CHINA OCEANIC SHIPPING (GROUP ) CO,., MUMBAI V. ASST DIT (IT) 1(2), MUMBAI

ITA 2144/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1360 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 05-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR NARENDRA KUMAR
• 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 AMARJIT SINGH, JUDICIAL MEMBER ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) CHINA OCEANIC SHIPPING (GROUP) CO. C/O.COSCO (I) SHIPPING PVT. LTD. WAKEFILED HOUSE, 4 TH FLOOR, SPROTT ROAD, BALLARD ESTATE, MUMBAI 400 001. PAN:AABCC 5851F ...... APPE LLANT VS. ASSTT. DIT (INTL.TAX) 1(2), SCINDIA HOUSE, 1 ST FLOOR, ROOM NO.119, BALLARD ESTATE, MUMBAI 400 001 .... RESPONDE NT APPELLANT BY : SHRI MADHUR AGARWAL RESPONDENT BY : DR. NARENDRA KUMA R DATE OF HEARING : 05/07/2016 DATE OF PRONOUNCEMENT : 29/12/2016 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST THE ORDER OF THE A SSTT. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-1(2), MUMBAI (IN SHORT THE ASSESSING OFFICER ) PASSED UNDER SECTION 144C(13) R.W.S. 143(3) OF THE INCOM E TAX ACT, 1961 ( IN SHORT THE ACT) DATED 31/01/2014 , WHICH IS IN CONFORMITY WITH THE DIRECTION OF THE DISPUTE RESOLUTION PANNEL-1, MUMBAI DATED 02/12/20 13. 2 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED ASSESSING OFFICER ('LD. AO'), BASED ON THE DIRECTIO NS OF DISPUTE RESOLUTION PANEL - III (DRP'), GROSSLY ERRED IN DENYING THE E XEMPTION UNDER ARTICLE 8 OF THE INDIA-CHINA DTM IN RESPECT OF FREIGHT INCOME O F RS. 25,09,369/- ARISING TO THE APPELLANT FROM OPERATION OF SHIPS IN THE INT ERNATIONAL TRAFFIC IN THE CASES WHERE PART OF THE OPERATIONS ARE CARRIED OUT THROUGH FEEDER VESSELS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. AO, BASED ON DIRECTIONS OF DRP, GROSSLY ERRED IN HOLDIN G THAT APPELLANT NEED TO ESTABLISH THE CARGO- WISE LINKAGE BETWEEN FEEDER VE SSEL AND MOTHER VESSEL (OWNED / LEASED / CHARTERED BY APPELLANT) TO BE ELI GIBLE FOR EXEMPTION UNDER ARTICLE 8 OF THE INDIA-CHINA DTAA IN THE CASES WHER E PART OF THE OPERATIONS ARE CARRIED OUT THROUGH FEEDER VESSELS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. AO, BASED ON DIRECTIONS OF DRP, GROSSLY ERRED IN APPLYI NG THE PROVISIONS OF RULE 10 OF THE INCOME-TAX RULES, 1962 TO THE APPELLANT'S CASE AND PRESUMPTIVELY DETERMINING APPELLANT'S PROFIT TO BE 10 PERCENT OF GROSS FREIGHT AND INCIDENTAL RECEIPTS AND THEREBY COMPLETELY IGNORING THE PROVISIONS OF SECTION 44B OF THE ITA. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. AO, BASED ON DIRECTIONS OF DRP, GROSSLY ERRED IN TREATI NG M/S COSCO (I) SHIPPING PVT. LTD AS A PERMANENT ESTABLISHMENT OF THE APPELL ANT AS PER ARTICLE 5 OF THE INDIA-CHINA DTAA. 3. ALTHOUGH MULTIPLE GROUNDS OF APPEAL HAVE BEEN RA ISED, BUT THE DISPUTE IS ESSENTIALLY RELATING TO THE DENIAL OF EXEMPTION CLA IMED BY THE ASSESSEE IN TERMS OF ARTICLE -8 OF THE INDIA-CHINA DOUBLE TAXAT ION AVOIDANCE AGREEMENT (DTAA) IN RESPECT OF A FREIGHT INCOME OF RS.25,09. 