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2018 (3) TMI 1832 - AT - Income TaxTaxation u/s 44B - income from operation of ships - Receipts from Inland Haulage Charges and service tax collected thereon - Freight charges received from transportation of cargo through feeder vessels to mother vessels - India-France DTAA - HELD THAT:- Inland Haulage Charges received by the assessee shall form part of income from operation of ships in international traffic and accordingly Article 9 of India-France DTAA shall apply to it. Accordingly we uphold the order passed by Ld DRP in AY 2012-13 on this issue and reverse the orders passed by it on this issue in AY 2013-14 and 2014-15. Taxability of freight charges received for transportation of Cargo through feeder vessels from Indian ports to the mother vessel standing in foreign ports/hub ports - In the case of Balaji Shipping UK Limited [2012 (8) TMI 681 - BOMBAY HIGH COURT] held that where the goods are transported by an enterprise by availing of the slot hire facility obtained by it on the ship of another from a port in India up to a hub port abroad and from there transporting the goods further to their final destination upon a ship owned or chartered or otherwise controlled by it, would be covered by Article 9(1) of India-UK DTAA. Since the India-France DTAA is similar thereto, the Hon’ble High Court held that the decision rendered in the case of Balaji Shipping UK Limited (supra) would apply to the assessee also. 25. Accordingly, by following the decision rendered by Hon’ble Bombay High Court in the assessee’s own case (referred supra), we hold that the freight charges received for transportation of Cargo through feeder vessels is part of shipping income eligible for relief under Article 9(1) of India-France DTAA Inclusion of Service tax as part of Gross receipts - This issue is covered in favour of the assessee by the decision rendered by Hon’ble Delhi High Court in the case of Mitchell Drilling International (P) Ltd [2015 (10) TMI 259 - DELHI HIGH COURT] . We have noticed that the Ld DRP has considered the decision rendered by Hon’ble Uttarakhand High Court in the case of CIT Vs. Halliburton Offshore Services [2007 (9) TMI 230 - UTTARAKHAND HIGH COURT] . It is settled principle of law that in case of divergent views expressed by non-jurisdictional High Courts, the view in favour of the assessee should be taken. Accordingly the assessee was justified in placing reliance on the decision rendered by Hon’ble Delhi High Court in the case of Mitchell Drilling International (P) Ltd (supra)
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