The ITO, International Taxation, GANDHIDHAM V. M/s. Jamnadas Ramji, JAMNAGAR

ITA 472/RJT/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2023 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-01-2013
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR IN
• Assessee Lawyers: KALPESH DOSHI N
• Keywords: Double taxation relief; Additional evidence; Reasonable cause; Condonation of delay
• Section: 90; 139

Judgement Text

O, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. A.. O, UE O . . O , O BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM IT A NO . 465 AND 472/ RJT/201 2 I I / ASSESSMENT YEAR 20 10 - 11 INCOME TAX OFFICER, ( INTERNATIONAL TAXATION ) , GANDHIDHAM ( S / APPELLANT) VS. M.T.SETO EAGLE, AGENT M/S JAMNA D A S RA MJI , JAMNAGAR FREIGHT BENEFICIARY M/S HANDY TANKERS K/S/DENMARK 101, MILESTONE, P.N.MARG, PANCHWATI SOCIETY, JAMNAGAR, 20S / RESPONDENT CROSS - OBJECTION NO. 03/RJT/2013 IN ITA NO. 465/ RJT/201 2 I I / ASSESSMENT YEAR 2010 - 11 M.T.SETO EAGLE, AGENT M/S JAMNADAS RAMJI, JAMNAGAR FREIGHT BENEFICIARY M/S HANDY TA NKERS K/S/DENMARK ( S / CROSS - OBJECTOR ) VS. INCOME TAX OFFICER, (INTERNATIONAL TAXATION), GANDHIDHAM 20S / RESPONDENT N / REVENUE BY SHRI AVINASH KUMAR IN / ASSESSEE BY SHRI KALPESH DOSHI N / DATE OF HEARING 23.1.2013 N / DATE OF PRONOUNCEMENT 8.2.2013 ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 2 / ORDER A.. O, UE O / T. K. SHARMA, J. M. TH ESE TWO APPEAL S BY THE REVENUE AND CROSS - OBJECTION BY THE ASSESSEE ARE AGAINST THE ORDER DATED 23.5.20 12 OF CIT(A) - GANDHINAGAR FOR THE ASSESSMENT YEAR 20 10 - 11 . BOTH THE APPEALS AND CROSS - OBJECTION WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.465/RJT/2012 2. THE FACTS IN BRIEF ARE THAT THE ASS ESSEE IS A SOLE PROPRIETORSHIP FIRM. IT IS MAINLY ENGAGED IN THE BUSINESS AS AGENT OF THE FOREIGN SHIPPING COMPANY. FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE ACTED AS SHIPPING AGENT FOR THE VESSEL M.T.SETO EAGLE (TOOK RESPONSI BILITY FOR MAST ER OF THE SHIP) . FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE/AGENT M/S JAMNAGAD RAMJI, JAMNAGAR HAS FILED PROVISIONAL AND FINAL RETURN ON 18.6.2009 FOR BEING FREIGHT BENEFICIARY OF M/S HANDY TANKERS, WITHOUT PAYING FREIGHT TAX. THE RETURN WAS ACCOMMODATED WITH CERTAIN DETAILS LIKE, COPY OF BILL OF LADING. FIXTURE NOTE, MASTER BOND, TWO INDEMNITY BOND ETC OTHER THAT THIS SUPPORTING DOCUMENTS REQUIRED IN ORDER TO CLAIM DTAA BENEFIT, DECLARATION FORM AND RESIDENCY CERTIFICATE ISSUED IN FAVOUR OF M/S A P MOLLER MERSK A/S DEMNARK BY THE SKAT OFFICE. 