DCIT (IT)-4(2)(1), Mumbai V. M/S SAFAMARINES CONTAINER LINES N V , Mumbai

ITA 2168/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2297 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2013-2014
• Appeal Filed On: 08-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVANEESH TIWARI
• Assessee Lawyers: MANISH KUMAR KANTH
• Keywords: Business income; Double taxation relief
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI VIKAS AWASTHY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 2168/MUM/2019 ASSESSMENT YEAR: 2013 - 14 DEPUTY COMMISSIONER OF INCOME TAX(IT) - 4(2)(1), ROOM NO. 1708, 17 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021. VS. M/S SAFMARINES CONTAINER LINES N.V. C/O MAERSK LINE INDIA PVT. LTD. 12 TH FLOOR, URMI ESTATE TOWER, A - 95, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI - 400013. PAN NO. AACCS0742A APPELLANT RESPONDENT REVENUE BY : MR. AVANEESH TIWARI, DR ASSESSEE BY : MR. MANISH KUMAR KANTH, AR DATE OF HEARING : 16/03/2020 DATE OF PRONOUNCEMENT : 18/03/2020 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2013 - 14. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 58, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 144 C (3) R.W. S. 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS OVERLEAF: M/S SAFMARINES CONTAINER ITA NO. 2168/MUM/2019 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT INCOME FROM INLAND TRANSPORTATION OF CARGO WITHIN INDIA WAS COVERED UNDER ARTICLE 8(2)(B)(II) AND 8(2)(C) OF THE DOUBLE TAX AVOIDANCE AGREEMENT BETWEEN INDIA AND BELGIUM AND THEREFORE NOT TAXABLE IN INDIA U/S 44B OF THE INCOME TAX ACT, 1961. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASES, ARTICLE 8(2)(B)(II) AND 8(2)(C) OF THE DOUBLE TAX AVOIDANCE AGREEMENT BETWEEN INDIA AND BELGIUM INCLUDES WITHIN ITS AMBIT THE ACTIVITY OF INLAND TRANSPORTATION OF CARGO FROM VARIOUS PLACES WITHIN INDIA. 3. BRIEFLY STATED, THE FACTS OF THE CASE AR E THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2013 - 14 ON 26.09.2013 DECLARING TOTAL INCOME AT RS. NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) FOUND THAT THE ASSESSEE IS EARNING INCOME FROM INLAND HAULAGE CHARGES AND IS CLAIMING EXEMPTION UNDER ARTICLE 8 OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) . THE AO HELD THAT R EVENUE IS EARNED BY THE ASSESSEE ON ACCOUNT OF RECEIPT OF INLAND HAULAGE CHARGES IN INDIA IS TAXABLE AS BUSINESS PROFIT S, SINCE THE SAME IS NOT COVERED BY SECTION 44B OF THE ACT OR ARTICLE 8 OF THE DTAA BETWEEN INDIA AND BELGIUM. AS PER THE AO, THE SAME WOULD BE TAXABLE UNDER ARTICLE 7 OF THE TREATY AS BUSINESS INCOME AND SINCE THE ASSESSEE HAS AN EXCLUSIVE AGENT IN INDI A, THROUGH WHOM SUCH BUSINESS IS CARRIED OUT, IT HAS AGENCY PE AS PER ARTICLE 5 OF THE TREATY . THE ASSESSEE HAD SUBMITTED THAT TOTAL INLAND HAULAGE CHARGES COLLECTED AMOUNTED TO RS.75,73,47,458/ - DURING THE YEAR UNDER CONSIDERATION. THUS THE AO BROUGHT TO TAX THE BUSINESS INCOME OF THE ASSESSEE FROM INLAND HAULAGE CHARGES BY ESTIMATING @ 7.5% OF RS.75,73,47,458/ - . THE AO MADE AN ADDITION OF RS.5,68,01,059/ - . M/S SAFMARINES CONTAINER ITA NO. 2168/MUM/2019 3 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). WE FI ND THAT VIDE ORDER DATED 18.01.2019, THE LD. CIT(A) DIRECTED THE AO NOT TO CHARGE TAX ON INCOME SEPARATELY ON COLLECTION OF INLAND HAULAGE CHARGES IN VIEW OF THE ORDER OF THE HONBLE BOMBAY HIGH COURT, ITAT AND CIT(A) UPTO AND INCLUDING AY 2012 - 13. 5. B EFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY AGREES THAT THE PRESENT ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE HONBLE BOMBAY HIGH COURT AND ITAT FOR EARLIER YEARS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE FOR AYS 2001 - 02, 2003 - 04, 2006 - 07, 2009 - 10 AND BY THE ORDER OF THE TRIBUNAL FOR AYS 2001 - 02, 2003 - 04, 2005 - 06, 2006 - 07, 2007 - 08, 2008 - 09, 2009 - 10 AND 2 012 - 13. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THE SAME ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE HONBLE BOMBAY HIGH COURT IN ITA NO. 952 OF 2011 & ITA NO. 147 OF 2009 FOR AYS 2001 - 02 & 2003 - 04 ; ITA NO. 410 OF 2011 FOR AY 2006 - 07 ; ITA NO. 773 OF 2014 FOR AY 2009 - 10 ; ITA NO. 1741 OF 2013. ALSO WE FIND THAT THE SAME ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT MUMBAI IN ITA NO. 3701/MUM/2015 FOR AY 2001 - 02 ; ITA NO. 5460/MUM/2006 FOR AY 2003 - 04 ; ITA NO. 728/MUM/2009 FOR AY 2005 - 06 ; ITA NO. 570/MUM/2010 FOR AY 2006 - 07 ; ITA NO. 3073/MUM/2010 FOR AY 2007 - 08; ITA NO. 6650/MUM/2011 FOR AY 2008 - 09; ITA NO. 4995/MUM/2012 FOR AY 2009 - 10 AND ITA NO . 5712/MUM/2016 FOR AY 2012 - 13. M/S SAFMARINES CONTAINER ITA NO. 2168/MUM/2019 4 FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE ORDERS AND UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/03/2020. SD/ - SD/ - ( VIKAS AWASTHY ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 18/03/2020 RAHUL SHARMA, SR. P.S. 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