TMI Blog2015 (5) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the instant case. The provisions of Section 9 Income Tax Act were applicable and the provisions of DTAA, if more beneficial than the I.T. Act, the provisions of DTAA would prevail. Thus, in the instant case also, it is not possible for the revenue to unilaterally decide contrary to the provisions of the DTAA. We are informed that the agreements inter parties had been performed and the payments were made by the agents to use Maersk Net for the Maersk group's global shipping business and for no other reason. It related to shipment of cargo and their movement across the oceans. The views of the revenue that it amounted to technical service is misconceived. Repayment of money may be construed as “reimbursement” only if it is bereft of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income Tax held that A.P. Moller Maersk A/S being the managing owner, the income from the shipping business would be taxed in the hands of the two shipping companies referred to above. Pursuant to the directions of the Commissioner, the Assessing Officer assessed the income in the hands of the assessee which was allowed benefit of Double Taxation Avoidance Agreement (DTAA) between India and Netherlands. It was observed that the assessee had three agents working for them viz. Maersk Logistics India Limited (MLIL), Maersk India Private Limited (MIPL) and Safmarine India (Pvt) Limited (SIPL). These agents would book cargo and act as clearing agents for the assessee. In order to held them in this business, the assessee had procured and mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility which consisted of a communication system connected to a main frame and other computer services in each of the countries of operation. These were all connected to what is known as MaerskNet Connecting Point (MCP) which were installed in each of the premises. This communication network would enable the agent concerned to access via the MCP, the following services : Global Customer Service System (GCSS); Global Schedule Information System (GSIS); Global Transportation Systems such as Customer Information and Cargo Tracking (Star Track), Transportation Schedule and Service Guide; Maersk Product Catalogue (MEPC) Maersk Shared Knowledge System (MSKS) EDI Data Quality Enhancement and Electronic Data Interchange; Sys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendering of services which would be the requirement of Article 13(4). 7. Mr.Kaka further submitted that the facility known as MaerskNet was located in Denmark where the assessee was a tax resident and the system was very much a part of an integral part of the shipping business and, therefore, the income received by the assessee from the agents did in fact, amount to income from the shipping business of the assessee and, therefore, not chargeable to tax in India. 8. Mr. Tejveer Singh on the other hand submitted that the agent were using devices provided by the assessee which would amount to the assessee rendering technical services, the consideration for which would be correctly termed as fees for technical services and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harging freight for picking up goods from places within India and delivering them at the destination port. This collection of Inland Haulage charges which the customers would pay was in respect of the transportation charges of the goods from the inland container depots to the port where the goods will be loaded on to the ships for international destination. The Assessing Officer in that case held that Inland Haulage Charges were not within the purview of Section 44B of the Act and, therefore, were chargeable to tax under the provisions of the Act. The Commissioner (Appeals) held that inland haulage charges earned by the assessee were only part of the income derived from the operation of ships and, therefore, were covered under Article 8 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I.T. Act, the provisions of DTAA would prevail. Thus, in the instant case also, it is not possible for the revenue to unilaterally decide contrary to the provisions of the DTAA. We are informed that the agreements inter parties had been performed and the payments were made by the agents to use Maersk Net for the Maersk group's global shipping business and for no other reason. It related to shipment of cargo and their movement across the oceans. The views of the revenue that it amounted to technical service is misconceived. In fact, the Assessing Officer relied upon the decision of M/s. Arthur Anderson Co. in ITA No.9125/Mum/1995, Mumbai, 'D' bench in which the Tribunal had observed that repayment of money may be construed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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