9911796707
TMI Blog2013 (12) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order dated 30.12.2011 held that Indian subsidiary of the assessee company Bengal Tiger Line India Pvt. Ltd. is collecting freight charges and other fees on behalf of the assessee. As a result of the collection of freight charges and other fees the foreign company had business connection in India and the income is deemed to accrue in India in terms of section 9(1)(i) of the Act. However, the assessee has not filed any return of income for the assessment year 2003-04 despite the fact that it had income deemed to have accrued for the said assessment year. The Assessing Officer initiated proceedings to assess income of the assessee under the provisions of section 147 of the Act on the ground that since four years has lapsed and income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Chapter IV-D of the I.T. Act. (vi) The income belonging to the non-resident company is in the nature of freight charges. Hence, it is assessable u/s.44B of the Income Tax Act. 4. The assessee filed objections before the DRP against the draft assessment order. The primary objections raised by the assessee at the time of assessment and before DRP are as follows:- (i) There is no business connection as per section 9(1)(i) of the Act. (ii) There is no permanent establishment in India. (iii) Provisions of section 172 of the Act are not applicable in the case of the assessee. (iv) The income of the assessee is ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect to income from shipping business. In both the cases, the Hon'ble Gujarat High Court has held that the income from business is not taxable in India in view of the provisions contained in DTAA and that the Assessing Officer has no jurisdiction to levy tax on the petitioner companies. 6. On the other hand, Mr. Shaji P. Jacob appearing on behalf of the Revenue submitted that the directions of DRP are well reasoned. The assessment order has been passed as per the directions of the DRP. The assessee is having permanent establishment in India and as such Article 7 of the DTAA is applicable in the case of the assessee. 7. We have heard the submissions made by both the parties. We have perused the order of the Assessing Officer and the dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and UK has held that the ITO had no authority or jurisdiction to levy tax on the petitioner company. The DTAA between India and UK have similar provisions i.e. Article regarding taxation of enterprise having shipping business. The Hon'ble Gujarat High Court in the case of Venkatesh Karrier Ltd. (supra) has reiterated the same view and held that the agreement between two countries has ousted the jurisdiction of the taxing officer in India to tax the profits derived by the enterprise once it is found that the ship belongs to a resident of the other contracting country and such position has also been clarified by the circulars issued by the Board. The Hon'ble Gujarat High Court referred to Circular Nos.333 dated 2.2.1982 and 732 dated 20th D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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