369/- ARISING FROM OPERATION OF SHIPS IN THE INTERNATIONAL TRAFFIC IN THE CASES WHERE PART OF THE OPERATIONS ARE CARRIED OUT THROUGH FEEDER VESSELS. 3.1 IN ORDER TO APPRECIATE THE BACKGROUND OF THE DI SPUTE, THE FOLLOWING DISCUSSION IS RELEVANT. THE APPELLANT BEFORE US IS A TAX RESIDENT OF CHINA AND IS ENGAGED IN THE BUSINESS OF OPERATION OF SHIPS IN IN TERNATIONAL TRAFFIC. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSESSEE COMPA NY FILED A RETURN OF 3 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) INCOME DECLARING TOTAL INCOME OF RS.7,82,24,132/-, WHICH WAS CLAIMED AS FULLY EXEMPT ON THE STRENGTH OF ARTICLE-8 OF THE INDO-CHI NA DTAA. IN PRINCIPLE, THERE IS NO DISPUTE BETWEEN THE ASSESSEE AND THE REVENUE THAT INCOME EARNED BY THE ASSESSEE FROM CARRYING ON SHIPPING BUSINESS IS NOT LIABLE TO BE TAXED IN INDIA ON THE STRENGTH OF THE PROVISIONS OF ARTICLE-8 OF T HE DTAA BETWEEN INDIA AND CHINA AND SUCH POSITION WERE ACCEPTED IN PAST ASSES SMENT YEARS ALSO. THE DISPUTE IN THIS APPEAL IS CONFINED TO ONE SEGMENT O F FREIGHT EARNINGS OF THE ASSESSEE OF RS.25,09,369/-, ON WHICH THE EXEMPTION HAS BEEN DENIED BY THE INCOME-TAX AUTHORITIES ON THE GROUND THAT THERE WAS NO EVIDENCE TO ESTABLISH THE LINKAGES BETWEEN FEEDER VESSEL AND MOTHER VESSE L IN RESPECT OF SUCH FREIGHT EARNINGS. IN ORDER TO UNDERSTAND THE RIVAL STANDS ON THIS ASPECT, WE MAY BRING OUT THE FACTUAL MATRIX, ALBEIT, MORE ELABORATELY IN THE FOLLOWING WORDS. 3.2 AS NOTED EARLIER, ASSESSEE IS ENGAGED IN THE BU SINESS OF OPERATION OF SHIPS IN INTERNATIONAL TRAFFIC. THE VESSELS OWNED OR CHARTERED OR LEASED OR UNDER THE POOLING ARRANGEMENT OF THE ASSESSEE UNDER TAKE CARRIAGE OF GOODS FROM/TO THE INDIAN PORTS. THE ASSESSEE COMPANY EAR NED FREIGHT AND OTHER INCIDENTAL INCOMES SUCH AS DETENTION CHARGES, TERM INAL HANDING CHARGES, ETC. IN RESPECT OF THE CARGO EXPORTED FROM INDIA AS WELL AS FROM THE CARGO IMPORTED INTO INDIA WHILE CARRYING OUT THE BUSINESS OF OPERA TION OF SHIPS. ON CERTAIN OCCASIONS, THE CARGO IS TRANSPORTED FROM THE INDIAN PORT TO THE HUB PORT IN THIRD PARTY FEEDER VESSELS AND FROM THE HUB PORT TO THE P ORT OF FINAL DESTINATION IN MOTHER VESSELS WHICH ARE OWNED OR CHARTERED OR LE ASED OR UNDER POOLING ARRANGEMENT WITH THE ASSESSEE. SIMILAR ARRANGEMENT ALSO EXISTS IN VICE-VERSA CASES. AT THE STAGE OF PASSING OF DRAFT ASSESSMENT ORDER UNDER SECTION 144C R.W.S. 143(3) OF THE ACT DATED 28/03/2016, THE ASSE SSING OFFICER PROPOSED TO DENY THE EXEMPTION CLAIMED UNDER ARTICLE-8 OF THE D TAA BETWEEN INDIA AND 4 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) CHINA ON TWO ASPECTS. FIRSTLY, IN RELATION TO THE FREIGHT EARNINGS FROM CHENNAI AND KOLKOTTA PORTS AMOUNTING TO RS.1,84,20,955/-, T HE ASSESSING OFFICER CONTENDED THAT ASSESSEE HAD FAILED TO ESTABLISH LIN KAGE BETWEEN FEEDER VESSELS AND MOTHER VESSELS I.E. VESSELS WHICH ARE OWNED OR LEASED OR CHARTERED BY THE ASSESSEE. SECONDLY, IN CASE OF FREIGHT EARNINGS F ROM MUMBAI PORT AMOUNTING TO RS.64,11,75,833/-, THE ASSESSING OFFICER DENIED THE EXEMPTION ON THE GROUND THAT ASSESSEE COULD NOT FURNISH THE REQUISIT E DETAILS. IN THIS MANNER, IN THE DRAFT ASSESSMENT ORDER THE ASSESSING OFFICER CO MPUTED RS.6,59,59,479/- AS TAXABLE INCOME BY TREATING ASSESSEES COMPANYS IND IAN AGENT AS PERMANENT ESTABLISHMENT (PE) AND ATTRIBUTING PROFITS TO SUCH PE @ 10% OF SUCH RECEIPTS CONSIDERED TO BE TAXABLE IN INDIA (I.E. RS.65,95,96 ,788/-). THE ASSESSEE COMPANY HAD CARRIED THE MATTER BEFORE THE DRP, WHO VIDE ITS ORDER DATED 02/12/2013 GAVE CERTAIN DIRECTIONS TO THE ASSESSING OFFICER FOR FINALIZING THE ASSESSMENT, WHICH READ AS UNDER:- 2.5.2 IT IS SEEN THAT THE BENEFIT OF ARTICLE 8 HAS BEEN DENIED BY THE ASSESSING OFFICER TO THE ASSESSEE EITHER ON ACCOUNT OF NON PRODUCTION OF DETAILS OR NON-VERIFICATION THEREOF. FOR THE ALLOWABILITY FOR SUCH BENEFIT UND ER THE TREATY, THE LD.ARS BEFORE US CONTENDED THAT SUCH DETAILS AND DOCUMENTS BEING VER Y VOLUMINOUS WERE NOT SUBMITTED BEFORE THE ASSESSING OFFICER AND SUBMISSI ON OF DOCUMENTS AND DETAILS WERE ON SAMPLE BASIS ONLY. HOWEVER, HAD THE AO ASKED F OR SUBMISSION/PRODUCTION OF ALL THE DETAILS/DOCUMENTS TO ESTABLISH CARGO WISE CONNE CTIVITY BETWEEN FEEDER VESSEL AND MOTHER VESSEL, THE SAME COULD HAVE BEEN PRODUCED IN ALL CASES. 2.5.3 BEFORE THE DRP THE LD. ARS OF THE ASSESSEE ST ATED THAT THEY ARE IN COMPLETE READINESS TO PRODUCE DETAILS FOR ANY VERIFICATION. IT WAS NOTED THAT THE LD. ARS OF THE ASSESSEE HAD COME WITH VOLUMINOUS PRIMARY DOCUMENTS FOR THEIR SUBMISSION/VERIFICATION. ACCORDINGLY, WE DEEM IT F IT TO DIRECT THE AO TO VERIFY SUCH DETAILS/ DOCUMENTS IN RESPECT OF MUMBAI PORT AND IN RESPECT OF FEEDER VESSEL MOTHER VESSEL CONNECTIVITY TOWARDS THE CARGO IN WH ATSOEVER MANNER HE DEMANDS PASSING THE FINAL ASSESSMENT ORDER. IF THE AO IS S ATISFIED IN RESPECT OF THE DETAILS THAT HE WISHED TO VERIFY REGARDING MUMBAI PORT IN RESPEC T OF FEEDER VESSEL MOTHER VESSEL CONNECTIVITY, THEN THE BENEFIT OF ARTICLE 8 OF INDI A CHINA DTAA SHOULD BE GRANTED TO THE ASSESSEE. IN CASE OF NON SATISFACTION AND ON A RRIVING AT THE FACTUAL CONCLUSION REGARDING SUCH NON-SATISFACTION, DENIAL OF BENEFIT OF ARTICLE 8 OF THE INDIA-CHINA TREATY, COULD BE RESTORED AND NO OTHERWISE. WE DIR ECT ACCORDINGLY. 5 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) 3.3 FOLLOWING THE AFORESAID DIRECTIONS, THE ASSESSI NG OFFICER CARRIED OUT THE NECESSARY VERIFICATION EXERCISE BASED ON THE MATERI AL FURNISHED BY THE ASSESSEE. AT THE TIME OF HEARING BEFORE US, THE LD. REPRESENT ATIVE FOR THE ASSESSEE EXPLAINED THAT THE FOLLOWING DOCUMENTS WERE PRODUCE D BEFORE THE ASSESSING OFFICER TO ESTABLISH AND EVIDENCE THE LINKAGES BETW EEN THE MOTHER VESSEL AND FEEDER VESSEL IN ALL CASES WHERE FEEDER VESSELS WER E USED:- (I) CARGO