DCIT (IT) 3(2)(2), MUMBAI V. MISC BERHARD, MUMBAI

ITA 1389/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7538 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 14-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURUDR
• Assessee Lawyers: ALIASGAR RAMPURWALARAVI SAWANA; CHANDNI SHAHAR
• Keywords: Double taxation relief

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL LBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & RAVISH SOOD, JUDICIAL MEMBER ./I.T.A./1389/MUM/2016, /ASSESSMENT YEAR: 2011-12 DCIT-(IT)-3(2)(2) ROOM NO.11, GROUND FLOOR, SCINDIA HOUSE, NM ROAD, BALLARD ESTATE, MUMBAI-400 038. VS. M/S. MISC BERHARD C/O. MSC AGENCY (INDIA) PVT. LTD. HIMALAYAS, 2 ND FLOOR, GEETMALA COMPLEX, NEAR TO SHAH INDL. ESTATE, DEONAR, GOVANDI, MUMBAI-400 088. PAN:AACCM 1736 E ( /APPELLANT ) ( / RESPONDENT ) C.O. NO.291/MUM/17 (ARISING OUT OF I.T.A./1389/MUM/2016, /ASSESSMENT YEAR: 2011-12 M/S. MISC BERHARD C/O. MSC AGENCY (INDIA) PVT. LTD. MUMBAI-400 088. VS. DCIT-(IT)-3(2)(2) MUMBAI-400 038. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI M.V. RAJGURU-DR ASSESSEE BY: S/SHRI ALIASGAR RAMPURWALA/RAVI SAWANA & MS. CHANDNI SHAH-AR.S / DATE OF HEARING: 19/01/2018 / DATE OF PRONOUNCEMENT: 04/04/2018 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 23/12/2015 OF CIT(A)-57 , MUMBAI,THE ASSESSING OFFICER (AO) HAS FILED THE PRESENT APPEAL.THE ASSESSEE HAS LODGE D CROSS OBJECTION FOR THE YEAR UNDER APPEAL.ASSESSEE-COMPANY,ENGAGED IN RUNNING INTERNAT IONAL SHIPPING LINE,FILED ITS RETURN OF INCOME ON 30/09/2011,DECLARING ITS TOTAL INCOME AT RS.27.55 CRORES.THE AO COMPLETED ASSESSMENT,ON 29/04/2014, U/S.143(3) R.W.S. 144C(3) OF THE ACT,DETERMINING ITS INCOME AT RS.9.80 CRORES,COMPUTING THE INCOME AS PER THE PROV ISIONS OF SECTION 44B OF THE ACT. 2. EFFECTIVE GOA IS ABOUT APPLICABILITY OF ARTICLE 8 O F THE INDIA MALAYSIA DTAA.DURING THE ASSESSMENT PROCEEDINGS,THE AO HELD THAT BENEFIT OF ARTICLE 8 OF TAX TREATY WAS NOT AVAILABLE TO THE PORTION OF FREIGHT WHICH WAS ATTRIBUTABLE TO VO YAGE PERFORMED ON FEEDER VESSELS WHICH WERE OPERATED BY THIRD PARTIES (AND NOT BY THE ASS ESSEE). HE HELD THAT TOTAL FREIGHT EARNED BY THE ASSESSEE UNDER THE HEAD FEEDER VESSEL INCOME WA S TAXABLE IN INDIA. 1389/M/16-C.O.291/17- MISC BERHARD 2 3. THE FAA ,IN THE APPELLATE PROCEEDINGS,REVERSED THE ORDER OF THE AO FOLLOWING THE ORDER OF THE TRIBUNAL DELIVERED FOR THE AY.S 2004-05 2007- 08 AND AY. 2009-10. DATED 16/7/14. 4. DURING THE COURSE OF HEARING BEFORE US,THE DEPART MENTAL REPRESENTATIVE(DR) AND THE AUTHORISED REPRESENTATIVE(AR) AGREED THAT ISSUE RAI SED BY THE AO,STANDS COVERED BY THE ORDERS OF THE TRIBUNAL FOR THE EARLIER YEARS(ITA.S/ 6499AND 6500 & OTHERS/MUM/2012-AY.S 2004-05 TO2007-08,DATED.16/07/2014 AND ITA/574/MUM /2015 AY.2008-09 DATED 22/11/ 2017). WE FIND THAT WHILE DECIDING THE APPEAL FOR T HE AY.2008-09 (SUPRA)THE TRIBUNAL HAS DEALT THE ISSUE AS UNDER : WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE O RDERS OF THE AUTHORITIES BELOW AND THE COORDINATE BENCH DECISION. THERE IS NO DISPUTE THA T THE FACTS ARE IDENTICAL IN THE ASSESSMENT YEAR UNDER APPEAL BEFORE US AND IN THE IMMEDIATELY PRECEDING ASSESSMENT YEARS2004-05 TO 2007- 08. THE COORDINATE BENCH HAD DECIDED THE ISSUE IN GROUND NO. 1 IN FAVOUR OF THE ASSESSEE OBSERVING AS UNDER: 23.WE WILL NOW INDEPENDENTLY EXAMINE ARTICLE8(1) AND ARTICLE8(2) OF INDO MALAYSIA DTAA. THE CRUCIAL PHRASE OR WORDS WHICH NE ED TO BE ANALYSED HERE ARE OPERATION OF SHIPS, TRANSPORTATION BY THE OWNER OR LESSEES OR CHARTERERS OF SHIPS. FIRST OF ALL, THE WORD OPERATION IS DIFFER ENT FROM THE WORD OPERATE OR OPERATOR. THE WORD OPERATE MEANS TO CONTROL THE FUNCTIONING OF MACHINE, PROCESS OR SYSTEM. HERE, THE PERSON IN CONTROL IS IMPORTANT . THE WORD OPERATOR MEANS, A PERSON WHO OPERATES THE EQUIPMENT OR A MACHINE. HER E FOR OUR PURPOSE OPERATOR OF SHIP. WHEREAS, THE WORD OPERATION CONNOTES THE FA CT OR CONDITION OF FUNCTIONING OR BEING ACTIVE I.E., SOME KIND OF ACTIVITY. THE OPERA TION OF SHIPS CANNOT BE UNDERSTOOD MERELY AS AN OPERATOR OF SHIPS OR A PERSON WHO OPER ATES THE SHIPS. THE WORD OPERATION OF SHIPS HAS TO BE UNDERSTOOD IN A BROADER SENSE O F CARRYING OUT SHIPPING ACTIVITY. THE CARRYING OF SHIPPING ACTIVITY COULD BE AS AN OWNER OF A SHIP OR AS A LESSEE OF A SHIP OR AS A CHARTERER OF A SHIP. HERE, THE WORD OWNER HAS T O BE INFERRED AS A PERSON WHO OWNS A SHIP AND THE WORD LESSEE AS A PERSON WHO OWNS THE SHIP FOR A GIVEN LEASE PERIOD. THE WORD CHARTERER HAS TO BE UNDERSTOOD AS A PERSON W HO CHARTERS OR HIRES A SHIP FOR A VOYAGE. THE LAW LEXICON (P. RAMANATHAAYIER, 2ND EDN .), DEFINES THE WORD CHARTERER AS ONE WHO, BY CONTRACT ACQUIRED THE R IGHT TO USE A VESSEL BELONGING TO ANOTHER. ONE WHO CHARTERS OR HIRES OR ENGAGES THE W HOLE OR PART OF A SHIP UNDER AN AGREEMENT OF CHARTER PARTY FOR A VOYAGE. HERE, THE WORD CHARTERER DOES NOT MEAN THE OWNER OR LESSEE OF A SHIP. THE WORD CHARTER PA RTY HAS BEEN DEFINED IN LAW LEXICON AS AN INDENTURE OF COVENANTS AND AGREEMENT S MADE BETWEEN MERCHANTS AND MARINERS CONCERNING THEIR SEA AFFAIRS. IT IS A CONT RACT BY WHICH A SHIP OR SOME PRINCIPAL PART THEREOF, IS LET TO A MERCHANT FOR CONVEYANCE O F GOODS ON A DETERMINED VOYAGE TO ONE OR MORE PLACES. FROM THIS DEFINITION, IT IS AM PLY EVIDENT THAT THE WORD CHARTERER MEANS HIRING OF A SHIP FOR A VOYAGE, EITHER WHOLE O F THE SHIP OR A PART OF A SHIP. THE WORD CHARTER COMPLETELY ELUDES THE CONCEPT OF OWN ERSHIP. A CHARTERER OF A SHIP CANNOT BE THE OWNER OF A SHIP. THEREFORE, THE CONTE NTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE WORD CHARTERER HAS TO BE UNDERSTOOD IN THE CONTEXT OF OWNER OR LESSEE THAT IS HAVING CONTROL OF THE SHIP IS PER HAPS NOT THE CORRECT UNDERSTANDING OF THE WORD CHARTERER. THE PRINCIPLE OF NOSCITURAS OCIIS I.E., THE MEANING OF DOUBTFUL WORD MAY BE ASCERTAINED BY REFERENCE TO THE MEANING OF THE WORDS ASSOCIATED WITH IT WILL ALSO NOT APPLY HERE. IN OTHER WORDS, THE MEANI NG OF THE WORD CHARTERER CANNOT BE IMPORTED FROM OR TO BE UNDERSTOOD FROM THE MEANING OF THE WORD OWNER OR LESSEE. THE LEARNED COUNSEL, BEFORE US, HAS ALSO FILED VARI OUS MEANING OF THE TERM CHARTER OR CHARTERER, WHICH ARE AS UNDER: 1389/M/16-C.O.291/17- MISC BERHARD 3 I) DICTIONARY OF INTERNATIONAL BUSINESS TERMS (FINA NCIAL WORLD PUBLISHING), DEFINES THE TERM CHARTER AS UNDER: TO RENT AN AIRCRAFT OR VESSEL, OR A PART OF ITS CA RGO SPACE, FOR A PARTICULAR JOURNEY OR A PERIOD OF TIME. II) BLACKS LAW DICTIONARY (9TH EDITION) DEFINES TH E TERM CHARTER WHICH INCLUDES THE TERM SPACE CHARTER WHICH IS DEFINED AS UNDER: A CHARTER FOR A PART OF A VESSELS CAPACITY, SUCH AS A SPECIFIED HOLD OR DECK OR A SPECIFIED PART OF THE VESSELS CARRYING CAPACITY. III) K.J. AIYAR S JUDICIAL DICTIONARY (12TH EDITION) DEFINES THE TE RM CHARTER PARTY AS UNDER: AN AGREEMENT IN WRITING BY WHICH A SHIP OWNER AG REES TO LET AN ENTIRE SHIP OR PART THEREOF, TO A MERCHANT, FOR THE CARRIAGE OF GOODS ON A SPECIFIED VOYAGE, OR DURING A SPECIFIED PERIOD, FOR A SUM OF MONEY WH ICH THE MERCHANT AGREES TO PAY AS FREIGHT FOR THEIR CARRIAGE. IV) CONCISE LAW DICTIONARY BY P. RAMANATHAAIYAR (Y EAR 2005), DEFINES THE TERM CHARTERER AS UNDER: ONE WHO CHARTERS OR HIRES OR ENGAGES THE WHOLE OR PART OF A SHIP UNDER AN AGREEMENT OF CHARTER PARTY FOR A VOYAGE. V) CHAMBERS 20TH CENTURY DICTIONARY DEFINES THE TE RM CHARTERER AS UNDER: TO ESTABLISH BY CHARTER: TO LET OR HIRE, AS A SHIP , ON CONTRACT. VI) MODERN LEGAL USAGE DICTIONARY DEFINES THE TERM CHARTERER AS UNDER: A PERSON TO WHOM A VESSEL IS CHARTERED IN A CHARTE R PARTY. VII) OXFORD DICTIONARY DEFINES THE TERM CHARTERER AS UNDER: A CONTRACT TO HIRE AN AIRCRAFT, SHIP, ETC. FOR A S PECIAL PURPOSE. VIII) MARITIME AND SHIPPING DICTIONARY 2012, DEFINE S THE TERM CHARTER AS UNDER: A VOYAGE CHARTER WHEREBY THE SHIP OWNER AGREES TO PLACE A CERTAIN NUMBER OF CONTAINER SLOTS (TEU AND/OR FEU) AT THE CHARTERER S DISPOSAL. 24. FROM THE ABOVE DEFINITIONS OF THE TERM CHARTER OR CHARTERER, ONE THING IS AMPLY CLEAR THAT IT MEANS HIRING OF VESSELS OR A SH IP OR A PART OF ITS SPACE UNDER AN AGREEMENT FOR A VOYAGE. THUS, EVEN A PART OF A SPAC E IN THE VESSELS FOR A PARTICULAR JOURNEY IS ALSO CONSIDERED AS CHARTER OF SHIP OR CHARTERER. IN THE DECISION OF BALAJI SHIPPING U.K. LTD. (SUPRA), WHILE REFERRING TO THE JUDGMENT OF TYCHY (SUPRA), THE HIGH COURT HAVE NOTED THAT A SLOT CHARTER AND A VOYAG E CHARTER OF A PART OF A SHIP ARE IN A SENSE CHARTERERS OF A SPACE IN A SHIP. 25. FROM THE ABOVE DISCUSSION, THE FOLLOWING INFERE NCES CAN BE DEDUCED: I) FIRSTLY, THE OPERATION OF A SHIP CAN BE DONE AS CHA RTERER WHICH DOES NOT MEAN TO OWN OR CONTROL THE SHIP EITHER AS AN OW NER OR AS A LESSEE; II) SECONDLY, CHARTERER IS A HIRER OF A SHIP UNDER AN A GREEMENT OR ARRANGEMENT TO ACQUIRE THE RIGHT TO USE A VESSEL OR A SHIP FOR THE TRANSPORTATION OF A GOOD ON A DETERMINED VOYAGE, EI THER THE WHOLE OF THE SHIP OR PART OF THE SHIP OR SOME SPACE OF THE SHIP IN A CHARTER PARTY AGREEMENT; AND III) THIRDLY, THE WORD CHARTERER INCLUDES A VOYAGE CHA RTER OF A PART OF A SHIP OR A SLOT, AS IT IS ALSO ARRANGEMENT OR AGRE EMENT TO HIRE A SPACE IN A SHIP OWNED AND LEASED BY OTHER PERSONS. THUS, IN OUR OPINION, THE WORD CHARTERER SHOULD N OT BE CONFUSED FROM THE WORD OWNER OR LESSEE OR HAVING CONTROL OF THE SHIP O R AS AN OPERATOR OF THE SHIP. THE OPERATION OF SHIP CAN BE DONE AS A CHARTERER, WHICH INCLUDES PART OF A SHIP OR PARTICULAR SPACE IN A SHIP. 26. UNDER THE INCOME TAX ACT, 1961, THERE IS A SEPA RATE CODE OF SHIPPING, CHAPTERXIIG, WHICH CONTAINS SPECIAL PROVISION RELA TING TO INCOME OF SHIPPING COMPANIES. SECTION 115VB, DEFINES OPERATING SHIPS I N THE FOLLOWING MANNER: 1389/M/16-C.O.291/17- MISC BERHARD 4 SECTION 115VB: FOR THE PURPOSES OF THIS CHAPTER, A COMPANY SHALL BE REGARDED AS OPERATING A SHIP IF IT OPERATES ANY SHI P WHETHER OWNED OR CHARTERED BY IT AND INCLUDES A CASE WHERE EVEN A PA RT OF THE SHIP HAS BEEN CHARTERED IN BY IT IN AN ARRANGEMENT SUCH AS SLOT C HARTER, SPACE CHARTER OR JOINT CHARTER : PROVIDED THAT A COMPANY SHALL NOT BE REGARDED AS TH E OPERATOR OF A SHIP WHICH HAS BEEN CHARTERED OUT BY IT ON BAREBOAT CHARTER-CU M-DEMISE TERMS OR ON BAREBOAT CHARTER TERMS FOR A PERIOD EXCEEDING THREE YEARS. 27. THOUGH THE ABOVE DEFINITION OF OPERATING OF SH IPS IS FOR THE PURPOSE OF CHAPTERXIIG, HOWEVER, WE ARE REFERRING ONLY FOR A LIMITED INFERENCE FOR UNDERSTANDING THE CONCEPT THAT CHARTERER OF SHIPS INCLUDES EVEN A PART OF THE SHIP IN AN ARRANGEMENT SUCH AS SLOT CHARTER, SPACE CHARTERER OR JOINT CHAR TER. THE SLOT CHARTERER OR SPACE CHARTERER IN A SHIP CANNOT BE READ IN ISOLATION OR SEPARATE FROM THE MEANING OF CHARTERER. AS HELD EARLIER BY US, THOUGH THE DECISION OF THE H ON'BLE JURISDICTIONAL HIGH COURT IN BALAJI SHIPPING U.K. LTD. (SUPRA), CANNOT BE APPLIE D IN A BLANKET MANNER IN THE PRESENT CASE, HOWEVER, FOR THE PURPOSE OF UNDERSTANDING THE MEANING OF CHARTER OR CHARTERER OR SLOT CHARTERER, THE SAID DECISION GIVES INDEP TH ANALYSIS WHICH CAN BE ADOPTED IN THE PRESENT CASE ALSO ONLY FOR THE PURPOSE OF ASSIG NING THE TRUE MEANING OF THE WORD CHARTERER. 28. ANOTHER VERY IMPORTANT OBSERVATION MADE BY THE HIGH COURT WHICH IS QUITE RELEVANT TO NOTE IS, HOW THE SLOT CHARTERER AGREEME NTS OR SPACE CHARTERER AGREEMENT ARE INEXTRICABLY LINKED WITH THE SHIPPING BUSINESS IN T HE PRESENT DAY SHIPPING BUSINESS. THE SAID OBSERVATIONS ARE AS UNDER: 26. AN ENTERPRISE MAY NOT PLY THE SHIPS OWNED OR C HARTERED OR OTHERWISE CONTROLLED OR MANAGED BY IT IN RESPECT OF CERTAIN ROUTES. IT WOULD HOWEVER, ON ACCOUNT OF THE BUSINESS EXIGENCIE S, BE REQUIRED TO CARRY CARGO ON SUCH ROUTES. BUSINESS EXPEDIENCY COU LD ARISE ON ACCOUNT OF A NUMBER OF REASONS AND DIFFERENT SITUATIONS SUC H AS OBLIGING REGULAR CLIENTS, OR CULTIVATING NEW ONES. IF IT WERE NOT TO DO SO, IT MAY WELL LOOSE CLIENTELE. SHIPS OWNED OR CHARTERED OR OTHERWISE CO NTROLLED OR MANAGED BY AN ENTERPRISE MAY NOT BE AVAILABLE ON THE PARTIC ULAR ROUTE ON A GIVEN DAY OR FOR A PARTICULAR PERIOD. THE ENTERPRISE MAY ALREADY HAVE ENTERED INTO CONTRACTS OR MAY EVEN BE REQUIRED TO ENTER INT O CONTRACTS FOR THE CARRIAGE OF GOODS ON THAT ROUTE ON THAT DAY OR DURI NG THAT PERIOD. THE TRADE WOULD EXPECT, THE ENTERPRISE TO PERFORM ITS C ONTRACTS AND/OR ENSURE THERE IS NO BREAK IN ITS SERVICES. THIS IT CAN DO B Y AVAILING SLOT HIRE AGREEMENTS. THEIR REFUSAL OR FAILURE TO DO SO, MAY WELL AFFECT THEIR BUSINESS AND REPUTATION ADVERSELY. 27. BY AVAILING THE FACILITY OF SLOT HIRE AGREEMENT S, THE ENTERPRISE DOES NOT ARRANGE THE SHIPMENT ON BEHALF OF THE OWNE R OF THE SAID VESSEL, BUT DOES SO ON ITS OWN ACCOUNT ON A PRINCIPAL TO PR INCIPAL BASIS WITH ITS CLIENTS. SUCH CASES ALSO HAVE A NEXUS TO THE MAIN B USINESS OF THE ENTERPRISE OF THE OPERATION OF SHIPS. THEY ARE ANCI LLARY TO AND COMPLEMENT THE OPERATION OF SHIPS BY THE ENTERPRISE . IF THEY ARE NOT MERELY ANCILLARY TO THE MAIN BUSINESS OF OPERATION OF SHIPS BUT CONSTITUTE THE PRIMARY AND MAIN ACTIVITIES OF THE ENTERPRISE, IT MAY BE A DIFFERENT MATTER, WHICH WE ARE NOT CALLED UPON TO CONSIDER IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 29. FROM THE ABOVE OBSERVATIONS, IT CAN BE UNDERSTO OD THAT THE FACILITY OF SLOT HIRE AGREEMENT WITH THE FEEDER VESSELS TO COMPLETE THE V OYAGE IS NOT MERELY AN AUXILIARY OR INCIDENTAL ACTIVITY TO THE OPERATION OF SHIPS, BUT INEXTRICABLY LINKED. IF THE TRANSPORTATION 1389/M/16-C.O.291/17- MISC BERHARD 5 OF CARGO BY FEEDER VESSELS BELONGING TO OTHER ENTER PRISE IS ONLY A PART OF MAIN VOYAGE BY THE MOTHER SHIP I.E., OWNED OR LEASED BY THE ASS ESSEE ENTERPRISE, THEN IT HAS TO BE TAKEN AS A PART AND PARCEL OF THE OPERATION, WHICH IS INEXTRICABLY LINKED WITH THE COMPLETION OF THE ENTIRE VOYAGE. THE LINKAGE BETWEE N THE TRANSPORTATION BY FEEDER VESSELS, MOTHER VESSELS OF THE SHIP OWNED BY THE AS SESSEE HAS TO BE ESTABLISHED. IN THE PRESENT CASE, INSOFAR AS THE ISSUE OF LINKAGE BETWE EN THE VOYAGE PERFORMED BETWEEN THE FEEDER VESSELS AND MOTHER VESSELS, THE ASSESSEE HAS BEEN ABLE TO ESTABLISH BEFORE THE A.O. WHICH IS EVIDENT FROM THE OBSERVATIONS OF THE A.O. IN PARA7 & 8, WHEREIN HE HELD THAT THE FREIGHT EARNED FROM CARRIAGE OF GOODS IN INTERNATIONAL TRAFFIC BY OPERATION OF SHIPS INCLUDING FEEDER VESSELS OPERATED BY 3RD P ARTY OPERATOR, THE ASSESSEE HAS FURNISHED DOCUMENTARY PROOF TO SUBSTANTIATE THE LIN KAGE BETWEEN THE VOYAGE PERFORMED ON FEEDER VESSELS AND MOTHER VESSELS. THE ASSESSING OFFICERS CASE RESTS UPON THE PREMISE THAT VOYAGE CARRIED ON BY THE FEEDER VESSEL S HAS TO BE SEGREGATED FOR THE PURPOSE OF ALLOWING BENEFIT UNDER ARTICLE8, BECAUS E CHARTERING OF SOME SPACE I.E., SLOT CHARTERING, FEEDER VESSELS CANNOT BE EQUATED WITH C HARTERING OF COMPLETE SHIP. BY THIS, THE ASSESSING OFFICER MEANS THAT THE ASSESSEE MUST HAVE COMPLETE CONTROL OF SUCH SHIPS EVEN UNDER THE CHARTER AGREEMENT. THUS, THE VIEW TA KEN BY THE ASSESSING OFFICER FOR DENYING THE BENEFIT UNDER THE PRESENT ARTICLE8 IS NOT TENABLE AS PER OUR DISCUSSION IN THE FORGOING PARAGRAPHS, THAT CHARTERING OF SOME SP ACE OR SLOT CHARTERER IN A SHIP IS ACTUALLY A PART AND PARCEL OF CHARTER OF A SHIP. UN DER THE CHARTERER AGREEMENT, THERE IS NO OWNERSHIP OR CONTROL OF ENTIRE SHIP BECAUSE THE RISK UNDER THE CHARTER PARTY AGREEMENT OR ARRANGEMENT IS UPON THE OWNER OF THE S HIP WHO GENERALLY ASSUMES AN OPERATIONAL RISK FOR TRANSPORTING THE CARGO OF THE PERSON WHO HAS HIRED THE SHIP AND THE HIRER AGREES TO PAY FOR CONVEYANCE OF GOODS ON A DE TERMINED VOYAGE. THE RISK OF THE ASSESSEE IS TOWARDS ITS CUSTOMERS FROM WHOM HE HAS AGREED TO TRANSPORT THE CARGO / GOODS FROM THE DESTINATION PORT OF BOOKING TO THE F INAL DESTINATION PORT. THUS, IN OUR OPINION, SUCH A STRICT INTERPRETATION OF THE WORD CHARTERER AS ADOPTED BY THE DEPARTMENT CANNOT BE SUSTAINED. 30. NOW COMING TO THE DECISION OF CIADENAVEGACAON ORSUL (SUPRA), WE FIND THAT IN THE SAID DECISION, THE ASSESSEE HAD FAILED TO LINK AND ESTABLISH THE VOYAGE WISE TRANSPORTATION, WHETHER THE FEEDER VESSELS WERE ACT UALLY LOADING THE GOODS INTO THE MOTHER VESSELS, WHICH THE ASSESSEE HAD CLAIMED THAT IT WAS OPERATING. THIS IS EVIDENT FROM PARA 2 OF THE SAID TRIBUNAL ORDER. FURTHER, A S POINTED OUT BY THE LEARNED COUNSEL, THE PLEA OF THE ASSESSEE THAT THERE WAS A SLOT CHAR TER AGREEMENT WITH THE FEEDER VESSEL ORALLY WAS NOT SUPPORTED BY ANY MATERIAL OR EVIDENC E. IT WAS IN THIS CONTEXT THAT THIS PLEA OF SLOT CHARTER AGREEMENT WITH THE FEEDER VESS EL WAS REJECTED. FURTHER, IN VIEW OF THE MEANING OF THE CONCEPT OF CHARTER AND SLOT CHAR TER AS EXPLAINED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN BALAJI SHIPPING U.K. L TD. (SUPRA), THE SAID DECISION MAY NOT APPLY HERE IN THIS CASE, PARTICULARLY WHEN IN T HE SAID DECISION, THE TRIBUNAL HAS NOT DISCUSSED WHAT IS MEANT BY CHARTERER AS EXPLAINED LATER ON BY THE HON'BLE BOMBAY HIGH COURT. REGARDING OTHER DECISIONS RELIED UPON B Y THE LEARNED DEPARTMENTAL REPRESENTATIVE WHICH ARE MAINLY BASED ON THE DECISI ON OF THE FEDERAL EXPRESS CORPORATION (SUPRA), WE FIND THAT IN THIS CASE ALSO , THE PLEA OF THE ASSESSEE THAT IT HAD BOOKED SPACE ON AIR INDIAS AIRCRAFT AND SUCH BOOKI NG OF SPACE AMOUNTED TO CHARTER OF AIRCRAFT PARTLY, WAS REJECTED ON THE GROUND THAT TH IS WAS NOT RAISED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. THE TRIBUNAL THUS, SE T ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE WHEN A SPACE IS BOOKED WITH OTHER AIRLINES, THE QUESTION, WHETHER TRANSPORTATION THROUGH SUCH AIRLINES CAN BE SAID TO BE TRANSPORTATION BY AIRCRAFT CHARTERED BY THE ASSESSEE OR NOT WITH REFERENCE TO THE FIRST PART OF THE DEFINITION OF ARTICLE8(2) WITH INDOU.S. TREATY. SIMILARLY, THE DECISION OF M/S. SIMATECH SHIPPING FORWARDING LLC, AS RELIED UPON BY THE LEARNED DEPAR TMENTAL REPRESENTATIVE, WILL NOT APPLY BECAUSE IN THIS CASE ALSO, THE MATTER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE CASE IN THE LIGHT OF THE DECI SION OF THE FEDERAL EXPRESS CORP. (SUPRA). SIMILAR WAS THE CASE IN UNITED PARCEL SERV ICE (SUPRA) ALSO. IN NONE OF THE 1389/M/16-C.O.291/17- MISC BERHARD 6 DECISIONS, THE TRUE IMPORT OR MEANING OF THE WORD CHARTERER HAS BEEN TAKEN INTO CONSIDERATION AS ADOPTED BY THE SUBSEQUENT DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT. 31. THUS, IN OUR CONCLUSION, WE HOLD THAT TRANSPOR TATION OF CARGO IN THE CONTAINER BELONGING TO THE ASSESSEE FROM INDIAN PORT I.E., PO RT OF BOOKING TO THE HUB PORT THROUGH FEEDER VESSEL BY WAY OF SPACE CHARTER / SLOT CHARTE R ARRANGEMENT, FALLS WITHIN THE AMBIT OF THE WORD CHARTERER AND, THEREFORE, IT CANNOT B E SEGREGATED FORM THE SCOPE OF OPERATION OF SHIPS AS DEFINED IN ARTICLE8(2) OF THE INDOMALAYSIAN TREATY. IN THE PRESENT CASE, THE VOYAGE BETWEEN THE INDIAN PORT TO THE HUB PORT THROUGH FEEDER VESSEL AND FROM HUB PORT TO FINAL DESTINATION PORT THROUGH MOTHER VESSEL OWNED / LEASED BY THE ASSESSEE ARE INEXTRICABLY LINKED AND THERE IS C OMPLETE LINKAGE OF THE VOYAGE AND, THEREFORE, THE ENTIRE PROFITS DERIVED FROM THE TRAN SPORTATION OF GOODS CARRIED ON BY THE ASSESSEE IS TO BE TREATED AS PROFITS FROM OPERATION OF SHIPS AND, THEREFORE, THE BENEFIT OF ARTICLE8, CANNOT BE DENIED TO THE ASSESSEE ON THE PART OF THE FREIGHT FROM VOYAGE BY THE FEEDER VESSELS. THUS, GROUND NO.2, RAISED BY TH E ASSESSEE IN ALL THE YEARS UNDER APPEAL IS ALLOWED. FACTS AND CIRCUMSTANCES BEING IDENTICAL, RESPECTIVE LY FOLLOWING THE SAID DECISION, WE HOLD THAT THE ENTIRE PROFITS DERIVED FROM THE TRANSPORTATION OF G OODS CARRIED ON BY THE ASSESSEE IS TO BE TREATED AS PROFITS FROM OPERATIONOF SHIPS AND THEREFORE THE BENEFIT OF ARTICLE-8 CANNOT BE DENIED TO THE ASSESSEE ON THE PART OF THE FREIGHT FROM VOYAGE BY THE FEEDER VESSELS. THUSGROUND NO.1RAISED BY THE ASSESSEE IS ALLOWED. RESPECTFULLY FOLLOWING THE ABOVE ORDER,WE DECIDE TH E EFFECTIVE GROUND OF APPEAL AGAINST THE AO. C.O. NO.291/MUM/17 THE REPRESENTATIVES OF BOTH THE SIDES AGREED THAT IN LIGHT OF ORDERS OF THE TRIBUNAL FOR THE EARLIER YEARS (SUPRA),THE CO HAD BECOME INFRUCTUOUS AS A RESULT,APPEAL FILED BY AO IS DISMISSED AND CO OF THE ASSESSEE IS TREATED INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH APRIL , 2018. 04 , 2018 SD/- SD/- ( (( ( /RAVISH SOOD) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 04/04/2018. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR L BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.