3 . ON RECEIPT OF THE AFORESAID RETURN, THE AO ISSUED NOTICE U/S 172(5) OF THE INCOME TAX ACT 1961 ON 6.4.2 0 09 ASKING THE ASSESSEE TO FURNISH DETAILS MENTIONED THEREIN. SINCE THE BASIC DETAILS RE QUIRED IN ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 3 ORDER TO AVAIL DTAA BENEFIT, THE AGENT/ASSESSEE DID NOT SUBMIT THE BASIC DOCUMENTS SUCH AS TAX RESIDENCY, INCORPORATION CERTIFICATE IN FAVOUR OF THE FREIGHT BENEFICIARY OF M/S A P MOLLER MERSK A/S DEMNARK, THE AO HELD THAT PRINCIPAL THROU GH HIS AGENT/ASSESSEE HAD WRONGLY CLAIMED DTAA BENEFIT. THEREAFTER, THE AO PASSED THE ORDER U/S 172(4) OF THE ACT ON 16.12.2010 WHEREIN IN PARAGRAPH 6, THE AO ASKED THE ASSESSEE TO PAY TAX OF RS.22,46,291/ - BEING 7.5% ON INCOME EARNED AT RS.2,99,50,55 6/ - . THE RELEVANT PARAGRAPH 6 IS REPRODUCED BELOW: 6. UNDER THE CIRCUMSTANCES AND NARRATION AND ALSO EVIDENCE OF THE CASE, SIMILARLY THE AGENT/ASSESSEE HAD AGREED TO PAY THE FREIGHT TAX DEMAND WITHIN 24 HR UPON RECEIPTS OF THE ORDER. ACCORDINGLY, CLAIM OF DTAA BENEFIT IN PROVISIONAL AND FINAL R ET URN U/S 172(3) IS HEREBY WITHDRAWN. IN THE FINAL RETURN AGENT/ASSESSEE HAD SHOWN FREIGHT RECEIVED IN US$ 60129.05, WHEREAS THE DEBIT NOTE IN THE FREIGHT INVOICE ISSUED BY THE CHARTER M/S CSSSA CHARTING AND SH IPPING SERVICES SWITZERLAND DATED 11.6.2009, THE TOTAL FREIGHT RECEIPTS IN US$601296.05, HENCE THE SAME IS CONSIDERED AS THE FREIGHT OF THE PRINCIPLE. THE WORKING OF THE ASSESSMENT IS COMPLETED AS UNDER : TOTAL CARGO LOADED BY VESSEL : : 36681.863 00 GASOLINE RATE OF CONVERSION OF US$ : 49.41 F REIGHT RECEIVED IN US$ : US$601296.05 TOTAL AMOUNT OF FREIGHT : RS.2,99,50,556/ - . EARNED IN INDIAN RUPEES TAXABLE INCOME I.E. 7.5% : RS. 22,46,291 TAX PAYABLE ON TAXABLE INCOME : RS. 9,48,609 INCOME TAX PAID TAX PAID ON FINAL RETURN DATED : NIL BALANCE TAX PAYABLE : RS 9,48,609/ - ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 4 4 . ON APPEAL, BEFORE THE LD.CIT(A) , THE ASSESSEE SUBMITTED THE ADDITIONAL EVIDENCE WHICH WERE CALLED BY THE AO BUT WERE NOT FILED UNDER PROCEEDINGS U/S 172(5) OF THE ACT. THE LD. CIT(A) FORWARDED THE SAME FOR COMMENTS OF THE AO . THE AO IN HIS REMAND REPORT OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE. IN THE REMA ND REPORT THE AO POINTED OUT THAT FRESH EVIDENCE CANNOT BE ADMITTED UNLESS THE ASSESSEE HAS EXPLAIN WHAT WAS PREVENTED IT FROM PRODUCING THE SAME BEFORE THE AO ? THE NEW EVIDENCES CAN ONLY BE ALLOWED IF THE ASSESSEE PROVES THAT SAME COULD NOT BE SUMMI TED DUE TO REASONS BEYOND IS CONTROL OR THESE EVIDENCES WERE NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSEE/ AGENT HAS NOT GIVEN ANY SUCH INDICATION OR PROOF IN ITS SUBMISSION AS TO WHAT CIRCUMSTANCES PREVENTED IT FR OM PRODUCING THE EVIDENCE BEFORE THE AO. THE AO TO SUM UP IN THE REMAND REPORT, HE SUBMITTED THAT NEW EVIDENCE PRODUCED BY THE ASSESSEE ARE NOT ACCEPTABLE AND LIABLE TO BE REJECTED. APART FROM THIS, THE AO ALSO POINTED OUT THAT NEW EVIDENCES ADDUCED AR E WITHOUT ANY BASIS AND MERITS AND OUGHT TO BE REJECTED. 5 . AFTER CONSIDERING THE REMAND REPORT, IN THE IMPUGNED ORDER, THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE AND ON MERITS HELD THAT CHARTER HIRE PAYMENT BY CSSSA TO APM OUTSIDE INDIA IS NOT T AXABLE IN INDIA IN TERMS OF THE PROVI SI ONS OF ARTICLE 9 OF THE INCOME TAX TREATY BETWEEN INDIA AND DENMARK. THE CONCLUSION OF THE LD. CIT(A) IN THIS ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 5 REGARD CONTAINED IN PARAGRAPH 6.3 AT PAGE 13 OF HIS ORDER WHICH IS REPRODUCED BELOW: 6.3. HAVING CON CLUDED THAT APM M WAS THE ACTUAL DESPONDENT OWNER OF THE VESSEL MT SETO EAG L E THE COROLLARY IS TO DETERMINE ITS TAXABILITY. THE AR HAS SUBMITTED THE TAX RESIDENCY CERTIFICATE OF APM, WHICH WAS ALSO FORWARDED TO THE AO. THE AR ALSO SUBMITTED THAT APM M IS A REGULAR ASSESSEE WITH ADIT 1(1) ( INTERNATIONAL TAXATION), MUMBAI. IT IS SUBMITTED THAT THE INCOME OF APMM FROM OPERATIONS OF SHIPS IN INTERNATIONAL TRAFFIC IS BEING CONSISTENTLY ACCEPTED TO BE TAXABLE ONLY IN DENMARK AS PER ARTICLE 9 OF THE DOUBLE TA XATION AVOIDANCE AGREEMENT BETWEEN INDIA AND DENMARK (DTAA). A COPY OF THE ASSESSMENT ORDER PASSED BY THE ADIT 1(1), MUMBAI FOR AY 2008 - 09 HAS BEEN PLACED BEFORE ME. THE DIT RELIEF CERTIFICATES ISSUED BY THE ADIT, 1(1), MUMBAI FOR AY 2010 - 11 ENTITLIN G THE APPELLANT TO THE BENEFICIAL PROVI SIO NS OF ARTICLE 9 OF THE INDIA - DENMARK TAX TREATY ARE ALSO PLACED ON RECORDS AT PAGES 86 TO 91 OF THE PAPER BOOK. FURTHER, THE RETURN FO R AY 2010 - 11 WAS FILED VIDE ACKNOWLEDGEMENT NO.164656081300910 I.E ON 30.9.201 0. THE DATE IS MUCH BEFORE THE PASSING OF ORDER U/S 172(4).. I HAVE GONE THROUGH THESE DOCUMENTS AND OBSERVED THAT THE APPLICABILITY OF ARTICLE 9 OF THE DTAA IS NOT DOUBTED. THE VESSEL MT SETO EAGLE SAILED FROM SIKKA IN GUJARAT, INDIA TO DURBAN IN SOU TH AFRICA . HENCE, IT WAS OPERATED IN INTE RNATIONAL WATERS. ACCORDINGLY, THE CHARGER HIRE PAYMENT BY CSSSA TO APM OUTSIDE INDIA IS NOT TAXABLE IN INDIA AND DENMARK AGGRIEVE WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS : 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ADMITTING OF ADDITIONAL EVIDENCES AS THE SAME HAD NOT BEEN FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS., 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING DTAA RELIEF TO THE ASSESSEE HOLDING AP MOLER M MAERSK A/S AS ACTUAL DESPONDENT OWNER OF THE VESSEL ONLY ON THE BASIS OF UNVERIFIED CORRECTED FIXTURE NOTE WHICH WAS FURNISHED AS ADDITIONAL EVIDENCE, 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT ADJUDICATING HE GROUND CONTESTED THAT PROVISIONS OF SECTION 172 OF T HE INCOME TAX ACT ARE APPLICABLE IN CASES WHERE THE ASSESSE ARE ENGAGED IN OPERATION OF SHIPS OCCASIONALLY . ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 6 4. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE CANCELLED AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. THE ASSESSEE ALSO FILED CROSS - OBJECTION. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS CROSS - OBJECTION IS AS UNDER : THE LD. CIT(A) HAS WRONGLY REJECTED THE GROUND OF THE APPELLANT THAT T HE PROV ISION OF SECTION 172 OF THE IT ACT DO NOT APPLY TO THE APPELLANT AS APPELLANT IS ENGAGED IN REGULAR SHIPPING ACTIVITIES AND ALSO FILING RETURN UNDER THE NORMAL PROVI SI ONS OF THE IT ACT 6 . ALONG WITH THE CROSS - OBJECTION, THE ASSESSEE HAS ALSO FILE D AN APPLICATION FOR CONDONATION OF DELAY WHEREIN IT IS POINTED OUT THAT THERE IS A DELAY OF 95 DAYS IN FILING THE CROSS - OBJECTION WHICH HAS OCCURRED DUE TO THE FACT THAT THE AGENT OF THE PRINCIPAL HAS NOT INTIMATED IN TIME TO THE PRINCIPAL AT DENMARK ABOUT THE APPEAL FILED BY T HE REVENUE. HE ACCORDINGLY POINTED OUT THAT THE DELAY IN FILING OF THE CROSS - OBJECTION MAY BE CONDONED. AS AGAINST THIS THE LD. DR OF THE REVENUE POINTED OUT THAT THERE IS NO REASONABLE CAUSE FOR DELAY OF 95 DAYS. ON MERITS, HE POINTED OUT THAT THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE WHICH WERE NOT FILED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHER, THE LD. CIT(A) ALSO ERRED IN ALLOWING DTAA RELIEF TO THE ASSESSEE BY HOLDING AP MOLLE R MAERSK A/S AS ACTUAL DISPONENT OWNER OF THE VESSEL ONLY ON THE BASIS OF UNVERIFIED CORRECTED FIXTURE NOTE WHICH WAS FURNISHED AS ADDITIONAL EVIDENCE, THE LD. CIT(A) HAS FURTHER ERRED IN NOT ADJUDICATING HE GROUND CONTESTED THAT PROVISIONS OF SECTION 172 OF THE INCOME TAX ACT ARE APPLICABLE IN CASES WHERE THE ASSESSE ARE ENGAGED IN OPERATION OF SHIPS ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 7 OCCASIONALLY. IN THIS CASE, THE ASSESSEE IS ENGAGED IN OPERATION OF SHIPPING OCCASIONALLY, THEREFORE, IT WAS REQUIRED TO BE PAID TAX DEMANDED WITH IN 24 HOURS UPON RECEIPT OF THE ORDER OF THE AO. 7 . IN REJOINDER, THE COUNSEL OF THE ASSESSEE DREW OUR ATTENTION TO THE OBSERVATIONS OF LD. CIT(A) AT PAGE 13 OF THE IMPUGNED ORDER WHEREIN IT IS MENTIONED THAT FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASS ESSEE HAS FILED REGULAR RETURN OF INCOME ON 30.9.2010 VIDE ACKNOWLEDGEMENT NO.164656081300910 . THE RETURN OF INCOME WAS FILED MUCH BEFORE PASSING OF THE ORDER U/S 177(4) OF THE ACT. HE ACCORDINGLY POINTED OUT THE EVEN IF IT IS HELD THAT THE ASSESSEE IS NOT ENTITLED TO DTAA BENEFIT UNDER PROCEEDINGS U/S 172(5) OF THE ACT IN THAT EVENT FOLLOWING THE DECISION OF THE TRIBUNAL IN THE INCOME TAX OFFICER (INTERNATIONAL TAXATION) V/S M/S STAR SHIPPING SERVICES IN ITA NO. 26 /RJT/201 2(AY 2010 - 11) DATED 28.9.2012 IT MAY BE HELD THAT THE INCOME OF THE ASSESSEE MAY BE VERIFIED BY T HE AO . T HE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). HE CONTENDED THAT THE PRINCIPAL OF ASSESSEE AND THE FREIGHT BENEFICIARY ARE ENGAGED IN THE REGULAR SHIPPING BUSINESS AND NOT IN OCCASIONAL SHIPPING BUSINESS AND THEREFORE, THE PROVISIONS OF SECTION 172 (4) OF THE ACT ARE INAPPLICABLE TO THEM. IN THIS REGARD, HE DREW OUR ATTENTION TO THE FINDING RECORDED BY THE LD. CIT(A) AT PARAGR APH 6.3 AT PAGE 13 OF THE IMPUGNED ORDER (WHICH IS REPRODUCED BY US HEREINABOVE AT PAGE 3 OF THIS ORDER) AND SUBMITTED THAT THE DEPARTMENT HAS PLACED NO MATERIAL TO REBUT THE FINDINGS OF THE LD. CIT(A) AND MERELY RELIED ON THE FINDINGS OF THE ASSES SING OFFICER. ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 8 HOWEVER, THE FREIGHT BENEFICIARY WAS REGULARLY ENGAGED IN SHIPPING BUSINESS WAS APPARENT FROM THE FACT THAT THE PRINCIPAL IS REGULARLY ENGAGED IN THE BUSINESS OF SHIPPING, AS OBSERVED BY THE LD. CIT(A) THAT THE PRINCIPAL IS REGULARLY FILING ITS RETURN OF INCOME AT MUMBAI AND IN SUPPORT, THE ACKNOWLEDGMENT OF RETURNS FILED FOR THE ASSESSMENT YEARS 2007 - 08 TO 2010 - 11 IS PLACED ON RECORD WHICH IS ENLISTED AT PAGES 158 TO 161 OF THE SECOND PAPER BOOK OF THE ASSESSEE FINALLY THE COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE INCOME - TAX ACT DOES NOT STIPULATE MULTIPLE ASSESSMENT AGAINST THE SAME ASSESSEE, SIMULTANEOUSLY U/S 172(4) AND ALSO UNDER THE NORMAL PROVISIONS OF ACT. UNDER THESE CIRCUMSTANCES, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) RIGHTLY QUASHED THE ORDER PASSED BY THE AO U/S 172(4) OF THE ACT. THE LD. COUNSEL OF THE ASSESSEE ALSO PLACED A COPY OF THE DECISION OF THE RAJKOT BENCH OF THE TRIBUNAL IN THE CASE OF I.T.O V/S M/S CMA CGM AGENCIES (IND IA) PVT. LTD. IN ITA NOS. 151 TO 190/RAJ/2012(AY - 2010 - 2011) DATED 31.08.2012 WHEREIN ON IDENTICAL FACTS THE TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE WITH CERTAIN OBSERVATIONS. 8 . HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE O RDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE PLEA RAISED BY THE ASSESSEE IN T HE ADDITIONAL G ROUND WAS NOT ADJUDICATED UPON BY THE LD. CIT(A) IN THE IMPUGNED ORDER. PRIMA FACIE IT APPEARS THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUS E IN FILING THE CROSS - OBJECTION IN TIME. THEREFORE , THE DELAY OF 95 DAYS IN FILING THE CROSS - ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 9 OBJECTION IS CONDONED AND CROSS - OBJECTION FILED BY THE ASSESSEE IS ADMITTED FOR ADJUDICATION. 9 . IN THE IMPUGNED ORDER THE LD. CIT(A) HAS MENTIONED THAT FO R THE ASSESSMENT YEAR UNDER APPEAL, M/S A P MOLLER MAERSK A/S HAS FILED REGULAR RETURN OF INCOME FOR ASSESSMENT YEAR 2010 - 11 ON 29.3.2012 VIDE ACKNOWLEDGEMENT NO.368921161290312 WITH DY. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 1(1), MUMBAI DL C/P/301/01 W HEREIN THE CONCERN AO CAN EXAMINE WHETHER THE ASSESSEE IS ENTITLED TO THE BENEFIT OF DTAA OR NOT. WE ALSO FIND THAT THE SIMILAR MATTER HAD CAME UP BEFORE THIS TRIBUNAL IN THE CASE OF I.T.O V/S M/S CMA CGM AGENCIES (INDIA) PVT. LTD. (SUPRA ) IN WHICH WE HAVE RESTORED THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION THAT THE JURISDICTIONAL