CMA CGM SA , MUMBAI V. DY.COMMM OF INCOME TAX (INTERNATIONAL TAXATIONA)-2(1)(1), MUMBAI

ITA 1820/MUM/2022

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CMA CGM SA, a tax resident of France, appealed against the final assessment order for the assessment year 2018-19, which included additions to their income on various grounds including the taxability of Inland Haulage Charges (IHC) and freight charges from transportation of cargo through feeder vessels. The Tribunal found that these issues were recurring and had been decided in favor of the assessee in previous years, citing decisions from the coordinate bench of the Tribunal and the jurisdictional High Court. The Tribunal also addressed the issue of the assessee's Indian agency company being treated as a permanent establishment and the taxability of IT support services income, directing a re-examination of these issues.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299544 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 05-12-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 14-07-2022
• Other Referred Cases: Safmarine Container Lines N.V. vs. ACIT, A.P. Moller Maersk A/S vs. ACIT, Balaji Shipping (UK) Ltd. vs. ACIT, Goetze India Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH POOJARIJASMIN
• Keywords: Double taxation relief; Permanent establishment; Initiation of penalty proceedings; Set aside
• Section: 143(3); 234B; 115A; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND SHRI M. BALAGANESH, AM आयकर अपील सं/ I.T.A. No. 1820/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2018-19) CMA CGM SA C/o CMA CGM Agencies (India) Pvt. Ltd. One International Center, Tower 3, 8 th Floor, Senapati Bapat Marg, Elphinstone Road West, Mumbai- 400013. बिधम/ Vs. DCIT, (International Taxation) Circle-2(1)(1) Room No. 1713, 17 th Floor, Air India Building, Nariman Point, Mumbai- 400021. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AABCC9048G (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 06/12/2022 घोषणा की तारीख /Date of Pronouncement: 16/01/2023 आदेश / O R D E R PER ABY T. VARKEY, JM: The present appeal has been filed by the assessee challenging the final assessment order dated 19/05/2021, passed under section 143(3) r/w section 144C(13) of the Income Tax Act, 1961 (‘the Act’), pursuant to the directions dated 12/05/2021, issued by the learned Dispute Resolution Panel (“Ld. DRP”) under section 144C(5) of the Act, for the assessment year 2018–19. 2. In this appeal, assessee has raised following grounds: “General 1. erred in assessing the total income of the Appellant at INR 46,94,25,922/- as against revised income of INR 52,35,195/- as per revised computation submitted by the Appellant during the course of assessment proceedings; Assessee by: Shri Rajesh Poojari/Jasmin Amalsadvala Revenue by: Shri Milind Chavan (Sr. DR) ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 2 Taxability of Inland Haulage Charges (‘IHC’) of INR 3,77,56,83,161/- 2. erred in making addition on account of IHC on the ground that same is chargeable to tax in India and accordingly brought to tax @ ad-hoc 10% deemed profit rate of taxable receipt; 3. erred in making an addition on account of IHC by denying the benefit of Article 9 of India -France Double Taxation Avoidance Agreement (‘India-France DTAA’) since IHC is directly connected to and ancillary to the transportation of cargo in international traffic; 4. erred in not following the binding decision of jurisdictional Bombay High Court (‘HC’) in the case of Safmarine Container Lines N.V. (ITA No. 952 of 2011 and 147 of 2009 dated 17 January 2013) on the ground that said decision is further challenged before the Hon’ble Supreme Court of India (‘SC’) when the SC has dismissed the revenue appeal; 5. erred in not taking cognizance of the decision of jurisdictional Tribunal in the Appellant’s own case for AY 2012-13 to AY 2014-15 & AY 2015-16, wherein the Hon'ble Tribunal has held that IHC shall form part of income from operation of ships in international traffic and accordingly, not taxable in India as per Article 9 of India France DTAA; 6. without prejudice to the above, even if IHC is taxable in India under the Act, only 7.5% of such receipts should be taxable under section 44B of the Act: Taxability of freight charges of INR 14,15,60,433/- from transportation of cargo through feeder vessels 7. erred in holding that 7.5% of freight charges from transportation of cargo through feeder vessels is income taxable ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 3 in the hands of the Appellant and not eligible benefit under Article 9 of India-France DTAA; 8. erred in not taking cognizance of the decision of jurisdictional Bombay HC in the - appellant’s own case for AY 2002-03 (ITA No. 2175 of 2009), wherein the Hon'ble HC has followed the decision in case of Balaji Shipping (UK) Ltd. and held that freight income from transportation of cargo through feeder vessels is not taxable in India; 9. erred in not taking cognizance of the decision of jurisdictional Tribunal in the Appellant’s own case for AY 2012-13 to AY 2014-15 & AY 2015-16, wherein the Hon'ble Tribunal has followed the decision of Hon'ble jurisdiction Bombay HC in the Appellant's own case and held that the freight income from transportation of cargo a through feeder vessels is eligible for relief as per article 9 of India-France DTAA; 10. erred in holding that while income from slot arrangement would fall within the ambit of section 44B of the Act, at the same time it is not eligible for benefit of Article 9 of India France DTAA; 11. erred in stating that the Appellant has claimed relief under Article 9(4) of India-France DTAA without appreciating that Article 9(4) deals with taxability of interest arising on funds connected with operation of ships in international traffic and not income from pooling arrangements; 12. erred in holding that income earned by the Appellant from transportation of cargo through feeder vessels to mother vessels not owned/ chartered/ leased by the Appellant does not qualify for benefit of Article 9 of India-France DTAA without appreciating that Hon’ble Bombay HC in the case of Balaji Shipping UK Ltd (Bombay HC) (supra) held that freight from ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 4 transportation of cargo from ports in India to final destination ports outside India under slot hire arrangements with third party ship owners would also fall within the ambit of Article 9; CMA CGM Agencies India Private Limited ‘CCAI’ held to be agency permanent establishment ‘PE’ of the Appellant in India 13. erred in holding that the CCAI is dependent agent of the Appellant in India and, such dependent agent constitutes a PE of the Appellant in India, without appreciating the facts and circumstance of the case; 14. erred in not appreciating that CCAI cannot be considered a dependent agent of the appellant as per Article 5 of the India- France DTAA since the transactions between the Appellant and CCAI are at arm’s length; 15. without prejudice to the above, failed to appreciate that the agent of the Appellant in India had been compensated at arm's length and hence no further attribution could be made towards Income of the Appellant liable to tax in India; Non-taxability of income in the nature of IT support services ‘FTS’ amounting to INR 7 60 05 380/- 16. erred in not examining and appreciating that income earned in the nature of IT support fees [Fees for Technical Services (‘FTS’)] amounting to INR 7,60,05,380/- from its Agency company (CCAI) is not chargeable to tax in India by virtue of the beneficial not provisions of Article 9 of India-France DTAA read along with protocol having the Most Favoured Nation (‘MFN’) clause as the same does not make available any technical knowledge, experience of skill etc. to the Indian agent according to India-Portugal DTAA; 17. failed to appreciate the said income from IT support services does not qualify as ‘royalty’ as per the provisions of India - ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 5 France DTAA as the payment of use of Software does not satisfy the requirement of ‘use of’, or the right to use, any copyright 18. failed to appreciate that the provision of IT support services by CCSA was mainly aimed at facilitating its shipping business and accordingly, the amount received will assume the character of profit derived from the operations of ships as it is inextricably linked with its shipping activity and hence, exempt under Article 9 of India-France DTAA; 19. erred in not appreciating that Appellant has inadvertently offered the said income to tax at the rate of 10% plus surcharge and education cess (as per section 115A of the Act) in the return of income, it does not automatically constitute income chargeable to tax in India; 20. erred in not following the decision of Hon’ble Pune Tribunal in the case of Appellant’s Indian Agency company (through whom Appellant has received income), CCAI (ITA No.2314/PUN/2017 dated 2 January 2020) while adjudicating the similar payment for AY 2012-13 has held that the payment made for IT Services by CCAI to the Appellant is not chargeable to tax in India as per the Article 13 as well as Article 9 of India France DTAA; Interest under section 234B of the Act 21. erred in levying interest under section 234B of INR 7,90,70,700/-; Interest under section 234C of the Act 22. erred in levying interest under section 234C of INR 7,77,55,127/-; Initiation of penalty proceedings under section 270A of the Act ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 6 23. erred in initiating penalty proceedings under section 270A of the Act.” 3. The brief facts are that he assessee company is a tax resident of France and is engaged in the business of operation of ships (i.e. transportation of cargo between ports in India and ports outside India). For the year under consideration, assessee filed its return of income on 30/11/2018 declaring total income at Rs.8,12,40,580/-. The case of the assessee was selected for scrutiny and vide draft order dated 24/09/2021 (hereinafter “the Draft Order”) passed under section 143(3) of the Act, total taxable income of the assessee was computed at Rs.46,94,25,922/-. The assessee filed detailed objections against the draft assessment proposed by AO before the Ld DRP which was pleased to reject the same vide directions dated 12/05/2021, issued under section 144C(5) of the Act. And in doing so, it followed the earlier directions issued in assessee’s own case for preceding assessment years. In conformity to the directions issued by Ld. DRP, the Assessing Officer (“AO”) passed the final assessment order dated 19/05/2022 under section 143(3) read with section 144C(13) of the Act (hereinafter the final assessment order). Being aggrieved, the assessee is in appeal before us. 4. The issue arising in ground No. 1 is general in nature and therefore need no separate adjudication. ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 7 5. The issue arising in grounds No. 2 – 6, raised in assessee’s appeal, is pertaining to taxability of Inland Haulage Charges (in short ‘‘IHC’’). 6. The brief facts of the case pertaining to this issue, as emanating from the records, are during the year under consideration, out of the total Revenue of Rs.48,50,25,23,670/-, the assessee had collected a sum of Rs.377,56,83,161/-, from its customers on account of IHC. These charges were collected towards transportation of goods from the exporter’s warehouse to the port of loading and vice versa. As per the assessee, the IHC activity is directly connected to and ancillary to the transportation of cargo in international traffic and it falls under Article 9 of India France Double Taxation Avoidance Agreement (hereinafter “DTAA”). The AO rejected the claim of the assessee and held in the draft order that the IHC received for transportation of goods are in domestic areas. Further the AO held that the handling charges which are paid for loading/unloading/stacking etc. of containers are different from the charges incurred for transportation of goods. Accordingly, the AO held that IHC is taxable in India as business profit and these are not covered by Article 9 of DTAA or section 44B of the Act. In absence of details of expenditure incurred for IHC, the AO applied net profit rate of 10% on IHC receipts and accordingly added Rs.37,75,68,316/-, to the total income of the assessee. The Ld. DRP rejected the objection filed by the assessee, against the aforesaid addition, by following its own earlier directions rendered in assessee’s own case for preceding assessment years, after noting that in the year ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 8 under consideration facts are pari-materia to the earlier assessment years and the issue is still pending before higher forums. In conformity with the earlier directions issued by Ld. DRP, the AO passed the final assessment order. Being aggrieved, the assessee is in appeal before us. 7. During the course of hearing, Ld. Authorised Representative (“Ld. AR”) submitted that this issue is covered in favour of assessee by decisions of the coordinate bench of the Tribunal rendered in assessee’s own case for preceding assessment years. 8. On the other hand, learned Departmental Representative (“Ld. DR”) vehemently relied upon the orders passed by Ld. DRP/AO. 9. We have considered the rival submissions and perused the material available on record. We find that identical issue was decided in favour of assessee by the coordinate bench of the Tribunal in CMA CGM SA vs ACIT, in ITA No. 1013/Mum/2021, for assessment year 2017–18, vide order dated 03/11/2022, wherein the Tribunal followed its own decision for AY. 2016-17 (ITA. No. 5998/Mum/2019) which was passed taking note of earlier orders in assessee’s own case for preceding assessment years. The relevant findings of the coordinate bench of the Tribunal, in aforesaid decision, are as under: “7. We find that in assessment year 2015-16 similar ground was raised by the assessee before the Tribunal. The Tribunal following the order of Co ordinate Bench in assessee's own case in ITA No.6649/Mum/2017(supra) decided the issue in favour of the assessee. The relevant extract of the ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 9 findings of Tribunal in assessment year 2015-16 are reproduced hereunder: “7. Having heard the parties, we find that while deciding identical issue in assessee's own case in the assessment year 2012-13, learned DRP had categorically held that the revenue earned from IHC is part of shipping business in International Waters, hence, covered under Article-9 of the Tax Treaty. However, subsequently, while deciding the identical issue in assessee's own case for the assessment years 2013-14 and 2014-15, learned DRP took a contrary view and decided the issue against the assessee. When the appeals preferred by the Revenue and the assessee for the aforesaid assessment years came up for consideration before the Tribunal, the Tribunal in ITA no.6649/ Mum./2017 & Ors., dated 14th March 2018, decided the issue in favour of the assessee holding as under: "15. We have heard rival contentions on this issue and perused the record. We notice that the Id DRP has mainly declined to follow its own order passed in AY 2012-13 in the subsequent two years for the reason that there is difference between Article 8 of India-Belgium DTAA and Article 9 of India France DTAA. According to Ld DRP that the India-Belgium DTAA contains specific provisions to include "any other activity directly connected with such transportation", whereas the same is absent in the India France DTAA. The Ld A.R, on the contrary, submitted that the presence or absence of the above said provision will not make any difference. In support of this proposition, the Ld A.R placed reliance on OECD model conventions and the Commentary thereon, which are extracted above. ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 10 16. We notice that the decision in the case of Safmarine Container Lines N.V (supra) has been rendered by Hon'ble Bombay High Court in the context of India-Belgium DTAA. However, in the case of DIT Vs. A.P.Moller Maersk A/S (ITA No.1306 of 2013 dated 29-04-2015), to which India-Denmark treaty would apply, the Hon'ble Bombay High Court has held that the principles involved in the decision of Safmarine Container Lines N.V (Supra) also govern the case of A.P. Moller Maersk A/S (supra). There is no dispute that the Article 9 of India-France DTAA is identically worded to the corresponding Article in India-Denmark DTAA. 17. We shall now discuss in brief the facts available in M/s A.P. Moller Maersk A/S case. The said company was resident of Denmark and hence India Denmark DTAA applied to it. In order to help its agents in booking cargo and carrying out clearing agent works, the assessee maintained a global telecommunication facility called MaerskNet, which is a vertically integrated "Communication system". The assessee recovered pro-rata costs from its agents and accordingly the Indian agents also remitted pro-rata costs to the above said assessee. Before AD, the assessee contended that it was merely a system of cost sharing and hence the amount recovered by it from its agents is in the nature of reimbursement of expenses. The AO, however, held to it to be fee for technical services. 18. Before the Hon'ble High Court, the assessee has also taken a plea that the communication system is very much an integral part of shipping business and therefore, the income received by the assessee from the agents, did in fact, amount to income from the shipping business of the assessee and therefore, not chargeable to tax. The Hon'ble Bombay High Court held that ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 11 the amount received by the assessee for using the communication system by the agents is part of shipping business and could not be captured under any other provisions of the Income tax Act except DTAA. The High Court further held that it does not amount to technical service. Finally the High Court held that the amounts paid by the agents for using the communication system arose out of the shipping business and cannot be brought to tax. 19. The decision so rendered by Hon'ble Bombay High Court in the context of India-Denmark DTAA clearly shows that the ancillary activities connected with the shipping business are also included in the shipping business. The above said decision has been followed by the co-ordinate bench in the case of same assessee, viz., A.P.Moller Maersk A/S (ITA No.1798/Mum/2015 dated 15-02 2017) for AY 2011-12 to hold that the Inland Haulage charges received by that assessee shall also form part of shipping income from international traffic. The decision so rendered for AY 2011-12 was followed by the coordinate bench in the above said assessee's case in AY 2012-13 in ITA No.1743/Mum/2016 dated 07-02-2018. 