9911796707
TMI Blog2012 (11) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2009-2010 for the freight beneficiary of M/s Balaji Shipping Lines, FZCO, UAE without paying freight tax. The AO for the sake of convenience and since the issue involved in the matter passed common order u/s 172(4) of the Act on 29.12.2010 in respect of entire Vovage return filed during the financial year 2009-10. In this order, the AO held that M/s Balaji Shipping Lines, FZCO, UAE having occasional business on port at Mundra and not engaged in regular business of shipping and hence, not eligible for benefit of Article 8 of Indo-UAEl Treaty. Further in this order the AO held that the Principal is not owned or chartered none of the vessel, therefore, the agent/freight beneficiary is not entitled to claim of DTAA benefit for the said ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port or a shipping. After considering their arguments, the ld. CIT(A), in the impugned order held that the order passed u/s 172(4) is null and void because the assessee is not engaged in occasional business is backed by its acting alternative clause provided under section 172 (7) of the Act, 1961. The relevant portion of the decision of the ld. CIT(A) as contained in paragraph 2.3 of the impugned order is as under: "2.3 I have perused the submission made by the appellant and am of the opinion that the appellant is in regular shipping business and not in occasional shipping business. I have considered the judgments cited. Once a person claims that it is not engaged in occasional shipping business and wants to go out of the ambit of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the vessels are neither owner nor chartered by BSL, the provisions of section 172(1) cannot apply to BSL on this ground alone. I have perused through the submission and documents submitted y the appellant. Once the AO says that the appellant is not owner/charter of the vessel, then he could not have taken recourse to section 172 itself as the section applied to owner/charter only. The subsection (1) reads as under : "172. (1) The provisions of this section shall, notwithstanding anything contained in the other provisions of this Act, apply for the purpose of the levy and recovery of tax in the case of any ship, belonging to or chartered by a non-resident, which carries passengers, livestock, mail or goods shipped at a port in India". Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. CIT(A) has further erred in law and on facts by ignoring the comprehensive DTAA between India and UAE i.e. article 4(1)(b) applicable to the companies incorporated in the UAE and managed and controlled wholly in UAE; 6. The ld. CIT(A) has further erred in law and on facts giving credence to the fact that the shareholders and directors are not UAE residents but are Indian national. 7. The ld. CIT(A) has further erred in law and on facts by ignoring the comprehensive DTAA between India and UAE in respect of Article 29 of Limitation of benefit. i.e. "an entity which is resident of a contracting state shall not be entitled to the benefit of this agreement if the main purpose of the creation of such entity was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 172 (4) of the Act are inapplicable to them. In this regard, he drew our attention to the finding recorded by the ld. CIT(A) at pages 9 and 10 of the of impugned order (which is reproduced by us hereinabove at pages 3 and 4 of this order) and submitted that the department has placed no material to rebut the findings of the ld. CIT(A) and merely relied on the findings of the Assessing Officer. However, the freight beneficiary of M/s Balaji Shipping Lines FZCO, UAE was regularly engaged in shipping business was apparent from the fact that the Principal is regularly engaged in the business of shipping, as observed by the ld. CIT(A) that the Principal is regularly filing its return of income at Mumbai. In support of this he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipping Lines FZCO, UAE has filed return of income for the assessment year 2010-11 with Dy. Director of Income Tax (International Taxation) Circle 1(1), Mumbai on 15.12.2010. The said case has already been under scrutiny of the regular assessing officer of M/s Balaji Shipping Lines FZCO, UAE. This clearly indicates that M/s Balaji Shipping Lines FZCO, UAE has accepted the liability to be dealt with the provisions of section 172(7) of the Act. The jurisdictional AO may, therefore, verify the position and take such action as may be warranted in law in terms of section 172(7) to ensure that the income of the assessee from the 86 voyages does not escape assessment as per normal provisions of the Act. 8. In view of the foregoing discussion, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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