DCIT (IT) 4(2)(2), MUMBAI V. STAR CRUISE (INDIA) TRAVEL SERVICES P.LTD, MUMBAI

ITA 2425/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1336 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2014-2015
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MOHAN DR

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, J MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NOS.2425 & 2426/MUM/2017 ASSESSMENT YEARS: 2014-15 & 2015-16 DCIT(IT)-4(2)(2), ROOM NO.1708, 17 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-400021 / VS. M/S STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. C/O- KONODIA CHAUHAN & CO., CHARTERED ACCOUNTANTS 1032/33, HUBTOWN SOLARIS, N.S. PHADKE MARG, ANDHERI EAST, MUMBAI-400069 ( !'# $ /ASSESSEE) ( / REVENUE) PAN. NO . AAFCS4154H % & $ ' / DATE OF HEARING : 21/08/2018 & $ ' / DATE OF ORDER: 21/08/2018 ! / REVENUE BY SHRI A. MOHAN- DR !'# $ ! / ASSESSEE BY SHRI VIPUL JOSHI ITA NOS. 2425 & 2426/MUM/2017 M/S STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. 2 / O R D E R PER JOGINDER SINGH(JUDICIAL MEMBER) THESE TWO APPEALS ARE BY THE REVENUE AGAINST THE IMPUGNED ORDERS BOTH DATED 05/12/2016 OF THE LD. FI RST APPELLATE AUTHORITY, MUMBAI, IN HOLDING THAT THE TA X IS NOT DEDUCTIBLE AT SOURCE ON THE PAYMENTS TO STAR CRUISE MANAGEMENT LTD. (SCML) OUT OF SALE PROCEEDS OF CRUI SE TICKETS BOOKED BY THE ASSESSEE AND CONSEQUENTIAL LE VY OF TAX AND INTEREST UNDER SECTION 201 AND 201(A) OF THE IN COME TAX ACT, 1961 (HEREINAFTER THE ACT) MADE BY THE LD. ASS ESSING OFFICER. 2. DURING HEARING, AT THE OUTSET, SHRI VIPUL JOSHI , LD. COUNSEL FOR THE ASSESSEE, CLAIMED THAT THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISI ONS OF THE TRIBUNAL, ON IDENTICAL ISSUE. THE LD. COUNSEL HAS F ILED THE DECISIONS FOR VARIOUS ASSESSMENT YEARS IN ITS PAPER BOOK RUNNING INTO 70 PAGES. THE LD. DR, SHRI A. MOHAN, T HOUGH DEFENDED THE ADDITION MADE BY THE LD. ASSESSING OFF ICER BUT DID NOT CONTROVERT THE FACTUAL MATRIX THAT THE ISSU E HAS BEEN SETTLED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL F OR VARIOUS ITA NOS. 2425 & 2426/MUM/2017 M/S STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. 3 ASSESSMENT YEARS AND SUCH ORDERS ARE MADE AVAILABLE IN THE PAPER BOOK FILED BY THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE TRIBUNAL HAS DECIDED THIS ISSUE IN THE CASE OF ASSE SSEE ITSELF IN EARLIER ASSESSMENT YEARS AND THE ONE OF THE LATE R DECISION OF THE TRIBUNAL IS FOR ASSESSMENT YEAR 2010-11 AND 2011-12 (ITA NOS.2632 AND 2633/MUM/2016), ORDER DATED 02/05/2018, WHICH IS REPRODUCED HEREUNDER FOR READY REFERENCE AND ANALYSIS:- THESE ARE APPEALS BY THE REVENUE AGAINST THE RESPEC TIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), PE RTAINING TO THE ASSESSMENT YEARS 2010-11 AND 2011-12. SINCE THE ISSUES ARE COMMON AND CONNECTED AND THE APPEALS WERE HEARD TOG ETHER THESE HAVE BEEN DISPOSED OF BY THIS COMMON ORDER. 2. THE COMMON GROUNDS OF APPEAL READ AS UNDER: 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) IS CORRECT IN LAW IN HOLDING THAT TH E GROSS RECEIPT RECEIVED BY THE SGML AS PRINCIPAL FROM THE AGENTS I S NOT CHARGEABLE TO TAX U/S. 5(2)(A) OF THE INCOME TAX ACT, 1961?' 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) IS CORRECT IN HOLDING THAT NO INCOME ACC RUES OR ARISES TO THE ASSESSEE IN INDIA REGARDING THE BUSINESS OF SALE OF TICKETS THROUGH THE SELLING AGENTS?' 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) BE SET ASIDE ON THE ABOVE GROUND(S) AND THE DRAFT ORDER OF THE ASSESSIN G OFFICER RESTORED. 3. AT THE OUTSET, IN THIS CASE, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE BY A SERIES OF DECISIONS OF THE TRIBUNAL IN THE ASSESSEE S OWN CASE. ITA NOS. 2425 & 2426/MUM/2017 M/S STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. 4 4. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE THIS PROPOSITION. 5. THE BRIEF FACTS OF THE CASE ON THIS ISSUE ARE AS UNDER: M/S. STAR CRUISE MANAGEMENT LIMITED (SCML) OR THE ASSESS EE IS A FOREIGN COMPANY REGISTERED IN ISLES OF MAN. SCML HA S APPOINTED STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. (SCITSPL), AN INDIAN COMPANY AS CANVASSERS FOR ITS CRUISES OPERATED OUTSIDE INDIA. THE INDIAN COMPANY RENDERS VARIOUS SERVICES TO THE COMPANY. THE NATURE OF AGREEMENT IS DESCRIBED AS 'APPOINTMENT OF SCITSPL AS THE GENERAL SALES AGE NT ' IN INDIA MAINLY FOR COLLECTION OF MONIES IN INDIA BESI DES PROVIDING CERTAIN SALES AND MARKETING SERVICES IN CONNECTION WITH THE OPERATION OF THE VESSELS. THE DUTIES AND OBLIGATION S OF THE INDIAN PARTY AS PER THE AGREEMENT ARE: I. TO ACT AS CANVASSER IN INDIA FOR CRUISE PACKAGES , SHORES EXCURSIONS PROMOTED BY SCML IN RESPECT OF VESSELS O WNED, CHARTERED, AMANGED AND/OR OPERATED BY STAR CRUISES GROUP OF COMPANIES FROM TIME TO TIME. II. TO REMIT MONIES RECEIVED FROM PSA'S FOR CRUISE PACKAGES, SHORE EXCURSIONS PROMOTED BY SCML IN INDIA. III. TO KEEP SCML ADVISED ON ALL RELEVANT LAWS AND REGULATIONS AND OPERATING CRITERIA RELATING TO THE SALE OF TICK ETS WITH PARTICULAR REFERENCE TO CONSUMER AND CONTRACT LEGIS LATIONS. IV. TO TREAT AS CONFIDENTIAL ALL BOOKS, DOCUMENTS A ND INFORMATION RECEIVED FROM SCML AND TO RETURN THE SA ME UPON DEMAND; AND V. TO KEEP AND RENDER TO SCML FAIR AND ACCURATE ACC OUNTS OF ANY DEALINGS OF ALL MONIES RECEIVED BY SCITSPL IN R ELATION TO SALE, BOOKINGS & CONFIRMATION FOR AND ON BEHALF OF SCML AND TO PAY OVER TO SCML, ALL MONIES SO RECEIVED WITHOUT ANY DEDUCTION EXCEPT AS MAY BE AGREED UPON OR AUTHORISE D BETWEEN SCML AND SCITSPL. 6. THE ASSESSING OFFICER HAS DUBBED THE ABOVE ARRAN GEMENT AS BEING IN THE NATURE OF A BUSINESS CONNECTION BETWEE N THE TWO PARTIES AS CONTEMPLATED UNDER SECTION 9(1) (I) OF T HE INCOME TAX ACT AND HAS ESTIMATED TOTAL PROFIT OF THE NON-RESID ENT FROM THIS BUSINESS CONNECTION @ 5% OF THE TURNOVER OF THE NON -RESIDENT FROM INDIA. FOR ARRIVING AT HIS DECISION, THE AO HA S REPRODUCED THE DUTIES AND OBLIGATIONS OF THE INDIAN COUNTERPAR T I.E. SCITSPL AS PER THE AGREEMENT AND HAS RELIED ON THE SUPREME ITA NOS. 2425 & 2426/MUM/2017 M/S STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. 5 COURT DECISION IN THE CASE OF R D AGGARWAL & CO. (5 6 ITR 20) AND ANGLO-FRENCH TEXTILE CO LTD (23 ITR 101). 7. UPON THE ASSESSEES APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DECIDED THE ISSUE IN FAVOUR OF THE AS SESSEE BY PLACING RELIANCE UPON A SERIES OF ITAT DECISION IN THE ASSESSEES OWN CASE. 8. AGAINST THIS ORDER, THE ASSESSEE IS IN APPEAL BE FORE US. 9. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT THIS TRIBUNAL IN ASSESSEES OWN CASE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE REFERENCES TO THESE DECISIONS ARE AS UNDER: 1. ITA NO.4973/M/2005 ITA NO.6497/M/2006 2. ITA NO.5713/M/2007 3. ITA NO.2521/M/2008 4. ITA NO.6112/M/2008 5. ITA NO.3805/M/2010 6. ITA NO.7759/M/2010 7. ITA NO.7486/M/2011 8. ITA NO.1809, 1810 & 1811/M/2013 MA NO. 2 & 3/M/2016 10. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THE HANDS OF THE PAYER, I.E., STAR CRUISE (INDIA) TRAVEL SERVICE S PVT. LTD. IT HAS BEEN HELD THAT THE SAID COMPANY WAS NOT RESPONSIBLE FOR TAX AT SOURCE AS THE INCOME OF THE ASSESSEE M/S.SCML CANNO T BE HELD AS TAXABLE IN INDIA TO THE EXTENT OF AMOUNT OF SALE OF THE CRUISE TICKETS IN INDIA. IN THIS REGARD, THE LD. COUNSEL O F THE ASSESSEE REFERRED TO THE ORDER OF THE TRIBUNAL IN THE CASE O F M/S. STAR CRUISE (INDIA) TRAVEL SERVICES P. LTD. IN ITA NO. 3802/MUM/2010 FOR ASSESSMENT YEAR 2010-11 AND ITA NO.7487/MUM/2011 FOR ASSESSMENT YEAR 2011-12, IN WH ICH THE TRIBUNAL HAS SIMILARLY HELD THAT NO INCOME HAS ACCR UED OR ARISEN IN INDIA IN RESPECT OF BOOKING OR SALE OF TICKETS F OR TOUR PACKAGES OF THE CRUISE IN INDIA. ITA NOS. 2425 & 2426/MUM/2017 M/S STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. 6 11. THUS FROM THE ABOVE IT IS AMPLY EVIDENT THAT TH IS TRIBUNAL HAS CONSISTENTLY DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE. NO CASE HAS BEEN MADE OUT THAT THERE ARE ANY DISTINGUISHING FEATURES IN THE PRESENT YEAR OR THAT THE EARLIER DECISION OF TH E TRIBUNAL HAS BEEN REVERSED BY THE HON'BLE JURISDICTIONAL HIGH CO URT. HENCE, IN ACCORDANCE WITH THE AFORESAID DISCUSSION AND PRE CEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C OMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, WE UPHOLD THE SA ME. 12. IN THE RESULT, THESE APPEALS BY THE REVENUE STA NDS DISMISSED. 2.2. IN THE APPEAL BEFORE US ALSO, THE LD. ASSESSI NG OFFICER HAS DOUBTED THE ARRANGEMENTS OF THE ASSESSE E BEING IN THE NATURE OF BUSINESS CONNECTION BETWEEN THE TW O PARTIES AS CONTEMPLATED UNDER SECTION 9(1)(I) OF THE ACT AN D ESTIMATED THE PROFIT OF THE NON-RESIDENT FROM THE B USINESS CONNECTION. WE FIND THAT THIS ISSUE HAS BEEN DELIBE RATED UPON IN THE CASE OF THE ASSESSEE FOR VARIOUS ASSESS MENT YEARS RIGHT FORM ASSESSMENT YEAR 2001 TO ONWARDS AN D TILL ASSESSMENT YEAR 2013-14. IN THE LATER DECISION, THE TRIBUNAL FOR ASSESSMENT YEAR 2010-11 AND 2011-12, ORDER DATE D 02/05/2018 HAS DISCUSSED THE EARLIER ASSESSMENT YEA RS AND OBSERVED THAT THE REVENUE HAS MADE OUT ANY CASE OR DISTINGUISHING FEATURES IN THE PRESENT YEAR AND NEI THER THE EARLIER ORDER OF THE TRIBUNAL WERE REVERSED BY THE HON'BLE JURISDICTIONAL HIGH COURT, THUS, FOLLOWING THE EARL IER DECISIONS OF THE TRIBUNAL AND IN THE ABSENCE OF ANY CONTRARY FACTS, ITA NOS. 2425 & 2426/MUM/2017 M/S STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. 7 BROUGHT ON RECORD BY THE REVENUE, WE FIND NO INFIRM ITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL). RESULTANTLY, THE APPEALS OF THE REVENUE A RE DISMISSED. FINALLY, APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF HEARING ON 21/08/2018. SD/- SD/- ( MANOJ KUMAR AGGARWAL ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER % MUMBAI; ) DATED :21/08/2018 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT (RESPECTIVE ASSESSEE) 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( + ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI, 5. 34 .$! , 0 +' ! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. ! / BY ORDER, /! (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI