DDIT (IT) 1(2), MUMBAI V. DELMAS FRANCE, MUMBAI

ITA 6040/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1931 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2016
• Appeal Filed By: Department
• Bench Allotted: L
• Next Hearing Date: 08-11-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 29-09-2014
• Court: TRIBUNAL
• Department Lawyers: JASBIR CHOUHAN
• Keywords: Double taxation relief; Deemed to accrue or arise in india; Permanent establishment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L, MUMBAI BEFORE SHRI AMIT SHUKLA (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.5622/MUM/2014 (ASSESSMENT YEAR: 2003-04) DELMAS FRANCE (NOW MERGED WITH CMA CGM S.A.) C/O CMA CGM AGENCIES (INDIA) PVT LTD, INDIA BULLS FINANCE CENTRE, TOWER 3, 8 TH FLOOR SENAPATI BAPAT MARG, ELPHINSTONE WEST, MUMBAI-13 VS JOINT DIRECTOR OF INCOME- TAX (INTERNATIONAL TAXATION), RANGE-1, MUMBAI PAN : AABCC9048G (APPELLANT) (RESPONDENT) I.T.A. NO.6039 & 6040/MUM/2014 (ASSESSMENT YEARS: 2003-04 & 2004-05) ADIT (INTERNATIONAL TAXATION), RANGE-1(2), MUMBAI VS DELMAS FRANCE (NOW MERGED WITH CMA CGM S.A.) C/O CMA CGM AGENCIES (INDIA) PVT LTD, INDIA BULLS FINANCE CENTRE, TOWER 3, 8 TH FLOOR SENAPATI BAPAT MARG, ELPHINSTONE WEST, MUMBAI-13 (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI NIKHIL TIWARI REVENUE BY SHRI JASBIR CHOUHAN DATE OF HEARING : 08-11-2016 DATE OF ORDER : 28 -11-2016 O R D E R 2 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 PER ASHWANI TANEJA, AM: THESE APPEALS PERTAIN TO SAME ASSESSEE INVOLVING I DENTICAL ISSUES, THEREFORE, THESE WERE HEARD TOGETHER AND ARE DISPOS ED OF BY THIS COMMON ORDER. 2. FIRST WE SHALL TAKE UP REVENUES APPEAL IN ITA NO.6040/MUM/2014 FOR A.Y. 2004-05: THIS APPEAL HAS BEEN FILED BY THE REVENUE ON THE FOLLOWING GROUNDS:- 1. 'WHETHER ON THE FACTS, THE CIRCUMSTANCES AND IN LAW THE ID CIT(A) HAS ERRED IN GRANTING THE RELIEF TO THE ASSESSEE HOLDING THAT THE ASSESSEE'S INCOME IS NOT TAXABLE IN INDIA UNDER ARTICLE 9 OF THE DTAA WI TH FRANCE, WITHOUT APPRECIATING THE FACT THAT ALL THE VOYAGES CARRIED OUT BY THE ASSESSEE DID NOT INVOLVE OWNED / CHARTERED/LEASED VESSEL BUT ALSO INVOLVED FEEDER VESSELS AND SLOT CHARTERING' ' THE LD. CIT(A) ERRED IN GRANTING THE RELIEF TO THE ASSESSEE IN TERMS OF ARTICLE 9 OF THE DTAA WITH FRANCE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE'S INCOME IS TAXABLE UNDER ARTICLE 7 BASED ON THE FIXED PE AS WELL AS AGENCY PE. 2. 'WHETHER ON THE FACTS, THE CIRCUMSTANCES AND IN LAW THE ID. CIT(A) ERRED IN GRANTING THE RELIEF TO THE ASSESSEE BY HOLDING THAT IN TERMS OF ARTICLE THE TAXABILITY OF INLAND HAULAGE CHARGES IS INFRUCTUOUS WITHOUT APPRECIATING THE FACT THAT THE ASSESSE'S INCOME IS TAXABLE ON ACCOUNT OF INLAND HAULAGE CHARGES SINCE ARTICLE 7 OF THE DTAA 3. THE APPELLANT PRAYS THAT THE ORDER OF THE ID. CIT(A) BE SET ASIDE ON THE ABOVE GROUNDS AND THAT O F THE ASSESSING OFFICER BE RESTORED. 2. GROUND NO.1 : IN THIS GROUND, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN GRANTING RELIEF TO THE ASSESSEE BY HOLDING THAT ASSESSEES INCOME WAS NOT TAXABLE IN INDIA UNDER ARTICLE 9 OF DTAA BETWEEN IN DIA AND 3 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 FRANCE FOR THE REASON THAT ALL THE VOYAGES CARRIED OUT BY THE ASSESSEE DID NOT INVOLVE OWNED / CHARTERED / LEASED VESSEL BUT ALSO INVOLVED FEEDER VESSELS AND SLOT CHARTERIN G. IT HAS ALSO BEEN CONTENDED IN THE GROUNDS THAT ASSESSEES INCOME WAS TAXABLE UNDER ARTICLE 7 BASED ON FIXED PE AS WE LL AS AGENCY PE. 3. DURING THE COURSE OF HEARING IT WAS SUBMITTED AT T HE OUTSET BY THE LD. COUNSEL OF THE ASSESSEE THAT IDEN TICAL ISSUE CAME UP BEFORE THE TRIBUNAL IN A.YS 2006-07 & 2007- 08 WHEREIN THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. FURTHER, THE APPEAL OF A.Y. 2006-07 WAS CARRIED BEFORE THE HONBLE BOMBAY HIGH COURT BY THE REVENUE WHICH WAS DISMISSED BY THE HIGH COURT. THUS, THE ISSUE S TANDS SETTLED IN FAVOUR OF THE ASSESSEE. 3.1. PER CONTRA, THE LD. DR DID NOT BRING ANYTHING ON RE CORD DURING THE COURSE OF ARGUMENTS TO SHOW THAT IF THER E WAS CHANGE IN FACTS OR LEGAL POSITION IN THE YEAR BEFOR E US AS COMPARED TO A.YS 2006-07 & 2007-08 OR OTHER YEARS W HEREIN ALL THESE ISSUES HAVE BEEN ALREADY DECIDED IN FAVOU R OF THE ASSESSEE. 4. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES IN THIS YEAR AS WELL AS THE ORDER PASSE D BY THE TRIBUNAL AND ALSO THE JUDGMENT OF THE HONBLE BOMBA Y HIGH COURT IN OTHER YEARS WHICH HAS BEEN RELIED UPON BEF ORE US. THE BRIEF BACKGROUND IS THAT THE ASSESSEE COMPANY I S A TAX RESIDENT OF FRANCE AND WAS ENGAGED IN THE BUSINESS OF OPERATION OF SHIPS IN INTERNATIONAL TRAFFIC. DURIN G THE YEAR, 4 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 THE ASSESSEE FILED RETURN OF INCOME SHOWING GROSS R ECEIPTS OF RS.22,07,07,723. IN THE SAID RECEIPTS, THE ASSESSE E INCLUDED INLAND HAULAGE CHARGES (IN SHORT, IHC) OF RS.2,81 ,41,497/- AND CLAIMED IT AS NOT TAXABLE IN VIEW OF ORDER OF T HE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 1993-94. THE ASSES SEE OFFERED TAX @7.5% OF THE AFORESAID RECEIPTS AMOUNTI NG TO RS.1,65,53,080/-. THE RETURN OF INCOME WAS OFFERED TO TAX AFTER CLAIMING 75% EXEMPTION AS PROVIDED IN ARTICLE 9 OF INDIA FRANCE DTAA. THE APPEAL BEFORE US HAS BEEN F ILED IN THE SECOND ROUND OF LITIGATION. IN THE FIRST ROUND OF LITIGATION, THE AO PASSED THE ASSESSMENT ORDER DATE D 12-12- 2006 WHEREIN HE DENIED THE BENEFIT PROVIDED UNDER A RTICLE 9 OF THE TREATY BY HOLDING THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THAT THE ASSESSEE WAS OPERATING THE SHIP. IN OTHER WORDS, THE AO OBSERVED THAT THE ASSESSEE WAS NOT AN OWNER, CHARTERER OR LESSEE OF THE SHIP. FURTHER, THE ASSE SSEE FAILED TO ESTABLISH LINKAGE BETWEEN FEEDER VESSEL AND THE MOTHER VESSELS. IT WAS FURTHER CONTENDED BY THE AO THAT T HE ASSESSEE WAS CARRYING ITS ENTIRE BUSINESS IN INDIA THROUGH AN AGENT-BARWIL AND BY RELYING ON THE JUDGMENT OF DHL OPERATIONS BV, NETHERLANDS (MUM- ITAT) HE HELD THAT DELMAS CONSTITUTES AGENCY PE IN INDIA. AO ESTIMATED THE T OTAL INCOME OF INR 2,32,80,559 (BEING 10% OF GROSS RECEI PTS OF INR 23,28,05,588), WHICH WAS INCLUSIVE OF IHC. IHC WAS NOT INCLUDED IN THE GROSS RECEIPTS BY DELMAS ON THE GRO UND THAT IT WAS NOT TAXABLE IN INDIA. AO HELD THAT 3% OF GRO SS RECEIPTS WOULD BE ON ACCOUNT OF IHC. OUT OF WHICH 10 PERCENT I.E. 5 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 6.99 LACS WAS DEEMED INCOME UNDER SECTION 9(1)(I) O F THE ACT. HOWEVER, NO SEPARATE ADDITION WAS MADE BY THE AO IN THIS REGARD AS IT WAS ALREADY INCLUDED IN GROSS REC EIPTS OF INR 23,28,05,588/- AS STATED ABOVE. 5. IN THE APPEAL BEFORE CIT(A) IN THE FIRST ROUND, THE LD.CIT(A) PASSED ORDER DATED 31-01-2007, WHEREIN BY RELYING ON HIS OWN ORDER FOR A.Y. 2001-02 HE HELD THAT ASSE SSEE HAS BEEN ABLE TO PROVE LINKAGE ON SAMPLE BASIS BETWEEN FEEDER VESSEL AND MOTHER VESSEL AND WAS ENGAGED IN THE OPE RATION OF SHIPS AND THUS HE ALLOWED THE BENEFIT OF ARTICLE 9 . HE DID NOT ADJUDICATE ON THE ISSUE OF PE, AND TREATED TH E SAME AS ACADEMIC IN NATURE. ON THE ISSUE OF IHC, HE RELI ED UPON HIS OWN ORDER FOR A.Y. 2001-02 AND HELD THAT THIS AMOUN T SHOULD FORM PART OF GROSS RECEIPTS AND IS ENTITLED TO THE BENEFIT OF ARTICLE 9 OF DTAA BETWEEN INDIA AND FRANCE. BOTH T HE PARTIES WERE AGGRIEVED WITH THE ORDER OF THE CIT(A) AND THEREFORE, THEY APPROACHED THE TRIBUNAL RAISING THE IR RESPECTIVE GRIEVANCES. THE TRIBUNAL PASSED ORDER D ATED 23- 07-2010 WHEREIN IT RELIED UPON ITS OWN ORDER FOR A. Y. 2001- 02 IN ASSESSEES OWN CASE WITH RESPECT TO BENEFIT T O BE PROVIDED TO THE ASSESSEE UNDER ARTICLE 9 AND HELD T HAT RELIEF GRANTED BY THE CIT(A) ON SAMPLE BASIS WAS NOT CORRE CT APPROACH, AND THEREFORE, MATTER WAS RESTORED TO THE FILE OF THE CIT(A) FOR DETAILED VERIFICATION OF ESTABLISHIN G LINKAGES OF SHIPMENTS BETWEEN MOTHER VESSEL AND THE FEEDER VESS EL. ON THE ISSUE OF IHC IT WAS HELD THAT IHC WOULD BE ELIGIBLE FOR ARTICLE 9 BENEFIT IF IT WAS FOR MINISCULE AMOUNT AN D HELD THAT 6 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 TAXABILITY OF IHC WOULD BE DEPENDENT ON THE OUTCO ME OF TREATMENT PROVIDED TO FREIGHT INCOME FROM FEEDER VE SSEL AND THEREFORE HE RESTORED THIS ISSUE ALSO TO CIT(A). O N PE ISSUE ALSO THE MATTER WAS RESTORED TO THE FILE OF THE CIT (A) AS THIS ISSUE WAS DEPENDENT ON THE OUTCOME OF ABOVE MENTION ED ISSUES. 6. IN THE SECOND ROUND, THE LD. CIT(A) PASSED ORDER DA TED 28-03-2014, WHICH IS THE IMPUGNED ORDER IN THE APPE AL FILED BEFORE US. IT IS NOTED THAT BEFORE PASSING HIS APP EAL ORDER, THE CIT(A) HAD SENT THE MATTER TO AO FOR EXAMINATIO N DURING REMAND PROCEEDINGS AND CALLED FOR REMAND REPORT. D URING REMAND PROCEEDINGS, THE ASSESSEE HAD ESTABLISHED BE FORE THE AO LINKAGES IN THE SHIPMENTS BETWEEN MOTHER VESSELS AND FEEDER VESSELS AND ACCORDINGLY REMAND REPORT WAS FU RNISHED BY THE AO TO THE CIT(A) BY THE AO, ON THE BASIS OF WHICH RELIEF WAS GRANTED BY THE LD.CIT(A) WHICH HAS BEEN CONTESTED BEFORE US BY THE REVENUE. 7. WE HAVE GONE THROUGH THE ENTIRE FACTS OF THE CASE. THE LD. COUNSEL OF THE ASSESSEE PLACED BEFORE US COPY O F THE REMAND REPORT SENT BY THE AO ON 07-03-2014 TO THE C IT(A) WHICH READS AS UNDER:- IN THIS REGARD, IT IS SUBMITTED THAT THE ASSESSEE HAS PRODUCED NECESSARY DOCUMENTS/DETAILS TO ESTABLISH THE FEEDER VESSEL-MOTHER VESSEL LINK IN RESPECT OF VOYAGES INVOLVING FEEDER VESSELS, HOWEVER, IN RESPE CT OF FREIGHT OF RS.1 ,26,95,744 IT HAS NOT BEEN ABLE TO PRODUCE ANY DOCUMENTS TO ESTABLISH THE FEEDER VESSEL-MOTHER VESSEL LINK. 7 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 AFTER CONSIDERING THE AFORESAID REMAND REPORT, LD. CIT(A) GRANTED PART RELIEF TO THE ASSESSEE WITH REGARD TO THE LINKAGE AND ALSO HELD THAT ITS AGENT NAMELY M/S BARWIL FORB ES SHIPPING SERVICES LTD (I.E. BFSSL) DOES NOT CONSTIT UTE FIXED PE OR AGENCY PE OF THE ASSESSEE COMPANY IN INDIA. IT IS NOTED BY US THAT LD. CIT(A) HAS GRANTED APPROPRIATE RELIEF T O THE ASSESSEE ONLY TO THE EXTENT WHICH PROPER LINKAGES C OULD BE ESTABLISHED BY THE ASSESSEE, AFTER CALLING FOR THE REMAND REPOT AND VERIFYING THE FACTS. ON THE ISSUE OF PE , RELEVANT PORTION OF ORDER OF LD. CIT (A) READS AS UNDER:- 8.1 HAVE CONSIDERED THE AO'S ORDER AS WELL AS THE APPELLANT'S AR SUBMISSION. HAVING TAKEN NOTE TO TH E APPELLANT'S SUBMISSION AND THE AO'S ORDER, I FIND T HAT THE ISSUE INVOLVED IN THIS GROUND OF APPEAL ARE COVERED IN FAVOUR OF THE APPELLANT BY THE JURISDICTIONAL BOMBAY HIGH COURT'S DECISION IN THE CASE OF DIT V BALAJI SHIPPING UK LTD. (253 CTR 460) AND ALSO BY THE DECISION OF JURISDICTIONAL MUMBAI ITAT IN THE APPELLANT'S OWN CASE BY THE ORDER DTD. 11TH JANUARY, 2012 IN AY 2006-07. KEEPING RELIANCE ON THE DECISION OF JURISDICTIONAL BOMBAY HIGH COURT AND ALSO IN THE APPELLANTS OWN CASE, IT IS HELD TH AT APPELLANT IS ENTITLED FOR BENEFIT OF RELIEF UNDER ARTICLE90F THE DT AA. HOWEVER, AFTER PERUSAL OF TH E REMAND REPORT, I DIRECT THE AO TO RESTRICT THE RELI EF TO THE EXTENT THE APPELLANT HAS GIVEN THE DETAILS AND ESTABLISHED THE FEEDER VESSEL, MOTHER VESSEL LINK- THROUGH PRODUCTION OF DOCUMENTS IN THE REMAND REPORT PROCEEDINGS. THUS, THE APPELLANT IS NOT ENTITLED TO THE RELIEF TO THE EXTENT OF RS.1 ,26,95,744/- WHEREIN THE APPELLANT COULD NOT PRODUC E ANY DOCUMENTS TO ESTABLISH THE FEEDER VESSEL - MOTHER VESSEL LINK. IN ADDITION TO THIS, HAVING TAK EN NOTE OF THE APPELLANT'S SUBMISSION AND THE ORDER OF 8 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 THE JURISDICTIONAL ITAT IN THE APPELLANT'S OWN CASE FOR AY 2006-07 DT. 11TH JANUARY, 2012 IT IS HELD TH AT THE BFSSL DOES NOT CONSTITUTE A FIXED PE OR AGENCY PE FOR THE APPELLANT. ACCORDINGLY KEEPING RELIANCE OF VARIOUS DECISIONS BY THE APPELLANT'S AR AND ALSO TH E DECISION OF THE JURISDICTIONAL BOMBAY HIGH COURT TH IS ISSUE IS ALSO DECIDED IN FAVOUR OF THE APPELLANT. I N THE RESULT THE APPELLANT'S THESE GROUNDS OF APPEAL ARE PARTLY ALLOWED. 8. WE FIND THAT THE AFORESAID DECISION HAS BEEN GIVEN BY THE LD. CIT(A) AFTER RELYING UPON THE DECISION OF T HE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2006-07, WHEREIN IT HAS BEEN HELD THAT BFSSL DID NOT CONSTITUTE PE OR AGENCY PE OF THE ASSESSEE. NO DISTINCTION HAS BEEN MADE OUT BY THE L D. DR EITHER ON FACTS OR ON LAW. THUS, WE FIND THAT THE I SSUE BEFORE US IS COVERED IN FAVOUR OF THE ASSESSEE IN VIEW OF THE ORDERS OF THE TRIBUNAL OF EARLIER YEARS AS WERE RELIED UPO N BY THE LD. CIT(A) ALSO. THUS, WE DO NOT FIND ANY REASON T O INTERFERE IN THE ORDER OF THE LD. CIT(A) AND, THEREFORE, THE SAME IS UPHELD. 9. GROUND 2: IN THIS GROUND, THE REVENUE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN GRANTING RELIEF TO THE ASSESSEE BY HOLDING THAT TAXABILITY OF IHC WAS NOT POSSIBLE U NDER ARTICLE 9 OF DTAA IN VIEW OF THE FACT THAT THE ASSESSEES I NCOME FROM IHC WAS TAXABLE AS PER ARTICLE 7 OF THE DTAA. IN THE IMPUGNED ORDER PASSED BY THE LD.CIT(A), THE RELIEF HAS BEEN GRANTED BY HIM BY RELYING UPON THE ORDER OF THE TRI BUNAL FOR A.Y.1993-94 AS WELL AS FOR A.Y 2006-07 BY OBSERVING AS UNDER:- 9 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 9. NEXT GROUND OF APPEAL RELATES TO TAXABILITY OF IHC INCOME. IN THIS REGARD THE APPELLANT'S AR HAS FILED A DETAILED WRITTEN SUBMISSION. THE SAME IS EXTRACTED HEREIN BELOW AS UNDER:- THE APPELLANT REITERATES ITS RELIANCE ON THE ITAT'S DECISION ITS 'OWN CASE (APPEAL NO. 9674/BOM/1995 FOR THE ASSESSMENT YEAR 1993-94) FOR THE CONTENTION THAT THE RECEIPTS ON ACCOUNT OF ANCILLARY CHARGES INTERELIA IHC ARE NOT LIABLE TO TAX. IN ANY EVENT, IN VIEW OF THE ITAT'S FINDING FOR THE ASSESSMENT YEAR 2006-07 (AS DISCUSSED IN PARA 2.2.7 HEREINABOVE) THAT THE APPELLANT DOES NOT HAVE A PE IN INDIA, THE INCOME IN THE NATURE OF IHC IS NOT LI ABLE TO TAX IN INDIA. THE APPELLANT PRAYS THAT THE LEARNED ADIT BE DIRECTED ACCORDINGLY. 10. HAVING TAKEN NOTE OF THE APPELLANT'S SUBMISSION AND ALSO TAKING NOTE OF MUMBAI ITAT VIDE ITA NO.9674/BOM/1995 FOR A.Y. 1993-94, THE APPELLANT'S THIS GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT. ACCORDINGLY, THE APPELLANT'S THIS GROUND OF APPEAL IS ALLOWED. 10. IT WAS ARGUED BEFORE US BY THE LD. COUNSEL THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE IN V IEW OF EARLIER YEARS ORDERS. NO DISTINCTION HAS BEEN MAD E BEFORE US. THUS, THE ORDER OF LD. CIT(A) ON THIS GROUND I S UPHELD AND GROUND 2 IS DISMISSED. 11. AS A RESULT, APPEAL OF THE REVENUE IS DISMISSED. 12. NOW WE SHALL TAKE UP APPEAL OF THE REVENUE FOR A.Y. 2003-04 IN ITA NO.6039/MUM/2014 FILED ON THE FOLLOW ING GROUNDS:- 1. 'WHETHER ON THE FACTS, THE CIRCUMSTANCES AND IN THE LAW THE ID CIT(A) HAS ERRED IN GRANTING THE REL IEF TO THE ASSESSEE HOLDING THAT THE ASSESSEE'S INCOME IS NOT TAXABLE IN INDIA UNDER ARTICLE 9 OF THE DTAA WI TH FRANCE, WITHOUT APPRECIATING THE FACT THAT ALL THE 10 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 VOYAGES CARRIED OUT BY THE ASSESSEE DID NOT INVOLVE OWNED / CHARTERED/LEASED VESSEL BUT ALSO INVOLVED FEEDER VESSELS AND SLOT CHARTERING' ' THE LD. CIT(A) ERRED IN GRANTING THE RELIEF TO THE ASSESSEE IN TERMS OF ARTICLE 9 OFF THE DTAA WITH FRANCE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE'S INCOME IS TAXABLE UNDER ARTICLE 7 BASED ON THE FIXED PE AS WELL AS AGENCY PE'. 2. 'WHETHER ON THE FACTS, THE CIRCUMSTANCES AND IN LAW THE ID. CIT(A) ERRED IN GRANTING THE RELIEF TO THE ASSESSEE BY HOLDING THAT IN TERMS OF ARTICLE THE TAXABILITY OF INLAND HAULAGE CHARGES IS INFRUCTUOUS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE'S INCOME IS TAXABLE ON ACCOUNT OF INLAND HAULAGE CHARGES SINCE ARTICLE 7 OF THE DTAA' 13. IT IS NOTED THAT THE ISSUES RAISED ARE IDENTICAL TO THE ISSUES RAISED IN A.Y. 2004-05. NO DISTINCTION HAS BEEN MADE ON FACTS OR IN LAW BY THE LD. DR. THEREFORE, FOLLO WING OUR ORDER FOR A.Y. 2004-05 WE DISMISS THIS APPEAL ALSO. 14. AS A RESULT, REVENUES APPEAL IS DISMISSED. 15. NOW WE SHALL TAKE UP APPEAL OF THE ASSESSEE FOR A.Y . 2003-04 IN I.T.A. 5622/MUM/2014 FILED ON THE FOLLOW ING GROUNDS:- THE APPELLANT OBJECTS TO THE ORDER DATED MARCH 28, 2014 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-10, MUMBAI FOR THE ASSESSMENT YEAR 2003- 04, ON THE FOLLOWING AMONG OTHER GROUNDS. EACH OF THE FOLLOWING GROUNDS OF APPEALS IS WITHOUT PREJUDICE TO THE OTHER: 1. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT PROVIDING SPECIFIC FINDINGS THAT APPELLANT DOES NOT HAVE A PERMANENT ESTABLISHMENT IN INDIA. 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT PROVIDING SPECIFIC FINDINGS THAT APPELLANT'S RECEIP TS ON ACCOUNT OF INLAND HAULAGE CHARGES ARE NOT LIABLE TO TAX IN INDIA. 11 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 16. WITH THE ASSISTANCE OF THE PARTIES, IT WAS NOTED BY US THAT ON THE ISSUE OF PE, LD. CIT(A) FOLLOWED THE EA RLIER YEARS ORDERS, BUT WHILE GIVING CONCLUSION NO CLEAR FINDIN G WAS GIVEN ON THE ISSUE OF PE AND, THEREFORE, THE LD. COUNSEL REQUESTED FOR CLEAR FINDING ON THIS ISSUE. THE LD. DR DID NO T MAKE ANY DISTINCTION ON FACTS OR ON LAW. IT IS NOTED BY US THAT WHILE CONCLUDING THIS ISSUE, THE LD. CIT(A HAS OBSERVED A S UNDER:- 10. I HAVE CONSIDERED THE AO'S ORDER AS WELL AS APPELLANT'S AR SUBMISSION. HAVING CONSIDERED BOTH, I FIND THAT THE ISSUES INVOLVED IN THIS GROUND OF APP EAL ARE COVERED IN FAVOUR OF THE APPELLANT VIDE THIS OF FICE ORDER BEARING NO. CIT(A)-10/ADIT(LT)-1(2)/IT-64/13- 14 FOR AY. 2010-11 & CIT(A)-1 0/00IT(IT)-1 (2)/IT- 355/11-12 FOR AY 04-05 DT. 27-3-2014. THUS KEEPING RELIANCE ON THE AFORESAID DECISION OF THE UNDERSIGN ED WHICH BASED ON THE JURISDICTIONAL MUMBAI ITAT IN TH E APPELLANT'S OWN CASE AND THE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF BALAJI SHIPPING UK LTD. ( 253 CTR 460), THE APPELLANT'S THESE GROUNDS OF APPEAL ARE ALLOWED IN FAVOUR OF THE APPELLANT AND ALSO BY THE DECISION OF JURISDICTIONAL MUMBAI ITAT IN THE APPELLANT'S OWN CASE BY THE ORDER DTD. 11TH JANUARY , 2012 IN AY 2006-07. KEEPING RELIANCE ON THE DECISIO N OF JURISDICTIONAL BOMBAY HIGH COURT AND ALSO IN THE APPELLANT'S OWN CASE, IT IS HELD THAT APPELLANT IS ENTITLED FOR BENEFIT OF RELIEF UNDER ARTICLE 9 OF T HE DTAA. 17. IT IS NOTED THAT THE LD. CIT(A) HAS FOLLOWED THE OR DERS OF EARLIER YEARS WHEREIN IT WAS HELD THAT ASSESSEE DID NOT HAVE A PE IN INDIA. THE LD. DR HAS ALSO NOT DRAWN ANY D ISTINCTION ON FACTS OR LEG AL POSITION. THEREFORE, FOLLOWING THE ORDER OF EARLIER YEARS IT IS HELD THAT ASSESSEES AGENT NAME LY M/S BARWIL FORBES SHIPPING SERVICES LTD (I.E. BFSSL) DI D NOT CONSTITUTE PE IN INDIA AND THUS, THIS GROUND IS DEC IDED IN 12 I.T.A. NO.6039 & 6040 & 5622/MUM/2014 FAVOUR OF THE ASSESSEE. 18. WITH REGARD TO GROUND 2, WHICH IS RELATED TO TAXABI LITY OF IHC, IT IS NOTED THAT THIS ISSUE IS ALSO COVER ED IN FAVOUR OF THE ASSESSEE IN VIEW OF OUR ORDER FOR A.Y. 2004-05 AND, THEREFORE, FOLLOWING THE SAME, THIS GROUND IS ALSO DECIDED IN FAVOUR OF THE ASSESSEE. 19. AS A RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 20. IN RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF HEARING. SD/- SD/- (AMIT SHUKLA) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 28 TH NOVEMBER, 2016 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , L-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES