TMI Blog1997 (2) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... des that income of an enterprise or a contracting State from the operation of ships in international traffic shall be taxable only in that State. According to the Departmental Representative, the assessee's case, therefore, was that the ship in question was a 'ship'. This issue, whether the ship in question was a 'ship' or not within the meaning of article 9 of DTA, was never raised either by the assessee or by the department. The Tribunal has made out a totally new case, which is not permissible in law. It is further submitted that the finding recorded by the Tribunal that the ship in question was not a 'ship' is very vital for deciding the department's appeal and that the department should have been given reasonable opportunity to advance the argument on this issue. 2. On the other hand, Shri Dastur, the learned counsel for the assessee has contended that the case of the Department was that article 9 of the DTA was inapplicable on the facts and in the circumstances of the case, which plea has been accepted by the Tribunal though on a different process of reasoning. The Tribunal has dismissed the Department's appeal by accepting the submission that the hire charges paid to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same. 6. Under the aforesaid circumstances, I cannot subscribe to the view that the order of the Tribunal be recalled for a hearing de novo. 7. Further I am of the view that there is no mistake apparent from the record within the meaning of section 254(2) and even if the observations of the Tribunal referred to by the Department in the miscellaneous application are deleted from the order there would be no change in the conclusion and decision already arrived at. There are various other grounds with reference to the relevant provisions of the law as also relevant articles of the Double Taxation Agreement between India and U.K which have been invoked by the Tribunal in taking the view that the hire charges are not subject to tax in India and, therefore, the question of deducting tax at source does not arise. In the final analysis, I hold that the misc. application filed by the Department is misconceived and de-void of merit and alternatively even if the same were to be accepted it would not lead to any change in the ultimate conclusion already arrived at by the Tribunal. In other words the recall of the order of the Tribunal is not at all justified as is the view expressed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and various correspondence with MDL, as also Director General of Shipping before the Assessing Officer and further stated that MDL required the Anchor Handling Tug for toeing of off-shore services, as, detailed in the Charter Party Agreement. It was claimed that as per technical specification the ship, i.e., Pelican as supplied by N.R. is not a ship meant for passenger or cargo or a trailor vessel and could be used only to assist in the construction of off-shore platform for oil exploration/ extraction, as stipulated in the agreement and as such resulted in business income for the Non-Resident. The Assessing Officer however, did not accept the submissions of the assessee leading to his order under section 195(2). 3. The matter was, thus, taken in appeal before the learned CIT (Appeals), who on a consideration of relevant facts and circumstances as also keeping in view the provisions of Double Taxation Avoidance Agreement (for Short DTA) with U.K came to the conclusion that the place of the contract being at U.K the hire charges were exempt under Article 9 of the DTA with U.K. He also concluded that the Assessing Officer was wrong in holding that the assessee was not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f is: (a) that the finding of the Tribunal that the vessel was not a 'Ship' but a specially designed vessel assisting in the construction of off-shore platform used for exploration of mineral oil is a new case made out by the Tribunal on its own and the department was not given necessary opportunity to meet this case; (b) the finding of the Tribunal that vessel was not a ship was very vital to decide the appeal entitling the department to make specific submissions; and (c) if the vessel was a "Ship", then the rental charges would not be exempt under Article 9 of the DTA and if Article 9 applied, Article 7 could not apply. 6. The Tribunal heard the Misc. Application of the Revenue and while the ld. Judicial Member took the view that the order dated 30-9-1994 of the Tribunal required to be recalled, the learned Accountant Member took the view that there is no mistake apparent from record within the meaning of section 254(2) and even if the observations of the Tribunal, referred to by the department in the Misc. Application, are deleted from the order there would be no change in the conclusion and decision already arrived at, since by looking into various articles of DTA and applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of facts and evidence on record, including the paper book submitted and submissions made. The Tribunal has also referred to arguments of both the parties regarding applicability of Article 7 of DTA dealing with business income and having looked into other provisions of the DTA, the Tribunal recorded a finding of fact that the hire charges are not taxable since facts of the case entirely come within the purview of Article 7 of DTA. Further, as the Tribunal accepted the department's contention regarding non-applicability of Article 9 of the DTA, the Department cannot have any grievance on this count, as is made out in the Misc. Application. There is no challenge to the correctness of the finding that the vessel in question was not a ship in the normal sense but was a specialised item of machinery assisting in the construction of off shore platform for oil exploration and extraction. Therefore, even if the claim of the Revenue were to be accepted it would not lead to any change in the conclusion arrived at by the Tribunal. Therefore, I am of the view that in this Miscellaneous Application what the Department seeks is a review on merits of Tribunal's decision, which is not within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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