20. Before us, the Id A.R demonstrated that the Article 9 of India France DTAA and Article 9 of India-Denmark DTAA are identically worded. Since the decision rendered by Hon'ble Bombay High Court in the case of Safmarine Containers Lines N.V (which was rendered in the context of India-Belgium DTAA) was held to be applicable to India-Denmark DTAA also by the Hon'ble Bombay High Court in the case of A.P.Moller Maersk A/S (ITA No.1306 of 2013), the Id A.R submitted that the absence of the expression "any other activity directly connected with such transportation" in the India-France DTAA ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 12 will not make any difference. We notice that the contentions of the assessee also get support from the OECD model convention discussed supra. 21. In view of the foregoing discussions, we agree with the contentions of the Ld A.R on this issue. Accordingly we hold that Inland Haulage Charges received by the assessee shall form part of income from operation of ships in international traffic and accordingly Article 9 of India-France DTAA shall apply to it. Accordingly we uphold the order passed by Ld DRP in AY 2012-13 on this issue and reverse the orders passed by it on this issue in AY 2013-14 and 2014-15.” 8. Respectfully following the decision of the Co-ordinate Bench rendered in assessee's own case in the preceding assessment years, we hold that IHC, since, forms part of income from operation of ships in International Traffic, is covered under Article-9 of the India- France Tax Treaty, accordingly, not taxable in India. These grounds are decided allowed." No contrary material has been brought on record distinguishing facts or the aforesaid decision. Respectfully following the decision of Co-ordinate Bench in assessee's own case, grounds of appeal No.2 to 4 are allowed for parity of reasons.” 10. Having gone through the decision of this Tribunal in earlier year, we note that the issue arising in the present appeal is identical and recurring in nature and has been decided in favour of the assessee by the decision of the coordinate bench of Tribunal for preceding assessment years. The Ld. DR could not point out any change in facts or law for us to take a different view vis a vis earlier years. Thus, respectfully following the order passed by the coordinate bench of the ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 13 Tribunal in assessee’s own case cited supra, we uphold the plea of the assessee and direct the AO to delete the addition on account of IHC. As a result, grounds No. 2 – 6 raised in assessee’s appeal are allowed. 11. The issue raised in grounds No. 7 – 12, by assessee is pertaining to taxability of freight charges from transportation of cargo through feeder vessels. 12. The brief facts pertaining to this issue, as emanating from the record, are that during the course of scrutiny proceedings, it was noticed by the AO that the assessee was transporting the goods by means of feeder vessels which were neither owned nor chartered by the assessee company and in doing so, it earned freight income of Rs.14,15,60,433/- which is taxable income. Therefore, he brought to tax the income of assessee from feeder vessels without any (assignment loaded on another vessels which was worked out to be Rs.1,06,17,032/- and 7.5% of it was computed at Rs.14,15,60,433/-. The Ld. DRP rejected the objections filed by the assessee, against the aforesaid addition, by following its directions rendered in assessee’s own case for preceding assessment years, after noting that in the year under consideration facts are pari materia to the earlier assessment years and the issue is still pending before higher forums. In conformity to the directions issued by learned DRP, the AO passed the final assessment order. Being aggrieved, the assessee is in appeal before us. ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 14 13. During the course of hearing, learned AR submitted that this issue is covered in favour of assessee by decisions of the coordinate bench of the Tribunal rendered in assessee’s own case for preceding assessment years. 14. On the other hand, learned DR vehemently relied upon the orders passed by the lower authorities. 15. We have considered the rival submissions and perused the material available on record. We find that similar issue was decided in favour of assessee by the coordinate bench of the Tribunal in CMA CGM SA vs ACIT (supra), for assessment year 2017–18, following judicial precedents especially that of AY. 2016-17 rendered in assessee’s own case for preceding assessment years. The relevant findings of the coordinate bench of the Tribunal, in aforesaid decision, are as under: “8. The Id.Authorized Representative of the assessee submitted that the Assessing Officer and DRP have erred in holding that freight charges for transportation of cargo through feeder vessels is income taxable in the hands of assessee under section 44B of the Act. The transportation of cargo through feeder vessels is inextricably linked to the international transportation of cargo. Therefore, freight charges for transportation of cargo through feeder vessels are covered by Article 9 of India-France DTAA. The Id.Authorized Representative of the assessee pointed that the issue is squarely covered by the order of Tribunal for the assessment years 2012-13 to 2014-15 and the order for assessment year 2015-16. The Id. Authorized Representative of the assessee further submitted that the Hon'ble Bombay High Court in ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 15 assessee's own case in appeal filed by Department in Income Tax Appeal No.2175 of 2009 decided on06/08/2012 has decided this issue in favour of assessee and has dismissed the appeal of Revenue. We find that in assessment year 2015-16 the Co-ordinate Bench following the order of Tribunal in assessee's own case for assessment years 2012-13 to 2014-15 dated 14/03/2018(supra) and the decision of Hon'ble Bombay High Court in assessee's own case held as under: "17. Facts being identical, respectfully following the aforesaid decision of the Co ordinate Bench rendered in assessee's own case, we hold that freight charges received from transportation of cargo through feeder vessels being part of shipping income in International Traffic is covered under Article-9(1) of the India-France Tax Treaty, hence, not toxable in India. In fact, the aforesaid view of the Tribunal was upheld by the Hon'ble Jurisdictional High Court while dismissing Revenue's appeal in assessee's own case in Assessment Year 2002-03 in Income Tax Appeal no. 2175 of 2009, vide judgment dated 6th August 2012. Accordingly, these grounds are allowed." [Emphasized by us) No contrary material has been brought to our notice to take a different view. Following the order of Co-ordinate Bench on this issue, ground No. 6 to 10 of the appeal are allowed for similar reasons.” 16. We note that the issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee for preceding assessment years. The Ld. DR could not show us any reason to deviate from the aforesaid decision since he could not point out any change in facts or law vis-a-vis earlier assessment years. Thus, respectfully following the order passed by the coordinate bench of the Tribunal which view was upheld by Hon’ble High Court in assessee’s own case ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 16 cited supra, we uphold the plea of the assessee and direct the AO to delete the addition on account of freight charges for transportation of cargo through feeder vessels. As a result, grounds No. 7 – 12 raised in assessee’s appeal are allowed. 17. The issue arising in grounds No. 13 – 15, raised in assessee’s appeal, is pertaining to treating the agent of assessee in India as permanent establishment of the assessee. 18. The brief facts pertaining to this issue, as emanating from the record, are that the AO noticed that the assessee’s agent in India is concluding the contract of cargo transport by issuing bill of lading, which is legally binding on the assessee. Further AO observed that agent in India is assessee’s own set up in India for the purpose of carrying out its shipping business activity in India. Therefore, according to him, the assessee is carrying out business of operation of ships in India and thus having PE in India as per Article 5 of DTAA. The Ld. DRP rejected the objection filed by the assessee, against the aforesaid findings, by following its earlier directions rendered in assessee’s own case for preceding assessment years, after taking note that in the year under consideration facts are pari materia to the earlier assessment years and the issue is still pending before higher forums. In conformity to the directions issued by Ld. DRP, the AO passed the final assessment order. Being aggrieved, the assessee is in appeal before us. ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 17 19. During the course of hearing, Ld. AR submitted that this issue is covered in favour of assessee by decisions of the coordinate bench of the Tribunal rendered in assessee’s own case for preceding assessment years. The Ld. AR pointed out that the agent has been remunerated as per Advance Pricing Agreement (hereinafter “APA”) and therefore no further adjustment is required. 20. On the other hand, Ld. DR vehemently relied upon the orders passed by the Ld. DRP & AO. 21. We have considered the rival submissions and perused the material available on record. We find that similar issue was decided in favour of assessee by the coordinate bench of the Tribunal in CMA CGM SA vs ACIT (supra), for assessment year 2017–18, which followed the decision of Tribunal is AY. 2016-17 after following judicial precedents rendered in assessee’s own case for preceding assessment years. The relevant findings of the coordinate bench of the Tribunal, in aforesaid decision, are as under: “10. Both sides heard. We find that in assessment year 2015-16 Co- ordinate Bench following the decision of Tribunal in assessee's own case for assessment year 2012-13 to 2014-15 held as under: “20. As could be seen from the aforesaid decision, the Tribunal has held that if the Indian agent has been remunerated at arm's length, it cannot be considered as agency P.E. of the assessee. It is further relevant to observe, in the advance pricing agreement between the CMA CGM Agencies India Pvt. Ltd and CBDT entered on 24th November 2015, it has been agreed that remuneration @ 18% ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 18 between the assessee and its indian agent has to be considered to be at arm's length, in the facts of the present case, it has been factually demonstrated before us that the payment made by the assessee to its indian agent is at the arm's length price of 18%. That being the case, following the aforesaid decision of the Co-ordinate Bench, we hold that the Indian Agent of the assessee cannot be considered as an agency PE. Thus, grounds are decided in favour of the assessee." [Emphasized by us) There has been no change in the facts in impugned assessment year. No material is brought on record to suggest that the transaction with Indian entity is not at arm's length. On the contrary assessee has demonstrated that transaction is as per APA therefore, no further adjustment is required. Respectfully following the decision of Co-ordinate Bench in assessee's own case for assessment year 2015-16 grounds No.11 to 13 are allowed.” 22. The issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee for preceding assessment years. The Ld. DR could not show us any reason to deviate from the aforesaid decision and could not point out any change in facts and law vis-à-vis earlier assessment year. Thus, respectfully following the order passed by the coordinate bench of the Tribunal in assessee’s own case cited supra, we uphold the plea of the assessee and accordingly, allow grounds No. 13 – 15 raised in assessee’s appeal. 23. Ground no. 16 to 20 pertaining to non-tax ability of income in the nature of IT support services (“FTS”) amount to Rs.7,60,05,380/-. 24. Facts in brief are that the AO noted that the assessee has earned income in the nature of FTS for IT support services totaling to ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 19 Rs.8,12,40,574/- and that the assessee company has filed its return of income received in the form of fees for technical services amounting to INR 8,12,40,574/- to tax at the rate of 10% plus surcharge and education cess (as per section 115A of the Act). The said amount comprises of the following: Income from software maintenance charges (IT support fees) INR 7,60,05,380/- Income from Management fees INR52,35,194 Total income offered to tax INR 8,12,40,574/- 25. With respect to the IT support fees, the assessee company has entered into IT service agreement with its India agency company i.e. CMA CGM Agencies India Pvt. Ltd. Limited (‘CCAI’). Pursuant the agreement/s, the company has rendered IT support services to CCAI with regard to the following IT systems: OCEAN — The financial IT system – LARA & DIVA — The operational IT systems/ software The IT support services provided by the company to CCAI broadly included deployment as well as IT maintenance running services in relation to such systems. The assessee submitted before AO that the income earned in the nature of IT support fees (being FTS) amounting to INR 7,60,05,380/- from the company’s Indian Agency company [i.e. CCAI] is not chargeable to tax in India by virtue of the beneficial provisions of Article 9 of India-France tax treaty and for such a preposition it relied on the decision of Tribunal (Pune) in the case of its own Indian Agency company, CCAI (ITA No.2314/PUN/2017 dated 2 January 2020) wherein the Tribunal while adjudicating similar ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 20 payment for AY 2012-13 has held that the said FTS paid by the assessee is not chargeable to tax in India as per the beneficial provisions of India-France tax treaty; and hence, on the same reasoning, the assessee was not liable to withhold any tax on the same in India. After hearing the assessee, the AO didn’t accept the contention. According to AO, the assessee has filed its return of income on 30th Nov 2018 which is well before the due date prescribed u/s139 (1) of the Act and further the assessee has not filed the revised return of income. Therefore, according to AO, without filing a revised return of income, the claim cannot be entertained by him in view of the judgement of Hon'ble Supreme Court’s decision in the case of Goetze India Ltd. V/s CIT reported in 157 TAXMAN 1(2006) wherein it has been held that for making a new claim for deduction before AO, an assessee has to file a revised return making the claim and not otherwise. Aggrieved, the assessee is before us. 26. According to Ld. AR, these grounds are relating to non- taxability of FTS received by the Appellant from its Indian agency company [CMA CGM Agencies India Private Limited ('CCAI')]. According to him, the Appellant/assessee had inadvertently offered the same to tax at the rate of 10% plus surcharge and education cess (as per section 115A of the Act) in the return of income filed for the year under consideration. In this context, he drew our attention to the decision of Co-ordinate Bench of this Tribunal (Pune) in case of CCAI (i.e. Indian agency company of the Appellant) (ITA No.2314/PUN/2017 dated 2 January 2020), wherein it was held that ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 21 the FTS paid by the assessee is not chargeable to tax in India as per the beneficial provisions of India-France tax treaty and hence, the assessee was not liable to withhold any tax on the same in India. In light of the said judicial precedent, the assessee has raised this ground of appeal for non-taxability of FTS income in India as against tax rate of 10% (plus surcharge and education cess) as specified in under section 115A of the Act as offered by the Appellant in its return of income filed for the year under consideration. According to Ld. AR the effect of this claim would be that the assessed income to that extent would be lowered when compared with the returned income and also drew our attention to similar additional ground raised by assessee for AY. 2016-17 and the fact that Tribunal had set aside the issue for de- novo consideration of AO. 27. The Ld. DR vehemently opposed admission of additional grounds of appeal raised by the assessee and the additional evidences at this belated stage and according to him it is purely a factual issue and cannot be entertained. 28. We note that the assessee in its return of income has offered to tax FTS @ 10% + surcharge and educational cess. According to assessee FTS arising from IT Services is not taxable in the light of beneficial provision in India – France tax treaty and also in the light of decision rendered by Pune Bench of the Tribunal in the case of assessee’s Indian Agency Company CMA CGM Agencies India Pvt. Ltd.(supra). By raising these grounds of appeal, the assessee contends that the ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 22 income which has been offered to tax by the assessee in return of income, was not taxable. However, AO did not entertain such a claim on the ground that assessee has not filed any revised rate of interest making such claim. For saying so, the AO relied on the decision of Hon’ble Supreme Court in Goetz India (supra). However, we note that the Hon’ble Supreme Court in Goetz India has not precluded this Tribunal to admit such a claim even if not raised before the AO. So we admit these grounds of appeal and since, this issue require fresh determination, we deem it appropriate to restore the same to Assessing Officer for de-novo examination and direct him consider the evidences filed by the assessee on this issue and after affording reasonable opportunity of hearing/opportunity to decide in accordance with law. These grounds no. 16-20 of appeal are allowed for statistical purposes. 29. Ground No. 21 & 22 pertains to levy of interest under section 234B & 234C of the Act, which are consequential in nature. Therefore, the said ground are allowed for statistical purpose. 30. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 16/01/2023. Sd/- Sd/- (M. BALAGANESH) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 16/01/2023. Vijay Pal Singh, (Sr. PS) ITA No.1820/Mum/2022 A.Y. 2018-19 CMA CGM SA 23 आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुंबई / ITAT, Mumbai