AO MAY VERIFY THE POSITION, AND TAKE SUCH ACTION AS MAY BE WARRANTED IN LAW IN TERMS OF SECTION 172(7) TO ENSURE THAT THE INCOME OF THE ASSESSEE FROM THE AFORESAID VOYAGES DOES NOT ESCAPE ASSESSMENT AS PER THE NORMAL PROVISIONS OF INCOME TAX ACT. THE RELEVANT PARAGRAPHS 19 AND 20 OF THE DECISION OF THE TRIBUNAL IN THE CASE OF I.T.O V/S M/S CMA CGM AGENCIES (INDIA) PVT. LTD. (SUPRA) ARE REPRODUCED BELO W: 19. AS STATED EARLIER, THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD IN ARABIAN EXPRESS LINE LTD. OF UNITED KINGDOM V. UNION OF INDIA, 120 CTR (GUJ) 377 THAT HE PROCEDURE CONTEMPLATED BY SECTION 172 FOR ASSESSING THE INCOME OF A NON - RESIDENT IN DIAN BECAUSE OF HIS OCCASIONAL ACTIVITY IN SHIPPING BUSINESS IN INDIA WOULD NOT BE APPLICABLE LE IN A CASE WHERE THERE IS A CONVENTION BETWEEN THE GOVERNMENT OF INDIA AND THE FOREIGN COUNTRIES AS PROVIDED UNDER SECTION 90 OF THE INCOME TAX - ACT. THE REASO N FOR SUCH A VIEW IS OBVIOUS. SECTION 172(2)/(4) PROVIDES FOR SUMMARY ASSESSMENT @ 7.5% OF THE FREIGHT PAID OR PAYABLE. BY THE VERY NATURE OF ASSESSMENT CONTEMPLATED BY SECTION 172, IT IS NOT POSSIBLE TO DEAL WITH THE CASES COVERED BY DOUBLE TAXATION AV OIDANCE AGREEMENT. IN ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 10 THE MATTES BEFORE US, THE AO HAS REJECTED THE CLAIM OF THE RESPONDENT - COMPANY THAT ITS FALLS UNDER DTAA. SUCH AN EXAMINATION, IN OUR VIEW, CAN NOT BE UNDERTAKEN IN THE PROCEEDINGS U/S 172 AS THE AO HAS NO DISCRETION U/S 172(2)/(4 ) EXCEPT TO COMPUTE THE INCOME @ 7.5% OF FREIGHT PAID OR PAYABLE. IT IS PERHAPS FOR THIS REASON THAT SECTION 172(7) GIVES AN OPTION TO THE OWNERS/CHARTERERS OF SHIPS TO SEEK ASSESSMENT OF THEIR INCOME IN ACCORDANCE WITH THE NORMAL PROVISIONS OF THE INCOME TAX AT. ONCE A RETURN IS FILED BY A NON - RESIDENT U/S 139 CLAIMING THE BENEFIT OF DTAA, HIS ASSESSMENT WOULD NEED TO BE COMPLETED UNDER NORMAL PROVISIONS OF THE INCOME TAX ACT. 20. APROPOS GROUND NO.(II), IT WAS VEHEMENTLY CONTENDED BY THE LD. CIT - DR TH AT THE JURISDICTIONAL AO SHOULD BE DIRECTED TO VERIFY THE POSITION AND TAX THE INCOME OF THE FREIGHT BENEFICIARY (REPRESENTED BY THE RESPONDENT - COMPANY) FROM THE BUSINESS OF HANDLING CARGO TRANSPORTATION (INCLUDING SLOT CHARTERING BUSINESS) AS PER NORMAL PROVISIONS OF THE ACT. IT IS THE CASE OF THE RESPONDENT - COMPANY THAT ITS INCOME INCLUDING THE INCOME FROM 40 VOYAGES COVERED BY THE IMPUGNED ORDER PASSED BY THE AO U/S 172(4) SHOULD BE TAXED IN ACCORDANCE WITH THE NORMAL PROVISIONS OF THE INCOME TAX ACT O N THE BASIS OF THE RETURN FILED BY IT U/S 139 AT MUMBAI. PERUSAL OF THE ORDER PASSED BY THE CIT(A) SHOWS THAT HE HAS TAKEN A VIEW THAT THE CASE OF THE RESPONDENT FALLS U/S 172(7) AND NOT U/S 172(4). THE RESPONDENT - COMPANY HAS ALSO ACCEPTED THE LIABILITY TO BE DEALT WITH U/S 172(7). THE JURISDICTIONAL AO MAY THEREFORE VERIFY THE POSITION AND TAKE SUCH ACTION AS MAY BE WARRANTED IN LAW IN TERMS OF SECTION 172(7) TO ENSURE THAT THE INCOME OF THE ASSESSEE FROM THE AFORESAID 40 VOYAGES DOES NOT ESCAPE ASSE SSMENT AS PER THE NORMAL PROVISIONS OF THE IT ACT. IN THE CASE BEFORE US, THE PRINCIPAL , M/S A P MOLLER MAERSK A/S BY FILING THE REGULAR RETURN OF INCOME ON 29.3.2012 WITH DY.DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 1(1), MUMBAI BY FILING THI S RETURN, THE PRINCIPAL M/S A P MOLLER MAERSK A/S HAS ACCEPTED THE LIABILITY TO BE DEALT WITH U/S 172(7) OF THE ACT. IT IS PERTINENT TO NOTE THAT BEFORE THE INCOME TAX OFFICER (INTERNATIONAL TAXATION), GANDHIDHAM WHO PASSED THE ORDER U/S 172(4), THE A SSESSEE NEVER TOOK THE PLEA THAT IT IS A REGULAR SHIPPING COMPANY, FILING REGULAR INCOME TAX RETURN AND THEREFORE IN ITS CASE THE PROVISIONS OF SECTION 172(4) ARE NOT APPLICABLE. ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 11 THOUGH THIS PLEA WAS TAKEN BEFORE THE LD. CIT(A), HE HAS NOT ADJUDICATED THE SAME, WE THEREFORE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE INCOME TAX OFFICER (INTERNATIONAL TAXATION), GANDHIDHAM WITH A DIRECTION THAT THE ASSESSEE SHALL FURNISH THE NECESSARY EVIDENCE IN RESPECT OF THE CLAI M THAT PRINCIPAL M/S A P MOLLER MAERSK A/S IS REGULARLY ASSESSED TO INCOME TAX AND ALSO FURNISHED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL. HE WILL EXAMINE THE SAME AND MODIFY HIS ORDER U/S 172(4) OF THE ACT IN ACCORDANCE WITH LAW. WHILE PASSING THE FRESH ORDER, INCOME TAX OFFICER (INTERNATIONAL TAXATION), GANDHIDHAM, MAY ALSO IF NECESSARY EXAMINE, WHETHER THE ASSESSEE IS ENTITLED TO DTAT BENEFIT ON THE BASIS OF FRESH/ADDITIONAL EVIDENCE FILED BEFORE THE LD. CIT(A). CONSEQUENTLY, FOR STATISTICAL PURPOSES, THE APPEAL OF THE REVENUE AND CROSS - OBJECTION FILED BY THE ASSESSEE IS TREATED AS ALLOWED. ITA NO.472/ RJT/2012 11. THIS APPEAL FILED BY REVENUE IS A DUPLICATE APPEAL AS AGAINST THE ORDER AS THAT OF ITA NO.465/RJT/2012 AND BY MISTAKE THE REGISTRY OF THE TRIBUNAL HAS GIVEN REGISTRATION NUMBER. THEREFORE, THIS APPEAL NEED NOT TO BE ADJUDICATED UPON HENCE, WE DISMISS T HIS APPEAL AS MISCONCEIVED 12. TO SUM UP, FOR STATISTICAL PURPOSE S , THE APPEAL OF THE REVENUE BEARING ITA NO.465/RJT/2012 AND C ROSS - OBJECTION FILED BY THE ASSESSEE ARE ALLOWED WHEREAS APPEAL IN ITA NO.472/RJT/2012 BEING DUPLICATE IS DISMISSED. ITA NO.465/ RJT/2012 ITA NO.472/ RJT/2012 CO NO. 03/RJT/2013 12 TH IS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD SD ( .. / D. K. SRIVASTAVA) ( .. I / T. K. SHARMA) ROSS / ACCOUNTANT MEMBER / JUDICIAL MEMBER I/ ORDER DATE 8.2. 2013 /RAJKOT SRL EJB B / COPY OF ORDER FORWARDED TO: - . S / APPELLANT - , . 20S / RESPONDENT - 3. O V / CONCERNED C IT . 4. V - / CIT (A) . 5. 2O, O, / DR, ITAT, RAJKOT 6. I / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, R AJKOT.