TMI Blog2008 (10) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... was carrying on the business of shipping in India through its agent M/s. Parekh Marine Agencies Pvt. Limited, Mumbai. In the year under consideration, the assessee declared gross receipts of ₹ 98,46,63,211/- from the business of shipping. The details filed before the Assessing Officer show that the receipts of ₹ 79,80,86,476/- represented the freight of cargo shipped through various ships operated by the assessee either as owner or as a charterer or as a lessee. The details of these figures appear at pages 1 and 2 of the assessment order. According to the Assessing Officer, the assessee was not able to file the details in respect of the remaining freight. However, the assessee vide letter dated 23.02.2004 had submitted before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osely connected with the direct operation of ships and therefore, not chargeable to tax in terms of Article 8 of Indo South Africa Treaty. Aggrieved by the same, the revenue is in appeal before the Tribunal. 3. At this stage, we may mention that the Assessing Officer had also assessed M/s. Parikh Marine Agencies Pvt. Ltd., on the same income considering the said company as agent of the non resident company. The CIT(A), in view of his order in the case of non-resident company, held that M/s. Parikh Marine Agencies Pvt. Ltd. could not be assessed as representative assessee. The revenue is in appeal against this order also. 4. The learned counsel for the assessee, at the outset, submitted before us that there are some factual errors in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Regarding the inland haulage charges also, it has been submitted that the issue is covered by the aforesaid decision. On the other hand, the learned Departmental Representative has relied on the order of the Assessing Officer. 5. Rival submissions of the parties have been considered. First we deal with the legal issues arising from these appeals. The first issue relates to receipts from transportation of cargo in the international traffic through feeder vessels with whom the assessee had slot charter arrangements. This identical issue had arisen before this Bench in the case of DDIT(IT) vs. Balaji Shipping (UK) Ltd., 117 TTJ 865 (Bom). In that case it was observed that the term operation of ships was not defined in the treaty and, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regarded as separate business or source of income. Paragraphs 5 onwards discuss about various activities to which paragraph 1 can be applied. Paragraph 6 covers the profits derived by an enterprise from the transportation of passengers/cargo otherwise than by ships that it operates in the international traffic to the extent such transportation is directly covered with the operation of ships in the international traffic by that enterprise. This covers a situation where the assessee is unable to transport the passengers/cargo from its own ship but transports the same through ships operated in international traffic operated by the other enterprises. This has been explained by giving an example also. According to this example, some of the pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feeder vessels with whom the assessee had slot chartering arrangements since it is established that the assessee is engaged in the business of operation of ships which is apparent from the fact that the Assessing Officer himself had allowed the benefits in respect of freight receipts to the extent of ₹ 79.8 crores. 6. As far as Indian haulage charge is concerned, the issue is directly covered by the decision of this Bench in the case of Safmarine Container Lines N.V. (24 SOT 211). In that case the assessee had declared freight receipts on account of inland transportation of the customer's cargo from Ludhiana to Indian Port which were to be transported by the ships in international traffic. Considering the OECD Commentary and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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