Pearl Logistic & Exim Corporation, Agent of Faber Ship Broker APS, Denmark of M.V. Queen Arrow-1, Bhavnagar V. The ITO, International Taxation, RAJKOT-GUJARAT

ITA 5/RJT/2020

AI Insights

The case involves M/s Pearl Logistics & Ex-Im Corporation, an NRI shipping agent, appealing against the order of the Learned Commissioner of Income Tax (Appeals)-13, Ahmedabad. The appeal concerns the assessment of freight income amounting to Rs. 3,52,640 under section 172(4) of the Income Tax Act, 1961, for the Assessment Year 2011-12. The primary contention was the applicability of Article 8 of the India-Singapore Double Taxation Avoidance Agreement (DTAA), which the AO found inapplicable as the income was remitted to the USA, not Singapore. The CIT(A) upheld the AO's decision, leading to the current appeal. The Tribunal, after considering additional evidences, decided to remit the case back to the AO for a fresh assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 134506 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-09-2022
• Assessment Year: misc
• Appeal Filed On: 08-02-2023
• Laws Referred To: Income Tax Act, 1961, India-Singapore DTAA
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Double taxation relief; Additional evidence; Set aside

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, (Conducted through E-Court, Rajkot) BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER, And SHRI WASEEM AHMED, JUDICIAL MEMBER आयकर अपील सं./ITA No. 05/Rjt/2020 िनधाᭅरण वषᭅ/Asstt. Years: 2011-2012 M/s Pearl Logistics & Ex-Im Corporation, 207, Nirmala Plaza, Above Allahabad Bank, Opp. Shaneshwer Flat, Bhavnagar. PAN: AAJFP8182H Vs. Income Tax Officer, International Taxation, Rajkot. Assessee by : Shri Dushyant Maharshi, A.R Revenue by : Shri B.D. Gupta, Sr. D.R सुनवाई कᳱ तारीख/Date of Hearing : 08/09/2022 घोषणा कᳱ तारीख /Date of Pronouncement: 07/12/2022 आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-13, Ahmedabad, dated 25/10/2019 arising in the matter of assessment order passed under s. 172(4) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2011-12. ITA No.05/Rjt/2020 A.Y. 2011-12 2 2. The only effective issue raised by the assessee is that the learned CIT(A) erred in confirming the action of AO for assessing the freight income of Rs. 3,52,640/- under section 172(4) of the Act and ignoring the article 8 of India-Singapore DTAA. 3. The assessee is an NRI and shipping agent of M/s Mohar Shipping Corporation Pte Ltd Singapore. The assessee for the year consideration filed provisional & final return dated 21-04-2010 without paying freight tax after claiming benefit of DTAA between India and Singapore. The AO during the assessment proceeding found that the benefit under article 8 of India-Singapore is available to assessee subject to the limitation provided in article 24 of said DTAA. As per the article 24 benefit can be only be of income which is remitted to Singapore Country whereas in the case of assessee, the freight income was remitted to the country USA instead of Singapore. Therefore the assessee/principal M/s Manohar Shipping Corporation Pte Ltd Singapore is not eligible for benefit of India-Singapore treaty as the freight income is neither taxed in Singapore nor in India. Hence, the AO, as per the provisions of section 172(4) of the Act, determined the taxable income of the assessee at Rs. 3,52,640/- only. 4. On appeal by the assessee, the learned CIT(A) also confirmed the order of the AO. 5. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 6. The learned AR before us filed paper book running from pages 1 to 66 which contain additional evidences at pages 15 to 39 of paper book. The learned AR inter alia requested to remit the issue to file the AO for fresh adjudication in the light of additional evidences. 7. The learned DR raised no objection to the contention of the learned AR, if issue is remitted to the file of the AO for fresh adjudication. ITA No.05/Rjt/2020 A.Y. 2011-12 3 8. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset, we note the learned AR for the assessee before us has filed certain additional evidences which were not produced before the lower authorities. In this regard, we note that the rule 29 of Income Tax (Appellate Tribunal) Rule restricts the parties of appeal to file additional evidences in ordinary course of proceeding before ITAT. However the provision of rule 29 of Income Tax (Appellate Tribunal) Rule also empowered the ITAT to allow the submission of the additional evidence if necessary for adjudication of the issue. In our considered opinion, the additional evidences furnished by the learned AR of the assessee before us are necessary piece of evidence in order to adjudicate the issue on hand. Hence, we exercise the power conferred under rule 29 of Income Tax (Appellate Tribunal) Rule and accept the additional evidences filed by the assessee. Before parting, it is also important to note that the Revenue authorities did not get the opportunity to verify and apply their mind on the fresh materials brought by the learned AR of the assessee. Hence, for the sake of justice and fair play, we are in agreement with request of the learned AR that the matter should be remitted to the file of the AO for fresh adjudication. Thus, we hereby set aside the issue to the file of the AO with the direction to adjudicate the issue afresh as per law and after affording proper opportunity to the assessee. It is needless to say that the assessee will cooperate with the AO. Thus the ground of appeal of the assessee is hereby allowed for statistical purposes. 9. In the result appeal of the assessee is hereby allowed for statistical purposes. Order pronounced in the Court on 07/12/2022 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 07/12/2022 Manish