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2020 (4) TMI 452 - AT - Income TaxIncome accrued in India - PE in India - India-Mauritius DTAA - income from shipping activities under Sec. 44B - Assessment of assessee is an agent of M/s Arc Line, Mauritius, a company which was incorporated in Mauritius and was engaged in the activity of shipping in international traffic - A.O applying the provisions of Sec. 44B assessed the income of M/s Arc Line, Mauritius from its collections from shipping activities @ 7.5% - HELD THAT:- Tribunal while disposing off the quantum appeal of M/s Arc Line, Mauritius for the year under consideration i.e A.Y. 1998-99 [2018 (2) TMI 1524 - ITAT MUMBAI] had concluded viz. (i) that, the assessee i.e M/s Freight Connection India Pvt. ltd. being an agent of an independent status could not be considered as constituting an agency PE of the assessee; (ii) that, M/s Arc Line, Mauritius did not have any PE in India; and (iii) that, the income derived by M/s Arc Line, Mauritius from its shipping activities in the absence of any PE in India could not be brought to tax in India. On the basis of the aforesaid facts, we find ourselves to be in agreement with the claim of the ld. A.R that now when the assessee has been held as an agent of independent status, and the income of M/s Arc Line, Mauritius in the absence of any PE in India had been held as not taxable in India, therefore, there remains no basis for taxing the income of M/s Arc Line, Mauritius from its shipping activities under Sec. 44B of the Act in the hands of the assessee by treating it as a representative assessee of the aforesaid company. We thus ‘set aside’ the order of the CIT(A) and delete the addition made by the A.O in the hands of the assessee, vide his order passed under Sec. 143(3)/147 r.w.s 161 & 163 of the Act, dated 30.03.2001.
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