TRACKING REPORT OF EACH CARGO GIVING DETAI LS OF FEEDER VESSELS AND CORRESPONDING MOTHER VESSELS INVOLVED IN CARRIAGE O F GIVEN CARGO FROM PORT OF LOADING TILL DESTINATION, INCLUDING THE HUB POR T INVOLVED. (II) OWNERSHIP DOCUMENT/POOLING AGREEMENT/CHARTER PARTY AGREEMENT/ SIMILAR OTHER DOCUMENT- ESTABLISHING OWNERSHIP OF M OTHER VESSELS. (III) BILLS OF LADING SHOWING THE DETAILS OF VESSEL S INVOLVED, PORT OF LOADING, PORT OF DISCHARGE, SHIPMENT NUMBER, ETC. 3.4 ON THE BASIS OF THE AFORESAID, THE PLEA OF THE ASSESSEE WAS THAT THE CARGO TRACKING REPORT GIVES THE DETAILS OF THE FEED ER VESSEL USED FOR TRANSPORTING CARGO FROM LOADING PORT TO THE HUB POR T, THE MOTHER VESSEL USED TO TRANSPORT CARGO FROM HUB PORT TO THE DESTINATION PORT, INCLUDING THE DATE OF DEPARTURE AND ARRIVAL OF THE FEEDER VESSEL AND THE MOTHER VESSEL. THE LD. REPRESENTATIVE FOR THE ASSESSEE HAD EXPLAINED AT TH E TIME OF HEARING THAT APART FROM THE AFORESAID DOCUMENTS SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE FURTHER T HIRD PARTY DOCUMENTS LIKE CORRESPONDENCE FROM THE HUB PORT AGENT TO ESTABLISH THE LINKAGE. IT HAS BEEN EXPLAINED THAT THE HUB PORT AGENT IS APPOINTED BY T HE ASSESSEE COMPANY TO CO- ORDINATE AND MANAGE THE TRANSIT OF THE SHIPMENTS FR OM THE MOTHER VESSEL TO 6 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) THE FEEDER VESSEL AND VICE-VERSA AT THE HUB PORT. THE HUB PORT AGENT MAKES ARRANGEMENT FOR UNLOADING OF THE CARGO AT THE HUB P ORT FROM THE MOTHER VESSEL, SEGREGATING CARGO BASED ON DESTINATION AN D LOADING IT IN THE FEEDER VESSEL FOR FURTHER TRANSPORTATION AND VICE-VERSA. IN THE PROCESS OF TRANSIT OF SHIPMENTS, THE HUB PORT AGENT SENDS EMAILS TO RESPE CTIVE COUNTRY AGENTS THE INFORMATION OF MOVEMENT OF THE SHIPMENT FROM FEEDER VESSEL TO MOTHER VESSEL AND VICE-VERSA. THE SAID CORRESPONDENCE WAS PRODU CED BY THE ASSESSEE IN RESPECT OF ENTIRE FREIGHT EARNINGS EXCEPT IN RESPEC T OF FREIGHT EARNINGS OF RS.25,09,369/-. THE ASSESSING OFFICER, WHILE PASSI NG FINAL ASSESSMENT ORDER U/S. 144C(13) R.W.S. 143(3)OF THE ACT DATED 31/01/ 2014, DENIED THE EXEMPTION UNDER ARTICLE-8 OF THE INDO-CHINA DTAA IN RELATION TO THE SAID FREIGHT EARNINGS. AS A CONSEQUENCE, THE ASSESSING OFFICER WORKED OUT THE TAXABLE INCOME AT RS.2,50,940/-, WHICH WAS 10% OF THE NON-EXEMPT FREI GHT EARNINGS OF RS.25,09,369/-. NOT BEING SATISFIED WITH THE SAID ACTION OF THE ASSESSING OFFICER, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE HAS VEHEMENTLY POINTED OUT THAT THE DOCUMENTS OF CARGO TRACKING RE PORT, DOCUMENTS OF OWNERSHIP OF THE VESSELS, BILLS OF LADING, ETC. PRO DUCED BY THE ASSESSEE WERE ENOUGH TO ESTABLISH THE LINKAGES AND, THEREFORE, TH E EXEMPTION OUGHT TO HAVE BEEN ALLOWED BY THE ASSESSING OFFICER WITH RESPECT TO THE ENTIRE FREIGHT EARNINGS. THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN ANY CASE, THE HUB PORT AGENTS CORRESPONDENCE , WHICH WAS INS ISTED BY THE ASSESSING OFFICER WAS ALSO PRODUCED IN RESPECT OF 99.62% OF F REIGHT EARNINGS AND THAT IT WAS ONLY IN RELATION TO A SMALL AMOUNT OF RS.25,09, 369/- OUT OF TOTAL FREIGHT EARNINGS OF RS.65,95,96,788/- THAT THE ASSESSEE COU LD NOT PRODUCE THE CORRESPONDENCE. IT WAS POINTED OUT THAT THE ASSESS ING OFFICER NOT HAVING 7 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) FOUND ANY INFIRMITY WITH RESPECT TO THE 99.62% OF C ASES, IN THE BALANCE OF THE CASES, THE NON-PRODUCTION OF THE CORRESPONDENCE OF THE HUB PORT AGENTS WOULD NOT JUSTIFY THE DENIAL OF EXEMPTION. THE LD. REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY ARGUED THAT NO SUCH ADDITION H AS BEEN MADE EITHER IN THE EARLIER OR EVEN SUBSEQUENT YEARS UNDER IDENTICA L SITUATION AND, THEREFORE, THE APPROACH OF THE ASSESSING OFFICER IN THE INSTAN T YEAR IS NOT AT ALL JUSTIFIED. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESE NTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE STAND OF THE ASSESSING OFFICER BY POINTING OUT THAT THE VERIFICATION EXERCISE CARRIED OUT REVEALED THAT IN RELATION TO THE FREIGHT EARNINGS OF RS.25,09,368/-, THE LINKAGE COULD NOT B E ESTABLISHED FROM THE MOTHER VESSEL TO FEEDER VESSEL OR VICE-VERSA, AND, THEREFORE, THE DENIAL OF EXEMPTION UNDER ARTICLE-8 OF INDO-CHINA DTAA WAS JU STIFIED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. FACTUALLY SPEAKING, THERE IS NO DISPUTE BETWEEN ASSESSEE AND THE REVENU E IN SO FAR AS THE ELIGIBILITY OF THE ASSESSEE FOR THE BENEFITS OF ART ICLE-8 OF INDO-CHINA DTAA IS CONCERNED. THE LIMITED DISPUTE BEFORE US IS RELATE D TO EXEMPTION WITH RESPECT TO THE FREIGHT EARNINGS OF RS.25,09, 369/-. AS PER THE REVENUE THE SAID FREIGHT EARNINGS DO NOT QUALIFY FOR EXEMPTION AS THE REQUIS ITE MATERIAL DOES NOT ESTABLISH THE LINKAGES BETWEEN FEEDER VESSEL AND MO THER VESSEL OR VICE-VERSA. IN THIS CONTEXT, WE FIND THAT FOR BALANCE OF THE FR EIGHT EARNINGS THE EXEMPTION HAS BEEN ALLOWED BY THE ASSESSING OFFICER CONSIDERI NG THE MATERIAL FURNISHED BY THE ASSESSEE. WE HAVE ALREADY ADVERTED TO SUCH MATERIAL IN THE EARLIER PARAS. WITH RESPECT TO THE IMPUGNED EARNINGS OF RS .25,09,369/-, THE ONLY DIFFERENCE IS THAT ASSESSEE COULD NOT PRODUCE THE C ORRESPONDENCE FROM THE HUB PORT AGENT IN SUPPORT TO ESTABLISH THE LINKAGE. IN OUR CONSIDERED OPINION, 8 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) THE CORRESPONDENCE OF THE HUB PORT AGENT, IS NOT CRUCIAL TO ESTABLISH THE LINKAGE BETWEEN FEEDER VESSEL AND MOTHER VESSEL AND VICE-VERSA. THE PRIMARY EVIDENCE IN THIS CONTEXT IS NAMELY, THE FOLLOWING; I.E. CARGO TRACKING REPORT OF EACH CARGO, WHICH ESTABLISHES LINKAGE AND MOVEMENT OF CARGO FROM PORT OF LOADING TO FINAL DESTINATION INCORPORATING THE DETA ILS OF FEEDER VESSEL AND CORRESPONDING MOTHER VESSEL INVOLVED IN TRANSPORTAT ION OF CARGO FROM PORT OF LOADING TILL THE FINAL DESTINATION INCLUDING THE HU B PORT. FURTHER, THE OWNERSHIP DOCUMENT OR POOLING ARRANGEMENT OR CHARTER PARTY A GREEMENT, ETC. ESTABLISH THE OWNERSHIP OF THE RELEVANT MOTHER VESSEL. THIRD LY, THE BILLS OF LADING SHOW THE DETAILS OF THE VESSELS INVOLVED, PORT OF LOADIN G , PORT OF DISCHARGE, SHIPMENT NUMBER, ETC. SUCH PRIMARY EVIDENCE WAS AVAILABLE T O THE ASSESSING OFFICER IN RESPECT OF ALL THE FREIGHT EARNINGS. THE EVIDENCE B Y WAY OF CORRESPONDENCE/EMAILS OF THE HUB PORT AGENT CAN AT BEST BE IN SUPPORT OF THE AFORESAID PRIMARY EVIDENCE, BUT THE ABSENCE OF SUCH CORRESPONDENCE WOULD NOT DISTRACT FROM THE INFERENTIAL VALUE OF THE PRIM ARY EVIDENCE IN THE FORM OF THE AFORESAID THREE DOCUMENTS. THEREFORE, THE ACTI ON OF THE ASSESSING OFFICER TO DENY THE BENEFIT IN RELATION TO RS.25,09,369/- MERELY IN THE ABSENCE OF COPIES OF CORRESPONDENCE BY THE HUB AGENT IS NOT JU STIFIED ESPECIALLY CONSIDERING THE FACT THAT THE PRIMARY EVIDENCES LEA D BY THE ASSESSEE SHOWING LINKAGES NAMELY, TRACKING REPORTS FROM REAL TIME CA RGO TRACKING SYSTEM, ETC. HAVE NOT BEEN FOUND TO BE UNTRUE. AT THE TIME OF H EARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE HAD EXPLAINED THAT IN THE PRESENT CASE, THE ONLY HUB PORT INVOLVED IS SINGAPORE AND CARGO REPOR TS AVAILABLE WITH THE ASSESSING OFFICER CLEARLY SHOW THE MOVEMENT OF CARG O INCLUDING DETAILS AND NAMES OF FEEDER VESSEL AND MOTHER VESSEL THROUGH WH ICH THE GIVEN CARGO WAS MOVED FROM PORT OF LOADING TILL THE FINAL PORT OF DISCHARGE, THE DATE AND TIME 9 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) OF DEPARTURE AND ARRIVAL OF VESSELS AT LOADING PORT , HUB PORT AND PORT OF DISCHARGE, ETC. IN OUR CONSIDERED OPINION, HAVING REGARD TO THE MATERIAL BEFORE THE ASSESSING OFFICER, THERE WAS NO JUSTIFICATION T O INFER THAT THE REQUISITE LINKAGES BETWEEN MOTHER VESSEL AND FEEDER VESSELS C OULD NOT BE ESTABLISHED WITH RESPECT TO THE FREIGHT EARNINGS OF RS.25,09,3 69/-. IN COMING TO SUCH CONCLUSION, WE ARE ALSO CONSCIOUS OF THE UNCONTR OVERTED ASSERTION MADE BY THE LD. REPRESENTATIVE FOR THE ASSESSEE, AT THE TIM E OF HEARING, THAT IN THE EARLIER AND SUBSEQUENT YEARS, ON IDENTICAL FACTS, T HE ASSESSING OFFICER HAD ALLOWED THE BENEFIT OF ARTICLE-8 OF THE INDO-CHINA DTAA ON SUCH FREIGHT EARNINGS. 6.1 FOR ALL THE ABOVE REASONS, WE THEREFORE, DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF ASSESSEE FOR EXEMPTION UNDER ART ICLE-8 OF INDO-CHINA DTAA EVEN WITH RESPECT TO THE FREIGHT EARNINGS OF RS.25, 09,369/- ARISING TO THE ASSESSEE FROM OPERATION OF SHIPS IN THE INTERNATION AL TRAFFIC IN CASES WHERE PART OF THE OPERATIONS ARE CARRIED-OUT THROUGH FEEDER VE SSELS. ACCORDINGLY, ASSESSEE SUCCEEDS ON THIS ASPECT. 7. RESULTANTLY, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/12/2016 SD/- SD/- ( AMARJIT SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 29/12/2016 VM , SR. PS 10 ITA NO.2144/MUM/2014 (ASSESSMENT YEAR 2010-11) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI