TMI Blog1997 (1) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 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 the Double Taxation Avoidance Agreement 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 arguments on this issue. On the other hand, Shri Dastur, learned counsel for the assessee, has contended that the case of the Department was that article 9 of the Double Taxation Avoidance Agreement 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 non-resident would be liable to be taxed in the U. K. i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanged . This means that the decision already arrived at by the Tribunal would remain the same. Under the aforesaid circumstances, I cannot subscribe to the view that the order of the Tribunal be recalled for a hearing de novo. 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 Avoidance Agreement between India and the 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 miscellaneous application filed by the Department is misconceived and devoid 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for the provision of ship on hire and accordingly it had entered into a charter party agreement with Drake Maritime S. A., London, for hire of a ship M. V. Pelican with effect from December 7, 1992. The assessee filed the agreement and various correspondence with MDL, as also the Director-General of Shipping before the Assessing Officer and further stated that MDL required the anchor handling tug for towing 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 the 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 offshore 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). The matter was, thus, taken in appeal before the learned Commissioner of Income-tax (Appeals), who on a consideration of relevant facts and circumstances as also keeping in view the provisions of the Double Taxation Avoidance Agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Indian taxation and, therefore, the question of TDS thereon did not arise. The Department filed this miscellaneous application and prayed that order of the Tribunal may be recalled, as no opportunity has been accorded to the Department to argue that the ship in question was not a ship and according to the Revenue this is very vital for deciding the appeal and as such the Department should have been given reasonable opportunity to meet the arguments as advanced. The case of the Department in brief 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 the 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 Double Taxation Avoidance Agreement and if article 9 applied, article 7 could not apply. The Tribunal heard the misce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department itself as per order dated February 8, 1996, passed by the learned Commissioner of Income-tax, Delhi-I, New Delhi, in the case of the non-resident, i.e., Drake Maritime S. A., under section 263 of the Income-tax Act accepting the assessment order passed by the Assessing Officer on the basis of order of the Tribunal which is sought to be rectified. This apart, I am of the view that the order of the Tribunal contains no mistake apparent from record, as is sought to be rectified by way of this miscellaneous application, the finding of the Tribunal neither being incorrect nor contrary to the facts on record. The order of the Tribunal is based on appreciation 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 the applicability of article 7 of the Double Taxation Avoidance Agreement dealing with business income and having looked into the other provisions of the Double Taxation Avoidance Agreement, the Tribunal recorded a finding of fact that the hire charges are not taxable since the facts of the case entirely come with the purview of the article 7 of the Double T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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