ADIT (IT) 1(1), MUMBAI V. A.P. MOLLER MAERSK A/S., MUMBAI

ITA 7683/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9137 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 09-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Double taxation relief
• Section: 244A

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L, MUMBAI .. , ! '# $% , & !, ' BEFORE SHRI R.S.SYAL, AM AND SHRI AMIT SHUKLA, JM ./ ITA NO.7676/MUM/2010 ( &) * &) * &) * &) * / / / / ASST YEAR : 2005-2006) M/S.A.P.MOLLER MAERSK A/S C/O.MAERSK LINE INDIA PRIVATE LIMITED 12 TH FLOOR, TOWER A, URMI ESTATE GANPATRO KADAM MARG, LOWER PAREL (W) MUMBAI 400 013. PAN : AAECA4801C. THE DY.DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-1(1) MUMBAI. ( +, / // / APPELLANT) ) ) ) ) / VS. ( -.+,/ RESPONDENT) ./ ITA NO.7683/MUM/2010 ( &) * &) * &) * &) * / / / / ASST YEAR : 2005-2006) THE DY.DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-1(1) MUMBAI. M/S.A.P.MOLLER MAERSK A/S C/O.MAERSK LINE INDIA PRIVATE LIMITED MUMBAI 400 013. ( +, / // / APPELLANT) ) ) ) ) / VS. ( -.+,/ RESPONDENT) / 0 1 0 1 0 1 0 1 / REVENUE BY : SHRI MAHESH KUMAR &) 2# 0 1 / ASSESSEE BY : S/SHRI PORUS KAKA & DIVESH CHAWLA ) 0 # / / / / DATE OF HEARING : 13.12.2012 34* 0 # / DATE OF PRONOUNCEMENT : 14.12.2012 !$ !$ !$ !$ / / / / O R D E R PER R.S.SYAL, AM : THESE TWO CROSS APPEALS ONE BY THE ASSESSEE AND T HE OTHER BY THE REVENUE ARISE OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 23.08.2010 IN RELATION TO A SSESSMENT YEAR 2005-2006. ITA NO.7676 &7683/MUM/2010 M/S.A.P.MOLLER MAERSK A/S. 2 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APP EAL IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) IN NOT TREATING THE PAYMENTS RECEIVED FROM MIPL, LIL AND SIPL IN THE NATURE OF FEES FOR TECHNICAL SERVICES UNDER ARTICLE 13(4) OF THE DOUBL E TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND DENMARK (HERE INAFTER CALLED AS THE DTAA). 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS A NON- RESIDENT COMPANY ENGAGED IN THE BUSINESS OF SHIPPIN G, CHARTERING AND RELATED BUSINESSES. IN THE COURSE OF ITS INTERNATIO NAL SHIPPING BUSINESS, THE ASSESSEE RECEIVED CERTAIN AMOUNT FROM MIPL, LIL AND SIPL ON ACCOUNT OF COST SHARED COST OF GLOBAL TRACK ING SYSTEM WHICH WAS CONSIDERED AS LINKED TO THE SHIPPING INCOME AS PER ARTICLE 9 OF THE DTAA. THE ASSESSING OFFICER HELD SUCH AMOUNT TO BE ROYALTY / FEES FOR TECHNICAL SERVICES AS PER SECTION 9(1)(VI) AND 9(1)(VII) OF THE ACT AS WELL AS ARTICLE 13(4) OF THE DTAA. THE LEARN ED CIT(A), FOLLOWING THE ORDER PASSED BY THE TRIBUNAL IN ASSES SEES OWN CASE FOR THE PRECEDING YEAR, HELD THE AMOUNT AS PROFIT DERIV ED FROM OPERATION OF SHIPS IN INTERNATIONAL TRAFFIC AND HENCE NOT TAX ABLE IN INDIA AS PER ARTICLE 9(1) OF DTAA. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE LEARN ED CIT(A) HAS HELD SUCH AMOUNT AS PROFIT DERIVED FROM OPERATION OF SHI PS COVERED UNDER ARTICLE 9(1) OF THE DTAA BY RELYING ON THE ORDER PA SSED BY THE ITA NO.7676 &7683/MUM/2010 M/S.A.P.MOLLER MAERSK A/S. 3 TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER YEA R. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT DISTINGUISH T HE FACTS OF THE INSTANT CASE VIS--VIS THE SAID EARLIER YEAR. IN VI EW OF THIS POSITION, WE UPHOLD THE IMPUGNED ORDER AND DISMISS THE GROUND RA ISED BY THE REVENUE. 5. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS AP PEAL IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) TO TAX INTEREST OF ` 1,11,52,644 RECEIVED ON INCOME-TAX REFUND UNDER ARTICLE 12(2) O F THE DTAA AND NOT GRANTING THE BENEFIT OF ARTICLE 9(4). 6. THE ASSESSEE RECEIVED INTEREST U/S 244A AMOUNTIN G TO ` 1.11 CRORE DURING THE YEAR IN QUESTION, WHICH WAS TREATE D AS INCOME FROM OPERATION OF SHIPS UNDER ARTICLE 9(4)(A) OF THE IND IA-DENMARK DTAA AND HENCE IMMUNE FROM TAXATION. THE ASSESSING OFFIC ER HELD SUCH AMOUNT TO BE FALLING UNDER ARTICLE 12(6) OF THE DTA A. THE LEARNED CIT(A) UPHELD THE ASSESSMENT ORDER ON THIS POINT. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THIS ISSU E HAS BEEN DECIDED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HAPAG LLOYD CONTAINER LINIE GMBH V. ADIT (IT) [(2011) 131 ITD 1 22 (MUM.)] BY HOLDING INTEREST ON INCOME TAX REFUND FALLING U NDER ARTICLE 11 OF THE DTAA BETWEEN INDIA AND GERMANY (SIMILAR TO ARTI CLE 12 OF INDIA AND DENMARK DTAA UNDER CONSIDERATION) LIABLE TO TAX . IT HAS BEEN ITA NO.7676 &7683/MUM/2010 M/S.A.P.MOLLER MAERSK A/S. 4 HELD IN THAT ORDER THAT SUCH INTEREST CANNOT BE CON SIDERED AS BUSINESS INCOME COVERED UNDER ARTICLE 8 OF DTAA BETWEEN INDI A AND GERMANY (SIMILAR TO ARTICLE 9(4) OF DTAA BETWEEN IN DIA AND DENMARK UNDER CONSIDERATION). IN VIEW OF THE AFORE- NOTED ORDER PASSED BY THE MUMBAI BENCH OF THE TRIBUNAL, WE UPHO LD THE IMPUGNED ORDER ON THIS ISSUE. 8. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED ON THIS 14 TH DAY OF DECEMBER, 2012. !$ 0 34* 5!)6 4 0 7 SD/- SD/- (AMIT SHUKLA) (R.S.SYAL) & ! & ! & ! & ! / JUDICIAL MEMBER ! ! ! ! / ACCOUNTANT MEMBER MUMBAI ; 5!) DATED : 14 TH DECEMBER, 2012. DEVDAS* !$ 0 -&#'8 98*# !$ 0 -&#'8 98*# !$ 0 -&#'8 98*# !$ 0 -&#'8 98*#/ COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. : () / THE CIT(A)-X, MUMBAI. 4. : / CIT 5. 8=7 -&#&) , , / DR, ITAT, MUMBAI 6. 7> ? / GUARD FILE. !$) !$) !$) !$) / BY ORDER, .8# -&# //TRUE COPY// @ @ @ @/ // /A / A / A / A / ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI