DCIT (IT) - 4(2)(2), MUMBAI V. STAR CRUISE MANAGEMENT LTD., MUMBAI

ITA 6415/MUM/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6051 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 31-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Keywords: Business income
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI SHAMIM YAHYA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 6415/MUM/2016 ASSESSMENT YEAR: 2012 - 2013 THE DCIT (IT) - 4(2)(2), ROOM NO. 1708, 17 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021 VS. M/S STAR CRUISE MANAGEMENT LTD., C/O KANODIA CHAUHAN & CO. CHARTERED ACCOUNTANTS, 1032/33 HUBTOWN SOLARIES, N.S. PHADKE MARG, ANDHERI (EAST), MUMBAI 400069 PAN: AAHCS0352F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI D.G. P ANSARI (DR) ASSESSEE BY : SHRI VIPUL JOSHI (AR DATE OF HEARING: 10/10 /201 8 DATE OF PRONOUNCEMENT: 08 / 01 /201 9 PER RAM LAL NEGI, JM T HE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE OR DER DATED 25.07.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 58 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2012 - 13 , WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED BY AO U/S 143 (3) R.W.S 144 (C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING NIL INCOME. SINCE, THE CASE WAS SELECTED FOR SCR UTINY, THE AO ISSUED NOTICE U/S 143 (2) AND 142 (1) OF THE ACT. IN RESPONSE TO THE SAID NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO FROM TIME TO TIME AND FILED THE DETAILS CALLED FOR. IT WAS NOTICED THAT THE ASSESSEE STAR CRUISE MANAGEMENT LIMITED, A FOREIGN 2 ITA NO. 6415 MUM/2016 ASSESSMENT YEAR: 2012 - 13 COMPANY HAD ENTERED INTO A CANVASSER AGREEMENT WITH STAR CRUISE (INDIA) SERVICES PVT. LTD. THE FIRST ISSUE TO BE DECIDED BY THE AO WAS WHETHER ANY INCOME ACCRUED IN INDIA ON THE PAYMENT RECEIVED IN INDIA FOR UTILIZING THE SERVICES PROVIDED BY THE CRUISE OPERATED OUTSIDE INDIA BY THE PAYEE. THE AO AFTER HEARING THE ASSESSEE HELD THAT THE GROSS AMOUNT RECEIVED DURING THE PERIOD BY THE ASSESSEE IS LIABLE TO BE TAXED IN INDIA @7.5% AND ACCORDINGLY WORKED OUT THE TAX AT RS. 8,64,47,631/ - . T HE AO ALSO MADE AN ADDITION OF RS. 8,64,47,631/ - UNDER THE HEAD BUSINESS INCOME . SIMILARLY, THE AO MADE AN ADDITION OF RS. 13,71,717/ - UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDINGLY, THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSE E AT RS. 8,78,19,348/ - AS AGAINST THE NIL RETURN FILED BY THE ASSESSEE. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF R S. 8,64,47,631/ MADE BY THE AO BY FOLLOWING THE DECISIONS OF THE ITAT MUMBAI RE NDERED IN ASSESSEES OWN CASES FOR THE PREVIOUS YEARS. AGAINST THE SAID ORDER, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3 . T HE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PA SSED BY THE LD. CIT (A) BY RAISING THE FOLLOWING EFFECTIVE GROUNDS : - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS CORRECT IN LAW IN HOLDING THAT GROSS RECEIPT RECEIVED BY SCML AS PRINCIPAL FROM THE AGENTS IS NOT CHAR GEABLE TO TAX U/S 5(2)(A) OF THE INCOME TAX ACT, 1961? 2. WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE CIT (A) IS CORRECT IN HOLDING THAT NO INCOME ACCRUES OR ARISES TO THE ASSESSEE IN INDIA REGARDING THE BUSINESS OF SALE O F TICKETS THROUGH THE SELLING AGENTS? 4 . AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GROUNDS RAISED BY THE REVENUE ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE 3 ITA NO. 6415 MUM/2016 ASSESSMENT YEAR: 2012 - 13 DECISION S OF THE MUMBAI TRIBUNAL RENDERED IN THE ASSESSEES OWN CASE, ITA NOS. 2632 AND 2633/MUM/2016 FO R THE A.Y. 2010 - 11 AND 2011 - 12. THE LD. COUNSEL FURTHER SUBMITTED THAT THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION S OF THE TRIBUNAL IN ASSESSEES OWN CASES FOR THE PREVIOUS YEARS. SINCE, THE ISSUES ARE COVERED IN FAVOUR OF THE ASSESSEE, THERE IS NO MERIT IN THE APPEAL OF THE REVENUE. 5 . ON THE OTHER HAND, THE LD. DR DID NOT CONTROVERT THE FACT THAT THE ISSUES RAISED BY THE REVENUE ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER S OF THE TRIBUNAL. HOWEVER, THE LD DR RELYING ON THE ASSESSMENT ORDER SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITION MADE BY THE AO. 6 . WE HAVE GONE THROUGH THE MATERIAL ON RECORD IN THE LIGHT OF THE RIVAL SUBMISSIONS. AS POINTED OUT BY TH E LD. COUNSEL FOR THE ASSESSEE, THE COORDINATE BENCH OF THE TRIBUNAL HAS DECIDED THE IDENTICAL ISSUES IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE ITA NO. 2632 AND 2633/MUM/2016 FOR THE A.Y. 2010 - 11 AND 2011 - 12 RESPECTIVELY. THE OPERATIVE PART OF T HE ORDER OF THE COORDINATE BENCH READS AS UNDER: 9. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. 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 UNDE R: - 1. ITA NO. 4973/M/2005 ITA NO. 497/M/2006 2. I TA 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 4 ITA NO. 6415 MUM/2016 ASSESSMENT YEAR: 2012 - 13 10. T HE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THE HANDS OF THE PAYER I.E. STAR CRUISE (INDIA) TRAVEL SERVICES PVT. LTD. IT HAS BEEN HELD THAT THE SAID COMPANY WAS NOT RESPONSIBLE FOR TAX AT SOURCE AS THE INCOME OF THE ASSES S EE M/S SCML CANNOT BE HE LD AS TAXABLE IN INDIA TO THE EXTENT OF AMOUNT OF SALE OF THE CRUISE TICKETS IN INDIA. IN THIS REGARD, THE LD. COUNSEL OF THE ASSESSEE REFERRED TO THE ORDER OF THE TRIBUNAL IN THE CASE OF 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 WHICH THE TRIBUNAL HAS SIMILARLY HELD THAT NO INCOME HAS ACCRUED OR ARISEN IN INDIA IN RESPECT OF BOOKING OR SALE OF TICKETS FOR TOUR PACKAGES OF THE CRUISE IN INDIA . 11. THUS FROM THE ABOVE IT IS AMPLY EVIDENT THAT THIS TRIBUNAL HAS CONSISTENTLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. NO CASE HAS BEEN MADE OUT THAT THERE ARE ANY DISTINGUISHING FEATURES IN THE PRESENT YEAR OR THAT THE EARLIER DECISION OF THE TRI BUNAL HAS BEEN REVERSED BY THE HONBLE JURISDICTIONAL HIGH COURT. HENCE, IN ACCORDANCE WITH THE AFORESAID DISCUSSION AND PRECEDENT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, WE UPHOLD THE SAME. 7 . WE FURTHER NOTICE THAT THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUES IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE ORDERS PASSED BY THE TRIBUNALS IN ASSEESSEES OWN CASE S FOR EARLIER ASSESSMENT YEARS. SINCE, THE ISSUES INVOLVED IN THE PRESENT CA SE ARE COVERED IN THE FAVOUR OF THE ASSESSEE BY THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL AND SINCE THE ORDER PASSED BY THE LD. CIT(A) IS IN ACCORDANCE WITH THE ORDER OF THE TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE ORDER INTERFERE WITH. HENCE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 5 ITA NO. 6415 MUM/2016 ASSESSMENT YEAR: 2012 - 13 IN THE RESULT, APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2012 - 13 IS DISMISSED . ORDER P RONOUNCED IN THE OPEN COURT ON 8 TH JANUARY , 2019 . SD/ - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBA I ; DATED: 08 / 01 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI