The ITO, Ward-2(5), Baroda V. Shri Sainani Vivek Gope, Baroda

ITA 2278/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6251 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 23-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHRY
• Assessee Lawyers: P G SHAH
• Keywords: Residential status; Double taxation relief
• Section: 194C; 90; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI D K TYAGI,JM &SHRI A N PAHUJA, AM ITA NO.2278/AHD/2009 WITH C O NO.195/AHD/2009 (ASSESSMENT YEAR:-2005-06) INCOME-TAX OFFICER, WARD- 2(5), 1 ST FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA V/S SHRI SAINANI VIVEK GOPE 202, SHIV SHANTI COMPLEX, SAMPATRAO COLONY, BARODA PAN: AGRPS 7886 F [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI M R CHAUDHRY, SR. DR ASSESSEE BY:- SHRI P G SHAH, AR O R D E R A N PAHUJA: THE APPEAL BY THE REVENUE AND THE CORRESPONDING CROSS-OBJECTION[CO] BY THE ASSESSEE AGAINST AN ORD ER DATED 22- 04-2009 OF THE LD. CIT(APPEALS)-II, BARODA, FOR TH E ASSESSMENT YEAR 2005-06,RAISE THE FOLLOWING GROUNDS:- ITA NO.2278/AHD/09[REVENUE] [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CLAIM OF ASSESSEE OF RS.88,77,737/- U/S 40(A)(IA) O F THE ACT TREATING THAT THE SAID PAYMENT IS COVERED U/S 172 O F THE ACT AND D.T.A.T. [2] THE LD. CIT(A) FAILED TO APPRECIATE THAT THE AB OVE PAYMENTS WERE NOT COVERED U/S 172 OF THE ACT BUT THEY WERE COVERE D U/S 194 C OF THE ACT. [3] THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIM IN APPEAL : THE ORDER OF THE CIT(A) ON THE ABOVE ISSUES MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2 ITA NO.2278/A/09 WIT H CO 195/A/09 C.O.NO.195/AHD/2009[ASSESSEE] [1] ON FACTS OF THE CASE & IN LAW, THE LEARNED C.I .T. (APPEAL) -II, BARODA HAS RIGHTLY ALLOWED THE CLAIM OF EXPENSES OF RS.88,77,737/- (DISALLOWED BY ITO, WARD 2(5) BARODA INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT). BASED ON CONCLUSION UPON APPRECIATION OF THE EVIDENCE AND HELD THE PAYMENTS MADE TO FOREIGN SHIPPING LINES OR AGENTS THEREOF ARE COVERE D U/S 172 READ WITH CIRCULAR NO. 723 DATED 19-9-95 AND IN VIEW OF SPECIFIC PROVISION OF ARTICLE IN D.T.A HAS PROVIDED U/S 90 I S NOT TAXABLE IN INDIA, WILL HAVE AN OVERRIDING EFFECT OVER ALL OTHE R PROVISIONS WHEN SAID PROVISIONS ARE EVOKED AND THEREFORE SEC 194C I S NOT APPLICABLE. [2] THE ABOVE PAYMENTS ARE MADE TO LOCAL RESIDENT A GENTS OF NON- RESIDENT SHIPPING COMPANIES ARE RECEIVED ON BEHALF OF NON- RESIDENT SHIPPERS ARE PASSED ON TO THE AGENTS U/S 1 72 IN RESPECT OF SUCH PAYMENTS ARE ON BEHALF OF THE SHIPPING LINE S WHICH ARE EXCLUDED AND CANNOT BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF WORKING OUT THE DEFAULT OF THE ASSESSEE IN NOT D EDUCTING TAX U/S 194C OF THE ACT. THE REQUIREMENT OF TDS WOULD ARISE ONLY IF THE IMPUGNED PAYMENT TO NON-RESIDENT IS CHARGEABLE TO T AX IN INDIA. [3] THE RESPONDENT / APPLICANT CRAVES LEAVE TO ADD TO, AMEND OR ALTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED : THE ORDER OF THE LEARNED C.I.T. (APPEAL) - II, BARO DA BE RESTORED . 2. ADVERTING TO GROUND NOS. 1 & 2 IN THE APPEAL, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOM E OF RS.4,33,250/- FILED ON 07-10-2005 BY THE ASSESSEE, A PROPRIETOR OF TWO FIRMS, VIZ. M/S GOODWIN LOGISTICS AND M/S GAYAT RI ASSOCIATES, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT], WAS SELECTE D FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ISSUE D ON 19-10-2006. THE ASSESSEE WAS CARRYING ON THE BUSINESS AS A CLEA RING AND FORWARDING AGENT IN M/S GOODWIN LOGISTICS AND THE B USINESS OF EXPORT TRADING IN M/S GAYATRI ASSOCIATES. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER [AO I N SHORT] NOTICED THAT THE ASSESSEE PROVIDED LOGISTICS SERV ICES RELATING TO EXPORT/IMPORT VIZ. TRANSPORTATION, WAREHOUSING, PAC KAGING, CUSTOM CLEARANCE, 3 ITA NO.2278/A/09 WIT H CO 195/A/09 ORGANIZING OF CONTAINER WITH SHIPPING LINES, ARRANG EMENT OF LABOUR FOR OFFLOADING / LOADING CARGO ETC.. THE ASSESSEE EXPLAINED THAT THE LOGISTIC AGENCY INCOME WAS EARNED FROM SERVICES OF CUSTOM CLEARANCE ONLY WHILE LOGISTIC CHARGES INCOME IS FROM ALL OTHER SERVICES, INCLUDING TRANSP ORTATION / PACKING / LABOUR / SHIPPING LINE SERVICES. IT WAS SUBMITTED THAT HE PA ID LOGISTICS CHARGES TO OTHER PARTIES FROM WHOM HE HAD TAKEN ALL THE ABO VE SERVICES. TO A QUERY BY THE AO AS TO WHY TDS WAS NOT DEDUCTED FR OM THE PAYMENTS MADE TO THE VARIOUS PARTIES TO WHOM LOGIST ICS CHARGES WERE PAID AS THEY WERE ACTING AS CONTRACTORS FOR TH E ASSESSEE, IT WAS SUBMITTED THAT M/S GLOBAL MARIN AGENCIES ; U.T. WORLDWIDE I.P. LTD. ; R.C. GUPTA BROTHERS & KANDLA HIGHWAY TRANSPORT CO. RAISED DEBIT NOTE FOR THE REIMBURSEMENT OF PAYMENTS MADE ON THEIR BEHALF FOR TRANSPORTING GOODS OF THE CUSTOMERS ON VARIOUS OCCASIONS DURING THE FINANCIAL YEAR 2004-05. THESE PARTIES DID NOT PROVIDE ANY SERVICES IN THE COURSE OF THEIR OWN BUSINESS OR BEING REQUIRED BY OTHERS AND THE RELATIONSHIP BETWEEN THE CONTRACTOR & CONTRACTEE DID NOT EXIST AND THE REIMBURSEMENT OF EXPENSES DID NOT INVOLVE CARRYING OUT OF 'WORK WITHIN THE MEANING OF SAID TERM IN SECTION 19 4 C OF THE ACT. ON PERUSAL OF THE CHART AND THE BILLS / DEBIT NOTES PRODUCED B Y THE ASSESSE, THE AO NOTICED THAT THE ASSESSEE MADE PAYMENTS UND ER THE FOLLOWING HEADS: AIR/ SEA FREIGHT CHARGES CARGO CARTING GOVT. CHARGES DOCUMENT CHARGES CFS/CWC CHARGES CUSTOM DUTY DO CHARGES THC CHARGES B L CHARGES MICT CHARGES COURIER CHARGES EXAMINATION CHARGES BROKERAGE TRANSPORTATION CHARGES AGENCY CHARGES SERVICE TAX 8% 4 ITA NO.2278/A/09 WIT H CO 195/A/09 2.1 THE ASSESSEE FURTHER EXPLAINED THAT THE PARTI ES TO WHOM PAYMENTS WERE MADE WERE EITHER NON RESIDENT PARTIES OR WERE AGENTS OF THE NON RESIDENTS AND THEREFORE, THE RECO VERY OF TAXES IN SUCH CASES WOULD BE COVERED U/S 172 OF THE ACT AND NOT UNDER ANY PROVISIONS OF CHAPTER XVII B OF THE ACT. TO A FURTH ER QUERY BY THE AO,SEEKING DOCUMENTARY EVIDENCES IN SUPPORT OF HIS EXPLANATION THAT THE PAYEE PARTIES WERE EITHER NON-RESIDENT PARTIES OR WERE AGENTS OF NON RESIDENT PARTIES, THE ASSESSE MERELY FURNISHED COPIES OF PROFILES OF SOME OF THE PARTIES AS AVAILA BLE ON THEIR RESPECTIVE WEBSITES. IN THESE CIRCUMSTANCES, THE AO ISSUED A SHOW CAUSE NOTICE AS TO WHY THE EXPENSES DEBITED UNDER L OGISTICS CHARGES AND AGENCY CHARGES SHOULD NOT BE DISALLOWED IN TERMS OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IN RESPONSE, THE ASSESSEE WHILE RELYING UPON CIRCULAR NO. 723 DATED 19-09-1995 SUBMITTED THAT ONLY THE SHIPPING CORPORATION OF INDIA LTD. WA S AN INDIAN SHIPPING CO. AND ALL OTHER SHIPPING LINES IN THIS FIELD WERE FOREIG N SHIPPING COMPANIES & PERFORMING THE ACTIVITIES DIRECTLY OR THROUGH THEIR AGENTS. SINCE THEY DID BUSINESS WITH FOREIGN SHIPPING COMPANIES OWNED BY N ON-RESIDENTS, THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX ON PAYMENTS M ADE TO THEM AND THEREFORE, PROVISIONS SECTION 40(A)(IA) OF THE ACT WERE NOT APPLICABLE . HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESS EE ON THE GROUND THAT ALL THE PARTIES HAD LOCAL ADDRESSES OF VADODARA, MUMBAI OR GANDHIDHAM AND THERE WAS NO EVIDENCE THAT THESE PARTIES WERE FORE IGN COMPANIES OR THEIR AGENTS FALLING WITHIN THE PROVISIONS OF SEC. 172 O F THE ACT. ACCORDINGLY, THE AO CONCLUDED THAT ALL THE PARTIES TO WHOM THE ASSESSEE MADE PAYMENTS OF LOGISTICS CHARGES WERE RESIDENT AND ORDINARILY RESI DENT PERSONS AND THEREFORE, NOT COVERED U/S 172 OF THE ACT. RATHER PROVISIONS O F SEC. 194C WERE APPLICABLE, THE PARTIES TO WHOM THE ASSESSEE MADE PAYMENTS OF LOGISTICS CHARGES WERE MERELY ACTING AS CLEARING AND FORWARDING AGENTS FOR THE ASSESSEE IN THE SAME MANNER AS WAS IN THE CASE OF HIS CLIENTS FROM WHOM HE DERIVED LOGISTICS INCOME. PAYMENTS TO CLEARING AND FORWARDING AGENTS FOR CARRIAGE OF GOODS BEING SUBJECT TO TAX DEDUCTION AT SOURCE UNDER 194 C OF THE ACT AND THE ASSESSEE HAVING FAILED TO DO SO, THE AO DISALLOWE D THE FOLLOWING AMOUNTS: 5 ITA NO.2278/A/09 WIT H CO 195/A/09 . DISALLOWANCE OUT OF LOGISTICS CHARGES PAID BY GOOD WIN LOGISTICS RS.1,19,21, 847/- DISALLOWANCE OUT OF LOGISTICS CHARGES PAID BY GAYATRI ASSOCIATES RS. 2, 97,200/- --------------------- RS.1,22,19,047/- 3. ON APPEAL, WHILE REITERATING THEIR SUBMISSIONS BEFORE THE AO, THE ASSESSEE CONTENDED THAT THE PAYMENTS WERE MADE TO NON- RESIDENT SHIPPING COMPANIES OR TO THEIR AGENTS AND AS PER CI RCULAR F. NO. 733 / 105 / 95 - TPL DATED SEPTEMBER, 19TH 1995 ISSUED BY THE CBDT, IN SUCH CASES THE PROVISIONS OF SEC. 172 SHALL APPLY AND THOSE OF SEC . 194C & 195 WILL NOT APPLY. IT WAS SUBMITTED THAT THE REQUIREMENT OF DEDUCTION OF TAX AT SOURCE WOULD ARISE ONLY IF THE IMPUGNED PAYMENT TO NON RESIDENT IS CHA RGEABLE TO TAX IN INDIA. ONCE THERE WAS NO LIABILITY TO DEDUCT TAX, THE PROV ISION OF SECTION 40(A)(IA) WERE NOT APPLICABLE AND THE AMOUNT WAS ALLOWABLE AS EXPE NDITURE INCURRED IN CONNECTION WITH THE BUSINESS. IT WAS POINTED OUT T HAT PROVISIONS OF SECTION 172 WOULD NOT BE APPLICABLE IN A CASE WHERE THERE EXIST ED A DOUBLE TAXATION AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND FOREI GN NATION AS PROVIDED IN SEC. 90 THE ASSESSEE FURTHER DID NOT PRESS DISALL OWANCE OF RS. 28,88,845/- AS DETAILED ON PAGE 11 OF THE IMPUGNED ORDER AND RESTR ICTED ITS CLAIM ONLY TO AN AMOUNT OF RS.93,30,202/- PAID TO THE FOLLOWING PART IES SR. NO. NAME OF PARTY AMOUNT ON WHICH WE CLAIM EXEMPTION 1 U T WORLD WIDE I PVT. LTD. 22,97,336/- 2 EVERGREEN INDIA PVT. LTD 68,652/- 3 MERIDIAN SHIPPING AG. PVT. LTD. 1,31,880/- 6 ITA NO.2278/A/09 WIT H CO 195/A/09 4 IIC CONTAINER IND. LTD. 83,370/- 5 TRANSWORLD SHIPPING SERV P LTD. 3,02,584/- 6 SATRUN SHIPPING AG PVT. LTD. 3,91,061/- 7 PERMA CONTAINER LINE 1,01,990/- 8 MARITIME SERV PVT. LTD. 28,130/- 9 ALIGATOR SHIPPING SERV PVT. LTD. 71,905/- 10 APL INDIA PVT. LTD. 52,50,038/- 11 HIND FREIGHT SERV PVT. LTD. 2,59,571/- 12 MAXICON SHIPPING AG PVT. LTD. 2,92,194/- 13 SEAHAWK LINES PVT. LTD. 51,491/- TOTAL RS. 93,30,202/- 3.1. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ALSO FILED THE FOLLOWING RELEVANT EVIDENCE IN SUPPORT OF THEIR CLA IM AS DETAILED IN THE IMPUGNED ORDER AND EXTRACTED HEREUNDER:- 7 ITA NO.2278/A/09 WIT H CO 195/A/09 I.U.T. WORLDWIDE I PVT. LTD.: SR. NO. NAME OF THE AGENT NAME OF NON- RESIDENT SHIPPING CO'S. HEAD QUARTER IN TOTAL AMOUNT CLAIMED 5 U T WORLD WIDE I PVT. LTD, UNIT NO. 461, 462, 471, 472 6TH & 7TH FLOOR, ANDHERI KURLA ROAD, ANDHEIR EAST, MUMBAI UTI NETHERLAND HOLDINGS BV TUPOLEVLAAN 48,1119 NZ SCHIPOL RIJ NETHERLAND NETHERLAN D 22,97,336/- TOTAL RS (A) 22,97,336/- 1 PRESS RELEASE 17-4-2003 MINISTRY OF FINANCE AND C OMPANY AFFAIRS (FIPB) CLEARS 47 PROPOSALS INCLUDING AIR FR EIGHT AND OCEAN FREIGHT FORWARDING. 2 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 3 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES. 4 XEROX COPY OF BILL OF LADING. 5 U.T. WORLDWIDE (I) PVT. LTD. IS AN AGENT WORKING FOR THE PRINCIPAL M/S. UTI NATHERLAND B.V. (CORPORATE OFFICE) & OPERA TIONS) A MSTERDAM (AMS) THE CERTIFICATE IS ATTACHED. THE APP ELLANT HAS MADE PAYMENT TO A PERSON, WHO IS AUTHORIZED TO ISSU E BILL OF LADING ON BEHALF OF THE PRINCIPAL. 6 INDIA HAS ENTERED INTO A DOUBLE TAXATION AVOIDANC E AGREEMENT WITH NETHERLAND (1989) 177 ITR ST. 72.WHEREIN IT IS STATED IN ARTICLE 9 THAT INCOME OF AN ENTERPRISE OF A CONTRAC TING STATE FROM THE OPERATION CF SHIPS IN INTERNATIONAL TRAFFIC SHA LL BE TAXABLE ONLY IN THAT STATE. II.EVERGREEN INDIA P. LTD.: 100% RELIEF IN ACCORDANCE WITH PITA AGREEMENT (CERT IFICATE PRODUCED): SR.NO. NAME OF PARTY AMOUNT RS. CERTIFICATE REF. 8 ITA NO.2278/A/09 WIT H CO 195/A/09 7. EVERGREEN INDIA P. LTD 608, PREMIER CHAMBERS, R C DUTT,ROAD,ALKAPURI, VADODARA 68,652/- ISSUED BY ASST. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 1(2) MUMBAI DATED 12-08- 2004. 1 BEST TEAM SHIPPING CO. LTD USEFUL TOOLS WORLDWIDE CONTAINER LINERS. 2 INDIVIDUAL COMPANY WISE INVESTOR RELATION. III. MERRIDIAN SHIPPING AGENCY: SR NO. NAME OF THE AGENT NAME OF NON- RESI. SHIPPING COS. HEAD QUARTER IN TOTAL AMOUNT CLAIMED MERRIDIAN SHIPPING IGNAZIO MESSINA & C. ITALY 1,31,880/- 8 AGENCY PVT. LTD.** 613, SIDDHARTH COMPLEX, ALKAPURI, VADODARA ITALY (GENOA) H Q IN MUMBAI 1 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES. 2 XEROX COPY OF BILL OF LADING. 3 INDIA HAS A DTAA WITH GENEVA ITALY (1996) 220 ITR 220 ST. 3 WHEREIN IT IS STATED IN ARTICLE 9 THAT INCOME OF AN ENTERPRISE OF A CONTRACTING STATE FROM THE OPERATION OF SHIPS IN IN TERNATIONAL TRAFFIC SHALL BE TAXABLE ONLY IN THAT STATE. 9 ITA NO.2278/A/09 WIT H CO 195/A/09 IV. IIC CONTAINER LINES: SR. NO. NAME OF THE AGENT NAME OF NON-RESI. SHIPPING CO. HEAD QUARTER IN TOTAL AMOUNT CLAIMED 10 IIC CONTAINER LINES A 1004, PREMIUM HOUSE, OPP. GANDHIGRAM RLY. STN. AHMEDABAD REGIONAL QUARTER IN SINGAPORE: IIC CONTAINER LINES (S) PTE. LTD. BRANCH IN INDIA: IIC CONTAINER LINE P. LTD. SINGAPORE 83,370 1 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES. 2 XEROX COPY OF BILL OF LADING. 3 IIC CONTAINERS LINES PVT. LTD. IS AN AUTHORIZED A GENT OF IIC CONTAINERS LINES (S) PVT. LTD. WHO IS REGULARLY FIL ING RETURNS ON INCOME BASED ON PROVISIONS OF SECTION 172 OF I T AC T 1961. THE CERTIFICATE IS ATTACHED. 4 INDIA HAS ENTERED INTO A DTAA WITH SINGAPORE (199 4) 209 ITR ST. 1 WHEREIN IT IS STATED IN ARTICLE 8 THAT PROFIT DER IVED BY AN ENTERPRISE OF A CONTACTING STATE FROM THE OPERATION OF SHIPS OR AN AIRCRAFT IN AN INTERNATIONAL TRAFFIC SHALL BE TAXAB LE ONLY IN THAT STATE. V. TRANSWORLD SHIPPING SERVICES (I) PVT. LTD.: SR. NO. NAME OF THE AGENT NAME OF NON-RESI. SHIPPING CO. HEAD QUARTER IN TOTAL AMOUNT CLAIMED 11 TRANSWORLD SHIPPING SERVICES (I) PVT. LTD. 613, SIDDHARTH COMPLED, ALKAPURI, VADODARA REPRESENTING IN INDIA FOR UNITED ARAB SHIPPING COMPANY (SAG), SHIPPING LINE JOINTLY OWNED BY THE GOVERNMENT OF KUWAIT, QATAR, BAHRIN, UAE, KUWAIT, OCEAN FREIGHT CHARGES PAID TO UNITED ARAB SHIPPING CO. (SAG) 3,02,584/- 10 ITA NO.2278/A/09 WIT H CO 195/A/09 SAUDI ARABIA & IRAQ (HAVING HEAD QUARTER IN MUMNBAI) 1 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 2 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES. 3 XEROX COPY OF BILL OF LADING. 4 INDIA HAS ENTERED INTO DTAA WITH DUBAI (UAE) (199 4) 205 ITR ST. 49 WHEREIN IT IS STATED IN ARTICLE 8 THAT PROFIT DE RIVED BY AN ENTERPRISE OF A CONTACTING STATE FROM THE OPERATION BY THAT ENTERPRISE OF SHIPS IN INTERNATIONAL TRAFFIC SHALL BE TAXABLE ONLY IN THAT STATE. VI. SATURN SHIPPING AGENCY PLTD.: SR NO. NAME OF THE AGENT NAME OF NON- RESI. SHIPPING GO'S. HEAD QUARTER IN TOTAL AMOUNT CLAIMED 12. SATURN SHIPPING AGENCY P. LTD,239, RUPAM BLDG, 5TH FLOOR, PD'MELLO RD, FORT, MUMBAI P. T. SATURN SHIPPING INDONESIA BASED IN JAKARTA. ADD : 2ND FLOOR WISMA GANADARIA JALAN GANDARIA III NO. 7-08 JAKARTA SELATAN 12130 INDONESIA JAKARTA 3,91,061/- 1 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 2 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES. 3 XEROX COPY OF BILL OF LADING. 4 SATURN SHIPPING AGENCY PVT. LTD., WORKING AS AN A GENT AS CORPORATE / PRINCIPAL OFFICE OF P T SATURN SHIPPING INDONESIA ACTING ON THEIR BEHALF CERTIFICATE IS ATT ACHED; TO WHOM THE ASSESSEE HAS PAID OCEAN FREIGHT, THC, DETENTION & INCIDENTAL CHARGES. 11 ITA NO.2278/A/09 WIT H CO 195/A/09 VII. PERMA CONTAINER LINE LTD.: SR. NO. NAME OF THE AGENT NAME OF NON- RESI. SHIPPING CO'S. HEAD QUARTER IN TOTAL AMOUNT CLAIMED 13. PERMA CONTAINER LINE LTD** ROOM - 100, RISHABH CENTRE, 1ST FLOOR, PLOT NO. 93, SEC. 8, CANDHIDHAM, KUTCH PERMA CONTAINER (UK) LINE LTD U.K. ADD : P B NO 23966, DUBAI, UAE DUBAI U.A.E 1,01,090/- 1 BEST TEAM SHIPPING CO. LTD USE FULL TOOLS WORLDWI DE CONTAINER LINERS. 2 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 3 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES. 4 XEROX COPY OF BILL OF LADING. 5 INDIA HAS ENTERED INTO DTAA WITH DUBAI (UAE) (199 4) 205 ITR ST. 49 WHEREIN IT IS STATED IN ARTICLE 8 THAT PROFIT DE RIVED BY AN ENTERPRISE OF A CONTACTING STATE FROM THE OPERATION BY THAT ENTERPRISE OF SHIPS IN INTERNATIONAL TRAFFIC SHALL BE TAXABLE ONLY IN THAT STATE. VIII. MARITIME SERVICES PVT. LTD.: 14 MARITIME SERVICES P LTD. 28,130/- ISSUED BY DY. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 2(1) MUMBAI DT. 16-04-2004. 1 BEST TEAM SHIPPING CO. LTD USE FULL TOOLS WORLDWI DE CONTAINER LINERS. 2 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 3 MARITIME SERVICES PVT. LTD IS THE AGENT OF RCL FE EDER PVT. LTD., AUSTRALIA LINER - GENERAL STEAMSHIP AND CHARTERING AGENTS TO WHOM WE HAVE PAID OCEAN FREIGHT, THC & OTHER CHARGE S. 12 ITA NO.2278/A/09 WIT H CO 195/A/09 IX. ALLIGATOR SHIPPING SERVICES PVT. LTD. 15. ALLIGATOR SHIPPING SERVICES PVT. LTD. 71,905/- ISSUED BY DY. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 2(1) MUMBAI DT. 03-06-2004. 1 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 2 INDIA HAS ENTERED DOUBLE TAXATION AVOIDANCE AGREE MENT WITH SINGAPORE (1994) 209 ITR ST. 1 WHEREIN IT IS STATED IN ARTICLE 8 THAT PROFIT DERIVED BY AN ENTERPRISE OF A CONTACTING STA TE FROM THE OPERATION OF SHIPS OR AN AIRCRAFT IN AN INTERNATION AL TRAFFIC SHALL BE TAXABLE ONLY IN THAT STATE. X. APL INDIA P. LTD.: SR.NO. NAME OF PARTY AMOUNT RS. CERTIFICATE REF. 16. APL INDIA P LTD 52,50,0387- ISSUED BY ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1, KARUVE LIPPEDY, MATTANCHERY, COCHIN - 5 DT. 12-08-2004. 1 BEST TEAM SHIPPING CO. LTD USE FULL TOOLS WORLDWI DE CONTAINER LINERS. 2 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 3 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES. 4 APL INDIA PVT. LTD IS ACTING AS AN AGENT OF M/S. APL CO. PVT. LTD. SINGAPORE COLLECTING ALL PAYMENTS OF FREIGHTS / TER MINAL CHARGES ON BEHALF OF PRINCIPAL. THE COMPANY HAS COLLECTED PAYM ENTS AGAINST FREIGHT CERTIFICATES ISSUED BY THEM AND (NOT AGENT INVOICE) ON BEHALF OF THEIR PRINCIPALS. 5 INDIA HAS ENTERED INTO DTAA WITH USA (1991) 187 I TR ST. 102 WHEREIN IT IS STATED IN ARTICLE 8 THAT PROFIT DERIV ED BY AN ENTERPRISE OF A CONTACTING STATE FROM THE OPERATION OF SHIPS O R AN AIRCRAFT IN AN INTERNATIONAL TRAFFIC SHALL BE TAXABLE ONLY IN T HAT STATE. 13 ITA NO.2278/A/09 WIT H CO 195/A/09 XI. HIND FREIGHT SERVICES PVT. LTD. SR. NO NAME OF THE AGENT NAME OF NON- RESI. SHIPPING GO'S. HEAD QUARTER IN TOTAL AMOUNT CLAIMED 18. HIND FREIGHT SERVICES PVT LTD. (MSC INDIA P. LTD)** 116, JOLLY. MAKER CHAMBERS, 11TH FLOOR 225 NARIMAN POINT, MUMBAI MEDITERRANEAN SHIPPING COMPANY GENEVA 2,59,571/- 1 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES 2 XEROX COPY OF FREIGHT CERTIFICATE ISSUED BY AGENT . 3 CONFIRMATION FOR NON RESIDENT SHIPPING COMPANIES RESIDENTIAL STATUS & THE HEAD QUARTERS. 4 INDIA HAS ENTERED INTO DTAA WITH GENEVA ITALY (19 96) 220 ITR ST. 3 WHEREIN IT IS STATED IN ARTICLE 8 THAT INCOME OF AN ENTERPRISE OF A CONTRACTING STATE FROM THE OPERATION OF SHIPS IN IN TERNATIONAL TRAFFIC SHALL BE TAXABLE ONLY IN THAT STATE. XII. MAXICON SHIPPING AGENCY: SR. NO . NAME OF THE AGENT NAME OF NON- RESI. SHIPPING COS. HEAD QUARTER IN TOTAL AMOUNT CLAIMED MAXICON SHIPPING FULLY OWNED SUBSIDIARY SINGAPOR E 2,92,194/ - 19 AGENCY P. LTD.** 404, 405, SABRI SAMRIDDHI BLDG., B/H MAITRI PARK S T STAND, MUMBAI CO. OF SEAWAYS SHIPPING CO., H.Q. IN SINGAPORE AS MAXICON CONTAINER LINE LTD. & REGIONAL HUB IN 14 ITA NO.2278/A/09 WIT H CO 195/A/09 MUMBAI 1 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 2 CERTIFICATES OF AGENT AS AGENTS OF NON-RESIDENT S HIPPING COMPANIES, 3 MAXICAN SHIPPING AGENCIES PVT. LTD. IS WORKING AS AN AGENT FOR SINGAPORE PRINCIPAL M/S. MAXICAN CONTAINERS LINES P VT. LTD., HAVING 22 BRANCHES IN INDIA. 4 INDIA HAS ENTERED INTO DTAA WITH SINGAPORE (1994) 209 ITR ST. 1 WHEREIN IT IS STATED IN ARTICLE 8 THAT PROFIT DERIV ED BY AN ENTERPRISE OF A CONTACTING STATE FROM THE OPERATION OF SHIPS O R AN AIRCRAFT IN AN INTERNATIONAL TRAFFIC SHALL BE TAXABLE ONLY IN T HAT STATE. XIII.SEAHAWK LINES PVT. LTD . SR. NO. NAME OF THE AGENT NAME OF NON-RESI. SHIPPING CO. HEAD QUARTER IN TOTAL AMOUNT CLAIMED 20 SEAHAWK LINES PVT. LTD. 105, GULAB BUILDING, 237 PD MELLO RD, FORT, MUMBAI H Q IN MALAYSIA MALAYSIA 51,491/- 1 INDIVIDUAL COMPANY WISE INVESTOR RELATION. 2 XEROX COPY OF BILL OF LADING 3 XEROX COPY OF FREIGHT CERTIFICATE ISSUED BY AGENT . 4 INDIA HAS ENTERED INTO DTAA WITH MALAYSIA (1997) 107 ITR ST. 136 WHEREIN IT IS STATED IN ARTICLE 8 THAT INCOME OF AN ENTERPRISE OG ONE OF THE CONTRACTING STATE DERIVED FROM THE OTHER CON TRACTING STATE FROM THE OPERATION OF SHIPS IN INTERNATIONAL TRAFFI C MAY BE TAXED IN THAT OTHER CONTRACTING STATE, BUT THE TAX CHARGEABL E IN THAT CONTRACTING STATE ON SUCH INCOME SHALL BE REDUCED B Y AN AMOUNT EQUAL TO FIFTY PER CENT OF SUCH TAX. 4. IN THE LIGHT OF AFORESAID SUBMISSIONS, THE LEA RNED CIT(A) ADJUDICATED THE ISSUE IN THE FOLLOWING TERMS:- 3.3. I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTH ORIZED REPRESENTATIVE AND THE FACTS OF THE CASE. SECTION 4 0(A)(IA) REFERS TO THE EXPENDITURE ON ANY INTEREST, COMMISSION ETC. PAYABL E TO A RESIDENT ON 15 ITA NO.2278/A/09 WIT H CO 195/A/09 WHICH TAX IS DEDUCTIBLE AT SOURCE. THIS SECTION CLE ARLY STIPULATES THAT THE EXPENDITURE WOULD BE DISALLOWED ONLY IN A CASE WHER E TAX WAS DEDUCTIBLE AT SOURCE AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFT ER DEDUCTION HAS NOT BEEN PAID. FROM THE LENGTHY DISCUSSION ABOVE IT IS CLEARLY BROUGHT OUT THAT PAYMENTS WERE MADE TO NON RESIDENT SHIPPING CO MPANIES OR THEIR AGENTS. PAYMENTS MADE TO FOREIGN SHIPPING LINES ARE TAXED UNDER THE SPECIAL PROVISIONS OF SECTION 172 OF THE INCOME-TAX ACT. SECTION 172 OVERRIDES OTHER PROVISIONS OF THE INCOME-TAX ACT. T HE CBDT HAD OCCASION TO CONSIDER THE ISSUE IN CIRCULAR NO. 723 DATED SEPTEMBER 19, 1995. 'REPRESENTATIONS HAVE BEEN RECEIVED REGARDING THE S COPE OF SECTION 172, 194C AND 195 OF THE INCOME-TAX ACT, 19 61 IN CONNECTION WITH TAX DEDUCTION AT SOURCE FROM PAYMEN TS MADE TO THE FOREIGN SHIPPING COMPANIES OR THEIR AGENTS. 2. SECTION 172 DEALS WITH SHIPPING BUSINESS OF NON- RESIDENTS. SECTION 172(1) PROVIDES THE MODE OF THE LEVY AND RE COVER/ OF TAX IN THE CASE OF ANY SHIP, BELONGING TO OR CHARTERED BY A NON- RESIDENT, WHICH CARRIES PASSENGERS, LIVE-STOCK, MAI L OR GOODS SHIPPED AT A PORT IN INDIA. AN ANALYSIS OF THE PROV ISIONS OF SECTION 172 WOULD SHOW THAT THESE PROVISIONS HAVE TO BE APP LIED TO EVERY JOURNEY A SHIP, BELONGING TO OR CHARTERED BY A NON- RESIDENT, UNDERTAKES FROM ANY PORT IN INDIA. SECTION 172 IS A SELF-CONTAINED CODE FOR THE LEVY AND RECOVERY OF THE TAX, SHIP-WIS E AND JOURNEY- WISE AND REQUIRES THE FILING OF THE RETURN WITHIN A MAXIMUM TIME OF THIRTY DAYS FROM THE DATE OF DEPARTURE OF THE SHIP. 3. THE PROVISIONS OF SECTION 172 ARE TO APPLY, NOTW ITHSTANDING ANYTHING CONTAINED IN OTHER PROVISIONS OF THE ACT. THEREFORE, IN SUCH CASES, THE PROVISIONS OF SECTION 194C AND 195 RELATING TO TAX DEDUCTION AT SOURCE ARE NOT APPLICABLE. THE RECOVER Y OF TAX IS TO BE REGULATED FOR A VOYAGE UNDERTAKEN FROM ANY PORT IN INDIA BY A SHIP UNDER THE PROVISIONS OF SECTION 172. 4. SECTION 194C DEALS WITH WORK CONTRACTS INCLUDING CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN RAILWAYS. THIS SECTION APPLIES TO PAYMENTS MADE BY A PERSON REFERRED TO < CLAUSES (A) TO (J) OF SUB-SECTION (1 ) TO ANY 'RESIDENT' (TERMED AS CONTRACTOR). IT IS CLEAR FORM THE SECTIO N THAT THE AREA OF OPERATION OF TDS IS CONFIRMED TO PAYMENTS MADE TO A NY RESIDENT'. ON THE OTHER HAND, SECTION 172 OPERATES IN THE AREA OF COMPUTATION OF PROFITS FROM SHIPPING BUSINESS OF NO N-RESIDENTS. 16 ITA NO.2278/A/09 WIT H CO 195/A/09 THUS, THERE IS NO OVERLAPPING IN THE AREAS OF OPERA TION OF THESE SECTIONS. 5. THERE WOULD, HOWEVER, BE CASES WHERE PAYMENTS AR E MADE TO SHIPPING AGENTS OF NON-RESIDENT SHIP-OWNERS OR C HARTERS FOR CARRIAGE OF PASSENGERS ETC. SHIPPED AT A PORT IN IN DIA. SINCE, THE AGENT ACTS ON BEHALF OF THE NON-RESIDENT SHIP-OWNER OR CHARTERER, HE STEPS INTO THE SHOES OF THE PRINCIPAL. ACCORDING LY, PROVISIONS OF SECTION 172 SHALL APPLY AND THOSE OF SECTIONS 194C AND 195 WILL NOT APPLY'. THE ABOVE CIRCULAR OF THE BOARD IS SQUARELY APPLICA BLE TO THE FACTS OF THE INSTANT CASE AND THE ISSUE FOR DETERMINATION. IN TH IS CASE WHEREVER PAYMENTS WERE NOT MADE TO NON RESIDENT SHIPPING COMPANIES OR THEIR AGENTS THE APPELLANT, DURING THE COURSE OF APPELLAN T PROCEEDINGS DID NOT PRESS THE CLAIM. HENCE, PAYMENTS MADE FOR MICT CHAR GES COURIER CHARGES, EXAMINATION CHARGES, BROKERAGE CHARGES, TR ANSPORTATION CHARGES AND AGENCY CHARGES AMOUNTING TO RS.17,55,63 0/- WAS WITHDRAWN. FURTHER PAYMENTS MADE TO LOCAL PARTIES O F RS.11,33,215/- WAS ALSO WITHDRAWN. WITH REGARD TO THE BALANCE DISA LLOWANCE THE ASSESSEE HAS BROUGHT OUT AT LENGTH THE FACTS THAT T HE PAYMENTS ARE TO NON RESIDENT SHIPPING COMPANIES OR THEIR AGENTS COV ERED SQUARELY UNDER THE PROVISIONS OF SECTION 172 AND THE DOUBLE TAXATI ON AVOIDANCE AGREEMENTS. THE PAYMENTS TO THESE PARTIES HAVE BEEN MADE UNDER THE HEAD AIR/SEA FREIGHT CHARGES, GOVERNMENT CHARGES, D OCUMENTATION, CFC/CWC CHARGES, CUSTOM DUTY, D.O. CHARGES, THC CHA RGES, B.L. CHARGES. BY THE FINANCE ACT, 1997, ALONG WITH FREIG HT CHARGES, OTHER RECEIPTS OF FOREIGN SHIPPING COMPANIES SUCH AS DEMU RRAGE CHARGES, HANDLING CHARGES OR ANY OTHER AMOUNT OF A SIMILAR N ATURE WAS BROUGHT WITHIN THE AMBIT OF SECTION 44B AND 172. THE DELHI HIGH COURT IN THE CASE OF INCOME-TAX OFFICER VS. FREIGHT SYSTEMS (IND IA)PVT. LTD. (2006) 103 TTJ (DELHI) 103 FOLLOWING ITS DECISION IN THE C ASE OF CONTINENTAL CARRIERS PVT. LTD. HELD THAT THERE IS NO DISTINCTIO N BETWEEN DRY PORT AND SEA PORT. AS PER PROVISIONS OF SECTION 172(8) THE I NLAND HAULAGE CHARGES ARE COVERED UNDER THE PROVISIONS OF THE LAW. DOCUME NTATION CHARGES, B.L. CHARGES, D.O. CHARGES ARE PAYABLE TO FOREIGN S HIPPING COMPANIES OR THEIR AGENTS. GOVERNMENT CHARGES, CFC/CWC CHARGES A RE PAYABLE TO CENTRAL WAREHOUSING CORPORATION (A CENTRAL GOVERNME NT UNDERTAKING), CUSTOM DUTY AND SERVICE TAX ARE PAYABLE TO CBEC AND ARE NOT LIABLE TO DEDUCTION OF TAX. IN VIEW OF THE ABOVE DISCUSSION THE DISALLOWANCE OF PAYMENTS MADE TO THE FOLLOWING SHIPPING COMPANIES IS ALLOWED AS THEY AND THEIR AGENTS ARE COVERED UNDER THE PROVISIONS OF SECTION 172 AND THE DTAA. EVERGREEN INDIA PVT. LTD. 68652 17 ITA NO.2278/A/09 WIT H CO 195/A/09 MARITIME 28130 ALLIGATOR 71905 APL 5250038 UT WORLD WIDE 2291936 + 3087 [SERVICE TAX] MERIDIAN 131880 IIC CONTAINER LINES 83370 TRANSWORLD SHIPPING SERVICES 302584 PERMA CONTAINER LINE 101990 HIND FREIGHT SERVICES 251571 MAXICON SHIPPING AGENCY 292194 -------------- 8877337 THE BALANCE CLAIM OF THE APPELLANT AS BELOW IS CONF IRMED SINCE THE PAYMENTS HAVE BEEN MADE EITHER TO LOCAL PARTIES OR FOR TRANSPORTATION EXPENSES AND OTHER EXPENSES TO WHICH U/S. 40(A)(IA) APPLIES. THE APPELLANT HAS ALSO WITHDRAWN THESE CLAIMS. PAYMENTS MADE TO LOCAL PARTIES: KASHYAP SHIPING AGENCY 106070 GLOBAL MARINE AGENCIES 1459067 SEVEN SEAS SHIPPING SERVICES 150096 WELGROW INDIA PVT. LTD. 109740 RICHIES CONTAINER PVT. LTD. 472686 PAYMENTS MADE FOR TRANSPORT CHARGES AND OTHER MISCELLANEOUS EXPENSES KANDLA HIGHWAY TPT CO. 25000 UT WORLD WIDE IND. 5400 CARGO CARTING 2654 EXAM CHARGES 160095 TPT 30900 AGENCY CHARGES R.C. GUPTA BROS 72250 HIND FREIGHT SERVICES 8000 GLOBAL MAR. 106000 SEVEN SEAS 191200 ---------------- 2899158 WITH REGARD TO PAYMENTS OF RS.3,91,061/- MADE TO SA TURN SHIP AGENCY PVT. LTD. THERE DOES NOT EXIST A DOUBLE TAXATION AV OIDANCE AGREEMENT WITH INDONESIA. PAYMENTS MADE TO SEA HARK PVT. LTD. OF RS.51,491/- ARE 18 ITA NO.2278/A/09 WIT H CO 195/A/09 COVERED BY DTAA WITH MALAYSIA WHEREIN IT IS STATED THAT 50% OF THE PAYMENT WOULD BE TAXABLE IN INDIA. SINCE NO EVIDENC E IS ON RECORD THAT THE RETURNS FOR THESE TWO CONCERNS HAVE BEEN FILED U/S 172 OF THE INCOME-TAX ACT THE ADDITION MADE BY THE AO IS CONFI RMED. 5. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARN ED DR SUPPORTED THE FINDINGS OF THE AO WHILE THE LEARNED AR ON BEHA LF OF THE ASSESSEE RELIED UPON THE IMPUGNED ORDER AND REITER ATED THEIR SUBMISSIONS BEFORE THE LD. CIT(A) . 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE WRITTEN SUBMISSIONS FILED BEFO RE US ON BEHALF OF THE ASSESSEE. IN THE INSTANT CASE, THE AO INVOKE D THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION O F TDS AS REQUIRED U/S 194C OF THE IT ACT. THE SAID PROVISION OF SEC. 40A(IA) IS APPLICABLE FOR THE AMOUNTS PAYABLE TO THE RESIDENTS OR THE AMOUNTS PAYABLE TO CONTRACTORS OR SUB-CONTRACTORS, BEING RE SIDENT. SIMILARLY, THE PROVISIONS OF SECTION 194C OF THE AC T ARE APPLICABLE TO PAYMENTS MADE TO ANY RESIDENT. IN THE INSTANT CA SE, THE LD. CIT(A) FOUND THAT PAYMENTS OF RS.88,77,337/- WERE MADE TO NON- RESIDENT SHIPPING COMPANIES OR THEIR AGENTS, COVERE D SQUARELY UNDER THE PROVISIONS OF SECTION 172 OF THE ACT AND THE DOUBLE TAXATION AVOIDANCE AGREEMENTS. THE LD. CIT(A) CONCL UDED THAT THE CIRCULAR NO. 723 DATED SEPTEMBER 19, 1995 ISSU ED BY THE CBDT IS SQUARELY APPLICABLE IN THE INSTANT CASE. A SPECIAL PROCEDURE IS PROVIDED U/S 172 OF THE ACT FOR PAYMEN T OF TAXES IN CASE OF ANY SHIP BELONGING TO OR CHARTERED BY A NON -RESIDENT WHICH CARRIES PASSENGER, LIVESTOCK, MATERIAL OR GOODS SHI PPED AT A PORT IN INDIA. THE CBDT CIRCULAR NO.723 (SUPRA) CLARIFIES T HAT IN SUCH CASES THE PROVISIONS OF SECTION 172 OF THE ACT WOUL D APPLY AND NO DEDUCTION OF TAX IS REQUIRED AS PER SECTION 194C OF THE ACT. IT IS ALSO CLARIFIED THAT THAT SINCE THE AGENT ACTS ON BE HALF OF THE NON- RESIDENT SHIPOWNERS OR CHARTERER, HE STEPS INTO THE SHOES OF THE 19 ITA NO.2278/A/09 WIT H CO 195/A/09 PRINCIPAL AND ACCORDINGLY, PROVISIONS OF SECTION 19 4C OF THE ACT WOULD NOT APPLY IN THE CASE OF THE ASSESSEE. THE LD . CIT(A) CONCLUDED THAT THE PAYMENTS MADE UNDER THE HEAD AIR/SEA FREIG HT CHARGES, GOVERNMENT CHARGES, DOCUMENTATION, CFC/CWC CHARGES, CUSTOM DUT Y, D.O. CHARGES, THC CHARGES, B.L. CHARGES WERE MADE TO NON-RESIDENT SHI PPING COMPANIES OR THEIR AGENTS COVERED SQUARELY UNDER THE PROVISIONS OF SECTION 172 OF THE ACT AND THE DOUBLE TAXATION AVOIDANCE AGREEM ENTS. THE REVENUE DID NOT PLACE ANY MATERIAL BEFORE US IN ORD ER TO CONTROVERT THESE FINDINGS OF FACTS RECORDED BY THE LD. CIT(A) ,SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER. IN THESE CIRCUMSTANCES, WE ARE NOT INCLINED TO INTERFERE WITH THE AFORESAID UNDISPUTED FINDINGS OF THE LD. CIT(A). THEREFORE, GROUND NOS.1 & 2 IN THE APPEAL OF THE REVENUE ARE DISMISSED. 7. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.3 IN THE APPEAL OF THE REVENUE AS ALSO GROUND NO.3 IN THE CO WHILE GROUND NOS. 1 & 2 RAI SED IN THE CO BEING SUPPORTIVE ONLY, ALL THESE GROUNDS ARE DIS MISSED. 8.. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND CONSEQUENTLY CO FILED BY THE ASSESSEE BECOMES IN FRUCTUOUS ORDER PRONOUNCED IN THE COURT TODAY ON 30-06-2011 SD/- SD/- (D K TYAGI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 30 -06-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI SAINANI VIVEK GOPE 202, SHIV SHANTI COMPLEX , SAMPATRAO COLONY, BARODA 2. THE INCOME-TAX OFFICER, WARD-2(5), 1 ST FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA 3. CIT CONCERNED 20 ITA NO.2278/A/09 WIT H CO 195/A/09 4. CIT(A)-II, BARODA 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD