ADIT, Dehradun V. Siem Offshore Inc., Dehradun

ITA 1811/DEL/2013

• Counselvise Citation: 181120114 RSA 2013
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: SURAJ NANGIA
• Keywords: Double taxation relief
• Section: 234B

Judgement Text

ITA NO. 1811/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 1811 /DEL/2013 A.Y. : 200 9 - 10 ASSTT. DIRECTOR OF INCOME TAX, INTL. TAXATION, 13 - A, SUBHASH ROAD, AAYAKAR BHAVAN, DEHRADUN 248001 VS. M/S SIEM OFFSHORE INC., C/O NANGIA & CO., 75/7, RAJPUR ROAD, DEHRADUN - 248001 (PAN:AAKCS6466R) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. B.R.R. KUMAR, SR. DR ASSESSEE BY : SH. AMIT ARORA, CA & SH. SURAJ NANGIA, CA DATE OF HEARING : 16 - 4 - 201 5 DATE OF ORDER : 17 - 4 - 201 5 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE REVENUE IS ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - II, DEHRADUN DATED 30.1.2013 P ERTAINING TO ASSESSMENT YEAR 2009 - 10 ON THE FOLLOWING GROUNDS: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN NOT ADJUDICATING THE CASE ON MERITS HOLDING MERELY THAT IN APPELLANTS OW N CASE FOR A.Y. 2008 - 09 ON IDENTICAL FACTS INCOME HAS BEEN HELD ASSESSABLE UNDER SECTION 44BB. ITA NO. 1811/ DEL/ 2013 2 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN BRINGING TO TAX THE RECEIPT OF NON - RESIDENT FROM LEASE OF VESSEL AND CREW TO EMGS ON ACCOUNT OF TIME CHARTER AGREEMENT FOR ASSISTING EMGS IN EXPLORATION OF SEABED AND SUBSOIL FOR DATA INTERPRETATION, UNDER SECTION 44BB OF THE ACT, INSTEAD OF ROYALTY/F'I'S AS TREATED BY THE AO UNDER ARTICLE 13 OF THE DTAA SIGNED BETWEEN INDIA AND NORWAY . 3. WHETHER AN THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN NOT APPRECIATING THE FACT THAT 44BB DOES NOT COVER 'SECOND LEG' CONTRACTS, AND THAT THIS BENEFICIAL POSITION IS FOR ASSESSEE WHO ARE ENGAGED IN PROSPECTING FOR OR EXTRACTION, OR PRODUCTION OF MINERAL OILS AND NOT FOR ASSESSEE IN LEASING/TIME CHARTER BUSINESS. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN HOLDING THAT INCOME FROM EQUIPMENT RENTAL IS NOT CHARGEABLE UNDER SECTION 9(1)( VI) OF THE I. T. ACT, WHEN UNDER ITS EXCLUSIONARY CLAUSE, INCOME IN RESPECT OF 'SECOND LEG' CONTRACTS IN LEASING/TIME CHARTER BUSINESS ARE NOT COVERED UNDER SECTION 44BB. ITA NO. 1811/ DEL/ 2013 3 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN HOLDING THAT TH E INCOME OF THE ASSESSEE WAS TAXABLE UNDER THE PRESUMPTIVE PROVISIONS OF SEC. 44BB, IGNORING THE FACT THAT TAXABILITY UNDER SECTION 44BB SHALL NOT APPLY IN RESPECT OF INCOME REFERRED TO IN SECTION 44DA IN VIEW OF THE CLARIFICATORY PROVISO TO SEC. 44BB AND SEC. 44DA. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT PROVISO TO SECTION 44DA BROUGHT ABOUT BY THE FINANCE ACT 2011 WAS ONLY C L ARIFICATORY IN NATURE AND ITS APPLICATION HAS TO BE READ INTO THE MAIN PROVISIONS, IN VIEW OF THE DECISION OF THE APEX COURT IN THE CASE OF SEDCO FOREX INTERNATIONAL DRILLING V / S CIT. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN NOT ADJUDICATING THE ISSUE OF TAXABILITY OF GROSS RECEI PTS ACCRUING TO ASSESSEE AGAINST PRO DATA BASIS OFFERED BY ASSESSEE ON MERITS, HOLDING THAT AO'S ACTION IS UPHELD ONLY FOR THE PURPOSE OF 44 BB COMPUTATION. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN RELYING UPON THE DE CISION OF THE ITA NO. 1811/ DEL/ 2013 4 ITAT IN THE CASE OF MLS CGG VERITAS SERVICES, SA IN ITA NO. 46531DEL/2010 WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AGAINST WHICH APPEAL TO THE HON'BLE UTTARAKHAND HIGH COURT IS BEING FILED. 9. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN HOLDING THAT INTEREST UNDER SECTION 234 - B WAS NOT CHARGEABLE IN THIS CASE BY RELYING UPON THE DECISION OF HON'BLE UTTRAKHAND HIGH COURT IN THE CASE OF MAERSK (334 ITR 79) WHERE AS THE DEPARTMENT HAS CONTESTED THE ISSUE AND HAS FILED SLP BEFORE THE A PEX COURT AGAINST IN THE CASE OF JACOBS CIVIL INCORPORATED/ MITSUBISHI INVOLVING SIMILAR ISSUE. 10. THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MODIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF BEFORE THE HEARING OF THE APPEAL. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, NEED NOT BEEN REPEATED HERE FOR THE SAKE OF BREVITY. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE SHRI AMIT ARORA ALONGWITH SHRI SURAJ NAN GIA HAS STATED THAT THE ISSUES IN DISPUTE HAVE ALREADY BEEN ADJUDICATED AND DECIDED BY THE ITAT C BENCH, NEW DELHI IN A GROUP CASES IN FAVOR OF THE ASSESSEE, IN WHICH ITA NO. 1811/ DEL/ 2013 5 THE ASSESSEE WAS ALSO THE PARTY IN ITA NO. 5633/DEL/2010 (A.Y. 2007 - 08) SIEM OFFSORE INC. C/O EMGEE CORPORATION VS. ADDL. DIT (INTL. TAXATION) VS. ADDL. DIT (INTL. TAXATION) DECIDED ON 11.6.2014 . HE ALSO DRAW OUR ATTENTION TOWARDS THE FINDING OF THE ITAT IN THE CASE OF ASSESSEE ON THE ISSUE IN DISPUTE PASSED IN ITA NO. 5631/DEL/2010 (A. Y. 2006 - 07) SIEM OFFSORE INC. C/O EMGEE CORPORATION VS. ADDL. DIT (INTL. TAXATION) VS. ADDL. DIT (INTL. TAXATION) AND ITA NO. 5632/DEL/2010 (A.Y. 2007 - 08) SIEM OFFSORE INC. C/O EMGEE CORPORATION VS. ADDL. DIT (INTL. TAXATION) VS. ADDL. DIT (INTL. TAXATION) AT PAGES 52 TO 53 OF THE AFORESAID ORDER DATED 11.6.2014. THEREFORE, HE REQUESTED THAT THE PRESENT APPEAL FILED BY THE REVENUE MAY BE DISMISSED. 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL, RAISED BY THE DEPARTMENT. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON AVAILABLE ON RECORD, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ALONGWITH THE ORDER PASSED BY THIS BENCH AS STATED IN PARA 3 AS AFORESAID. WE ARE OF THE VIEW THAT THE LD. FIRST APPELLATE AUTHORITY HAS DEALT THIS ISSUE AT PAGE 3 VIDE PARA NO. 4.0 & 5.0 WHEREIN HE HAS FOLLOWED HIS OWN ORDER RELEVANT FOR THE ASSTT. YEAR 2008 - 09 AND DECIDED THE ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE, THE REL EVANT PARAGRAPH NO. 4.0 & 5.0 OF THE IMPUGNED ORDER IS REPRODUCED HEREUNDER: - ITA NO. 1811/ DEL/ 2013 6 4.0 THE FIRST GROUND OF APPEAL CHALLENGES THE ACTION OF THE LD. AO IN ASSESSING INCOME AS ROYALTY RATHER THAN U/S 44BB OF THE ACT. THE LD. AR PLACED ON RECORD A COPY OF THE APPELLATE ORDER IN THE APPELLANT S OWN CASE FOR A.Y. 2008 - 09 (APPEAL NO. 277/CIT(A) - II/2011 - 12, ORDER DATED 25.10.2012] IN WHICH ON IDENTICAL FACTS THE INCOME HAS BEEN HELD ASSESSABLE U/S. 44BB OF THE ACT ON THE ENTIRE RECEIPTS (GROSS). SINCE THE FACTS ARE THE SAME IN THE PRESENT APPEAL, THE INCOME IS DIRECTED TO BE ASSESSED U/S. 44BB OF THE ACT BY ADOPTING THE GROSS RECEIPTS FOR WORKING OUT TAXABLE INCOME. 5.0 THE SECOND GROUND CHALLENGES THE LEVY OF INTEREST U/S. 234B OF THE ACT. THIS ISSUE IS COVER ED IN FAVOR OF THE APPELLANT DUE TO THE CASE OF MAERSK COMPANY LTD. REPORTED IN 334 ITR 79 (UK). 5.1 AFTER GOING THROUGH THE FINDINGS GIVEN BY THE LD. CIT(A) IN THE IMPUGNED ORDER AS WELL AS THE ORDER PASSED BY THE ITAT, C BENCH, NEW DELHI IN A GROUP CASES, IN WHICH THE ASSESSEE WAS ALSO THE PARTY IN ITA NO. 5633/DEL/2010 (A.Y. 2007 - 08) SIEM OFFSORE INC. C/O EMGEE CORPORATION VS. ADDL. DIT (INTL. TAXATION) VS. ADDL. DIT (INTL. TAXATION) DECIDED ON 11.6.2014, WE ARE OF THE CONSIDERED VIEW THAT THE ISSU E IN DISPUTE HAS ALREADY BEEN ADJUDICATED AND DECIDED BY THIS BENCH IN ASSESSEE S OWN CASE, IN ITS FAVOR FOR THE ASSTT. YEAR 2007 - 08 IN ITA NO. 5633/DEL/2010 (A.Y. 2007 - 08) DECIDED ON 11.6.2014. RESPECTFULLY, FOLLOWING THE ORDER OF THE COORDINATE BENCH, T HE APPEAL FILED BY THE REVENUE IS DISMISSED. WE DIRECT THE AO THAT THE INCOME OF THE ASSESSEE IS TO BE ASSESSED U/S. 44BB OF THE ACT BY ADOPTING THE GROSS RECEIPTS FOR WORKING OUT TAXABLE INCOME. ITA NO. 1811/ DEL/ 2013 7 5.2 AS REGARDS ANOTHER ISSUE REGARDING LEVY OF INTEREST U /S. 234B OF THE I.T. ACT. WE FIND THAT THIS ISSUE IS ALSO COVERED IN FAVOR OF THE ASSESSEE DUE TO THE CASE OF MAERSK COMPANY LTD. REPORTED IN 334 ITR 79 (UK). 5.3 KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS AND PRECEDENT, WE ARE OF THE CONSIDERED VIEW THAT THE ORDER OF THE LD. CIT(A) IS A WELL REASONED ORDER, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME ON THE ISSUE S IN DISPUTE, AS AFORESAID. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRON OUNCED IN THE O PEN C OURT ON 17 / 4 /20 1 5 . SD/ - SD/ - [ S.V. MEHROTRA] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 17 / 4 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 1811/ DEL/ 2013 8