Arcochart Trading and Shipping Private Limited, Mumbai, Agent Interocean Shipping (India) Pvt. Ltd., Mumbai V. ITO, International Taxation, Nellore, Nellore

ITA 558/HYD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1953 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-08-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NARMADA
• Assessee Lawyers: SUBRAMANYAM CHIMALAPATI
• Section: 143(3); 154

Judgement Text

ITA NOS 558 OF 2017 AND 537 OF 2018 ARCOCHART TRADING AND SHIPPING PRIVATE LTD MUMBAI. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NOS. 558/HYD/2017 & 537/HYD/2018 (ASSESSMENT YEAR: 2014-15) M/S. ARCHOCHART TRADING & SHIPPING P LTD, MUMBAI C/O INTEROCEAN SHIPPING (INDIA) PRIVATE LTD, MUTHUKUR,A.P PAN: AAKCA5933H VS INCOME TAX OFFICER (INTERNATIONAL TAXATION) NELLORE (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SUBRAMANYAM CHIMALAPATI FOR REVENUE : SMT. M. N ARMADA, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE ASSESSEES APPEALS FOR THE A.Y 2014-15 AGAINST THE ORDER PASSED BY THE AO U/S 172(4) OF TH E ACT. 2. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A LETTER DATED 03.07.2018 SEEKIN G PERMISSION TO WITHDRAW THE APPEAL IN ITA NO. 537/HYD/2018, BECAUS E THE ASSESSEE HAD ALREADY FILED AN APPEAL AGAINST THE SA ME ORDER OF CIT(A) FOR THE SAME A.Y. AND ON THE SAME ISSUES ON 27.3.2017 DATE OF HEARING: 14.08 . 201 8 DATE OF PRONOUNCEMENT: 3 1 . 0 8 .2018 ITA NOS 558 OF 2017 AND 537 OF 2018 ARCOCHART TRADING AND SHIPPING PRIVATE LTD MUMBAI. PAGE 2 OF 4 WHICH IS NUMBERED AS ITA NO.558/HYD/2017. THEREFORE , THERE IS DUPLICATION OF APPEALS. WE ACCORDINGLY DISMISS APPE AL IN ITA NO.537/HYD/2018. 3. AS REGARDS ITA NO.558/HYD/2017 IS CONCERNED, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW: 1. THE LD CIT(APPEALS) ERRED IN DISMISSING THE APPE AL OF THE APPELLANT COMPANY IN LIMINE AND NOT ADMITTING T HE SAME BY NOT CONDONING THE DELAY IN FILING OF THE AP PEAL ON THE BASIS OF THE APPLICATION FILED BY THE APPELL ANT FOR CONDONATION OF THE DELAY TOGETHER WITH THE AFFIDAVI T FILED ALONG WITH THE APPEAL MEMO. 2. THE LD INCOME TAX OFFICER, INTERNATIONAL TAXATIO N (ASSESSING OFFICER OR 'AO') ERRED IN PASSING THE OR DER UNDER SECTION 172(4) OF THE INCOME TAX ACT ON THE APPELLANT'S AGENT AND ASSESSING THE FREIGHT INCOME FROM THE VESSEL 'MV POLYPAILIN NAREE' BY APPLYING PROVIS IONS OF SECTION 172 OF THE ACT. 3. THE LD AO HAS MADE THE ASSESSMENT UNDER SECTION 172(4) EVEN THOUGH THE APPELLANT IN THE INSTANT CAS E IS AN INDIAN RESIDENT SHIPPING COMPANY AND THE PROVISIONS OF SECTION 172 ARE NOT APPLICABLE TO RES IDENT SHIP OWNER. 4. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRE D IN NOT APPRECIATING THAT THE LD INCOME TAX OFFICER, INTERNATIONAL TAXATION ERRED IN APPLYING THE RATE O F 7.5% OF THE FREIGHT INCOME EARNED AS PER THE PROVISIONS OF SECTION 172(2)WHEN THE SAID SECTION IS APPLICABLE O N THE NON RESIDENT SHIP OWNER AND HENCE THE ORDER IS VOID AB INITIO. 5. THE LD AO FURTHER ERRED IN APPLYING THE INCOME T AX RATE OF 40% WHILE COMPUTING THE INCOME TAX LIABILIT Y OF THE APPELLANT BY ERRONEOUSLY CONSIDERING THE APPELL ANT AS A NON RESIDENT COMPANY. 6. THE LD AO FURTHER ERRED IN TREATING M/S INTEROCE AN SHIPPING PVT LTD AS AGENT OF THE APPELLANT COMPANY ITA NOS 558 OF 2017 AND 537 OF 2018 ARCOCHART TRADING AND SHIPPING PRIVATE LTD MUMBAI. PAGE 3 OF 4 UNDER THE PROVISIONS OF SECTION 172(3) WHEN THAT PROVISIONS IS APPLICABLE ONLY IF THE SHIP OWNER IS THE NONRESIDENT. 7. THE LD AO FURTHER ERRED IN PASSING THE PROTECTIV E ASSESSMENT ORDER ON THE INDIAN AGENT WHEN THE TAX O N THE INCOME FROM FREIGHT EARNED BY THE APPELLANT COMPANY IS PAID IN ITS ASSESSMENT ORDER PASSED UNDE R SECTION 143(3) OF THE INCOME TAX ACT AS THE APPELLA NT COMPANY IS A RESIDENT COMPANY. THE APPELLANT CRAVES TO ADD TO, ALTER OR AMEND THE FOREGOING GROUNDS, WHICH ARE WITHOUT PREJUDICE TO O NE ANOTHER, AT THE TIME OF HEARING. 4. AS SEEN FROM GROUND NO.1, THE CIT (A) HAS DISMIS SED THE ASSESSEES APPEAL BY REFUSING TO CONDONE THE DE LAY. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELAY IN FILING OF THE APPEAL BEFORE THE CIT(A) WAS ONLY OF 40 DAYS AND THAT THE APPLICATION U/S. 154 OF THE ACT, ASSESSEE HAD FILED UNDER THE IMPRESSION THAT THE ASSESSEE WOULD GET RELIEF IN TH E SAID APPEAL BUT THE APPLICATION U/S. 154 WAS REJECTED ON 20.02. 2015 AND THEREFORE, THE APPEAL AGAINST THE ORDER U/S 172(4) WAS FILED WITH A CONDONE DELAY PETITION. IT WAS SUBMITTED THAT THE DELAY WAS ONLY DUE TO THE ASSESSEE PURSUING THE 154 APPLICATION AN D WAS NOT WILFUL AND THEREFORE PRAYED FOR RELIEF. 5. THE LEARNED DR, HOWEVER, RELIED UPON THE ORDERS OF THE CIT (A). ITA NOS 558 OF 2017 AND 537 OF 2018 ARCOCHART TRADING AND SHIPPING PRIVATE LTD MUMBAI. PAGE 4 OF 4 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE DELAY IN FILING OF THE APPEAL BEFORE THE CIT (A) WAS ONLY OF 40 DAYS. WE ARE CONVINCED BY TH E REASONS GIVEN BY THE ASSESSEE THAT HE WAS PURSUING THE ALTE RNATE REMEDIES BEFORE THE AO AND THEREFORE, THE DELAY HAS OCCURRED . WE THEREFORE, CONDONE THE DELAY OF 40 DAYS IN FILING OF THE APPEA L BEFORE THE CIT(A) AND DIRECT THE CIT (A) TO DISPOSE OF THE APP EAL ON MERITS. 7. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.558/HYD/2017 IS TREATED AS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2018. SD/- SD/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST AUGUST, 2018. VINODAN/SPS COPY TO: 1 M/S. ARCHOCHART TRADING & SHIPPING (P) LTD, FLAT NO.01, MK BHAWAN, GROUND FLOOR, 300 BHAGAT SINGH ROAD, FORT, MUMBAI- 400001 2 ITO (INTERNATIONAL TAXATION), NELLORE 3 CIT (A) - 10 HYDERABAD 4 CIT (IT & TP) HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER