TMI Blog2017 (3) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... lace of effective management is situated i.e. in this case Denmark. Therefore, in view of the above discussion and considering Article-9 of the Treaty between India and Denmark and also the decision taken by the Department in earlier cases of the assessee, we hold that the ships operated in International Traffic and therefore, the income from ship shall not be taxed in India as per Article 9 of the Treaty. Therefore, on account of foregoing observation, appeal of the assessee/appellant is allowed. - I.T.A. No.313-517/Rjt /2013, I.T.A. No.658, 659, 660, 661/Rjt /2012, I.T.A. No.499/Rjt /2014 - - - Dated:- 20-3-2017 - Shri Pradip Kumar Kedia, Accountant Member And Shri Mahavir Prasad, Judicial Member Assessee : Shri Ankit Gokani, A.R. Revenue : Shri Pravin Kumar, Sr. D.R. ORDER Per Shri Mahavir Prasad, Judicial Member Out of these seven connecting appeals, five appeals have been filed by the assessee and remaining two have been filed by the Revenue against the order of the Commissioner of Income Tax(Appeals)- Gandhinagar, dated 15/05/2013 for the Assessment Years (AY) 2011-12, 08/10/2012 for the A.Y. 2010-11, 23/10/2013 for the A.Y. 2012-13 03/06/2014 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onvenience and issue involved in the matter are in similar nature, hence, the entire voyage returns filed during the F.Y. 2010-11 relevant to AY 2011-12 are concluding and passing single order u/s. 172(4) of the Act. 4. The principal did not have regular business in the Port of Porbandhar only occasional business is doing as and when it got business. The returns filed by the agent/assessee had submitted copies of Master Certificate issued signed by the each master of the vessel. 5. The details of ship loaded by the principal beneficiary in the port of Porbandhar India are as Schedule -1 as under:- Sr.No. Name of the Vessel with date of arrival Final return filed date Name of the port Freight amount in Indian Rs. DTAA claimed 01 M.V. Queen Arrow-1 Dt. 26.01.2011 02.02.2011 Porbandhar 2752344 87174 02. M. V. Queen Arrow - 11.02.2011 1 17.02.2011 Porbandhar 277 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity for this particulars voyage vessels. VI) Please furnish correct copy of income tax return for Year 2008 to 2011 filed by the principal beneficiary of M/s. Faber shipbroker APS Denmark before the competent authority in Denmark As per Article-3 (h) of the DTAA agreement. VII) Please state, whether principal beneficiary of M/s. Faber shipbroker APS Denmark had filed income-tax return in India, if yes, please furnish copy of acknowledgement of return filed for AY 2007-08 to 2010-11 and state if any scrutiny assessment was carried out on this income, please furnish copy of the order u/s. 143(3) of the Act for AY 2007-08 to 2009-10. VIII) Please furnish freight beneficiary bank account for the period from 01.01.2011 to 30.04.2011 and also highlight the freight amount to US$ 60960 US$ 61380 remitted on this account. IX) Please furnish voyage charter party agreement along with rider clause executed between owner of M/s. Shipbroker APS Denmark charter M/s. CIT-Group Inc. Jordhan. X) Please furnish vessel registration certificate. XI) In order to verify the freight account of the principal of the vessel, you are requested to submit the following de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r freight. Therefore, it is liable to tax in Denmark. The copy of tax residency certificate is attached herewith. vi. No freight was received from India. The copy of fixture note and agreement stating the bank details is attached herewith. vii. Fixture note is the abridged legal format of charter party contemplated and legally recognized internationality evidencing the sailent data of charter party terms and conditions. The copy of fixture is attached herewith for your perusal. viii. Copy of the vessel registration certificate is attached herewith. ix. No payment is made by the Indian agent from his bank account to freight beneficiary. 8. As per Ld. AO, there were various factors involved in this case, such as agent/assessee had not submitted complete details called by the AO except the copy of vessels registration certificate and some more information ought to have been filed by the assessee. Hence, Ld. AO was not satisfied with the contention of the assessee. 9. As per AO, Assessee has claimed DTAA benefit with incriminating and forged documents. The action of the local agent has itself proved the same beyond doubt. Under the circumstance and narration and evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Denmark entity is situated in Denmark as registration certificate residence of shareholder passport of owner All shows that Faber Ship Broker is resident of Denmark and its POEM is in Denmark. Therefore head and brain of Faber Ship Broker is situated in Denmark. Reliance placed on Radha Rani Holdings Pvt. Ltd.(110 TTJ 920) Saraswati Holding Corp. Int. Vs. DDIT (16 SOT 535) (D) De Beers Cons. Mines Ltd. (1906 AC 455) (HL) Arabian Express Line Ltd. (212 ITR 31) 17. It is noteworthy that in that case of same assessee and on identical facts CIT(A) has allowed the benefit of DTAA to the assessee (Page No.53 to 84). However revenue has filed appeal against those orders in ITA No. 499/RJT/2014 and 517/RJT/2014. 18. Ld. CIT (A) has raised contention that Income of CTI Group Inc. Jordan is chargeable to tax is erroneous as it has neither an income accrued and arised u/s.5(2) read with section 9(1)(i) of the Income Tax Act. Therefore, nothing is chargeable to tax in the hands of Jordan Co. In fact, freight is received by Faber Shipbrokers Denmark. So it is Faber who is responsible for paying tax in India as per section 5(2) of the Income Tax Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72 of the Act in the hands of the appellant and Ld. CIT(A) also erred in confirming the same. ii. Ld. AO and Ld CIT(A) has erred in law as well as on facts in not accepting the contention of the appellant that M/s. Faber Shipbroker APS, Denmark, is only disponent owner of the vessel who is the actual Beneficiary of receipt of Freight and responsible for the entire taxation burden and payment of tax in Denmark. iii. Ld. AO and Ld. CIT(A) has erred in law as well as on facts in stating that the payment received by the claimed disponent owner Faber Ship Broker of Denmark, would be in nature of hiring payment for charter and not freight for carrying goods. iv. Ld. AO has erred in law as well as on facts in stating that M/s. CTI Group Inc., Jordan has chartered the ship as per the documents filled has transported goods has earned freight and Ld. CIT(A) also erred in confirming the same. v. The Ld. AO and Ld. CIT(A) has erred in law in taxing income in India ignoring the fact that there is DTAA with Denmark i.e. country to which freight beneficiary belongs. Article 4 and particularly Article 9 of DTAA clearly mention that the income from shipping business is tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals; wherein factually, the predecessor had dismissed the earlier appeal of the assessee vide Appeal No. CIT(A)/GNR/99 101/Intl.taxn./2010-11 dtd. 02/07/2012. viii. The Ld. CIT(A) has erred in law and on facts in deciding the appeals without calling upon various documents as mentioned in statement of facts enclosed. ix. the Ld. CIT(A) has erred in law and on facts that judicial analysis supported by recent decision of Hon ble Delhi Bench Tribunal in the case of SMR Investment Ld., Vs. Dy. DIT [2010] 12 ITAT India 866 wherein it was held that merely Tax Residency Certificate is not enough to conclude the residential status. x. On the facts and circumstances of the case Ld. CIT(A) may ought to have upheld the order of the AO. xi. It is therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer be restored to the above extent.awaw 24. Department/revenue has taken following Grounds of Appeal in ITA No. 499/Rjt/2014 for the A.Y.2013-14. i. The Ld. CIT(A) has erred in law and on facts by holdings that the actual freight beneficiary of the vessel is M/s. Faber Shipbroker APS-Denmark instead of freight received ..... 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