUST, 2018. SD/ - SD/ - ( PAWAN SINGH ) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 9 T H AUGUST , 201 8 * SSL * 5 ITA NO. 1154/MUM/2017 M/S. HOYER GLOBAL TRANSPORT BV COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, L BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI