TMI Blog2016 (3) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... shipping business.The assessee did not own or charter or took on lease any vessel or ship for the year under consideration, it was only providing container services to its various clients. Therefore, we have no hesitation to hold that provisions of section 44B were not applicable to the facts of the case under consideration. Considering the above discussion,we hold that the income of the assessee was to liable to be taxed as business income and that in absence of PE no income was taxable in India, that the provisions of section 44B were wrongly invoked by the AO. Reversing the order of the FAA, we decide effective ground of appeal in favour of the assessee. - ITA No.1607/Mum/2014 - - - Dated:- 11-3-2016 - S/Sh. Rajendra,Accountant Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing a Non-Vessel Operating Common Carrier(NVOCC) it was not eligible for claiming exemption under Article 8 of DTAA.He further held that income of the assessee was arising out of operation of ships in International traffic,that income arising /accruing to it was taxable in India as per the provisions of section 5(2) of the Act, that the provisions of Section 44B of the Act were applicable for the income earned by the assessee during the year under consideration.He referred to various case laws and held that the assessee had entered into agency agreement with associated concerns regarding business from India, that there remained an element of continuity,that it had real and intimate connection,that the holding company secured the business f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a within the meaning of Article-5 of the DTAA, that the income of the assessee was taxable under Article-7 of the treaty,that income of the assessee was assessable in India as per the provisions of section 44B r.w.s 5(2) of the Act, that the section 44B dealt with computing with profits and gains of shipping business of non residents,that business income of the assessee arising in India was to be taxed @7.5% of gross receipts from shipping business. 3.Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA).Before him, it made elaborate submissions with regard to charge - ability of income u/s.44B of the Act, business connections, PE and control and, management as well as Agency-PE.Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ependent entity,that it would take its own decision at Singapore that HO had no role in deciding the policies of the assessee,.He referred to case of Radha Rani Investment (16SOT 495).With regard to chargeability of income,he stated that he had not claimed exemption under Article 8, that AO himself had held that assessee was in the business of non vessel operating activities,that assessee was not in operation of ships, that AO had wrongly applied section 44B.He also placed reliance on page No.96-126 of the PB and referred to the case of Oceaneering International GmbH(ITA 1023/Mum/2014-AY10-11-dt.6.11.2015) and Mitchell Drilling International(P)Ltd.(62Taxmann.com24).The Departmental Representative (DR) argued that place of management of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record any evidence to support their claim.On the other hand the assessee had proved that its books of accounts were maintained in Singaprore.Not only this,it was proved that it was maintaining a bank account in Singapore and all banking transactions were made from that account only.In our opinion,both the authorities were not able to establish that effective management and control of affairs of the company was in India.We have gone through the e-mails placed by the assessee at pg No.96 to 127 of the paper book which clearly prove that business activities were carried out by the Singapore office.In our opinion,factors like staying of one of the directors in India or holding of only one meeting during the year under consideration or the loc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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