TMI Blog2017 (10) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... note was submitted. Without commenting upon the evidentiary value of the documents produced by it, for claiming exemption from tax provisions of the Act, we would like to mention that it had not produced not even a single paper for nine ships that could prove that same were operating in international traffic. Before us also, the assessee had not produced any document to substantiate its claim. So as far as income from nine ships are concerned, we arc of the opinion that same should be taxed as per the provisions of Act. - Decided against assessee. Charging of interest u/s.234B - Held that:- DRP should have decided the issue raised by the assessee by a speaking order. But, that does not mean that we cannot decide it. It is a legal issue and has remained unadjudicated. It was brought to our notice that the Department had issued Double income Tax Relief Certificate to the assessee. Clearly the assessee was not liable to pay advance tax. Besides for freight income earned by it was liable for deduction of tax at source as per the provisions of section 209(1)(d) of the Act. - ITA /2124, 1928/Mum/2014, CO. No. 117/Mum/2014 - - - Dated:- 11-10-2017 - Shri Rajendra, Accountant Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the claim made by it for exemption. He observed that benefit under Article -8 was only available to an enterprise that was operating the ships, that the onus to prove the income from particular ship shown by the assessee was in respect of shipping was on the assessee , that the assessee had failed to substantiate its claim for 15 ships. The AO directed the assessee to explain as to why the relief claimed under DTAA for 15 ships should not be rejected and that income should not be estimated as per Rule-10 of the Income tax rules, 1962 (Rules). After considering the submission of the assessee, the AO held that the assessee had an exclusive agent and front office in the form of M/s. APL (India) Pvt Ltd. (APL).that the case of the assessee was covered by Article-5(T) of the DTAA, that its business was carried out through a fixed place through its agent/front office in India. Finally he held that assessee was having a PE in India in the form of its agent/front office. 3.1 Aggrieved by the draft assessment order of AO the assessee filed objections before the DRP-1, Mumbai and relied upon certain case laws. After considering the available material, the DRP held that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 ships was taxable or not in India in light of the above-mentioned provisions of the DTAA or not. We find that the assessee was a tax resident of Singapore, that it was engaged in the operation of ships in international traffic, that it had claimed that income earned by it during the year under appeal from the operations of ships was not taxable as per Article 8 of the tax Treaty, that it had operated 137 ships for its business for the year under consideration, that the AO and the DRP had held that income earned by it from operation of 15 ships was to be taxed in India as it had not filed requisite details that the AO had directed the assessee to furnish copies of ship Registration Certificate copies of Charter Party agreements and Pooling agreements. etc. for all the ships(137),that it had filed requisite documentary evidences for 122 ships only, that the AO had given a categorical finding of fact that it did not produce documents for 15 ships that he taxed the aggregate freight of ₹ 19. 9 crores @ 7.5% as per section 44B of the Act, that during the proceedings, before the DRP it had filed copies of bills of lading in respect of five ships and the copy of delivery note of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the assessee to prove the factum of operation of ship for deduction. We have taken note of the fact that it had not produced any of the documents before the AO required by him. Even before the DRP it filed bills of lading for five ships. In case of one ship only copy of delivery note was submitted. Without commenting upon the evidentiary value of the documents produced by it, for claiming exemption from tax provisions of the Act, we. would like to mention that it had not produced not even a single paper for nine ships that could prove that same were operating in international traffic. Before us also, the assessee had not produced any document to substantiate its claim. So as far as income from nine ships are concerned, we arc of the opinion that same should be taxed as per the provisions of Act. For remaining six ships as stated earlier, the assessee had filed some documents. We find that while adjudicating the appeal for the AY. 2008-09(ITA/ 4435/Mum/ 2013),the Tribunal had dealt the identical issue as under: 2. The brief fact and background of the case are that the assessee is a non-resident company incorporated under the laws of Singapore and is also a tax-resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 22,98,870/- in the following manner :- xxxxx 4. Against the said order, assessee preferred an appeal before the ld. C1T(A) whereby the ld. CIT(A) has enhanced the income, firstly, by holding that benefit of Article 8 cannot be .' f in respect of total freight of ₹ 9 8.67 crores on the ground that there is no linkage between the feeder vessel and mother vessel for transportation qf cargo as they have been transported through third party under Charter Party agreement. and; secondly, she proceeded to deny the entire exemption/benefit of Article 8 by holding that the entire freight of ₹ 1106.89 crores is to be assessed in India by invoking the limitation clause of Article 24 of India-Singapore DTAA. Now, against the first appellate order assessee has raised various grounds and also various contentions which we shall discuss hereinafter 5. To put it succinctly, out of total freight receipts of Rs.l 106.89 crores from 136 ships, the Assessing Officer has given the benefit of Article. 8 in respect of 128 ships for total freight of Rs.l I04.58 crores and held that the same is not taxable in India. For the balance 8 ships, for total freight of Rs.l.29 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystems (India) (P) Ltd (103 TTJ 103).We arc reproducing the relevant portion of Use order of the Tribunal in the case of Sufamarine Container Line (supra).which reads as under: This appeal by the Revenue is directed against the order passed by the CITYA) on i 1th Feb., 2005 in relation to the asst. yr. 2001-02. Following ground has been raised in this appeal: xxxxx (ii) The inland haulage charges are taxable in India as business profits as these are not covered by s. 44B of the Act. 6. We have heard the rival submissions and perused the relevant material on record. First pain! raised by the learned Authorised Representative is that s. 443 includes IHC also and by implication, such income is covered under art. 8 and hence not taxable in India due to the tax residency certificate issued by Belgium. In order to appreciate this contention, it would be relevant to refer to the language of s. 44B. It is a special provision enshrined for computing the profits and gains of shipping business in the case of non-residents. Subs. (1) provides that notwithstanding anything to the contrary contained in ss. 28 to 43A, an assessee being a non resident. engaged in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of similar nature . So, any amount has to be considered, which is similar to or closely resembles with the nature of demurrage or handling charges. Handling charges are the charges paid for loading/unloading-'stacking, etc., of the containers and the demurrage charges are in nature of penalty for non-removal of the cargo in time. On the contrary, the IHC are towards transporting the goods from the exporter place to the port. The very nature of inland transportation charges clearly differentiates it from handling or demurrage charges, which are of a different genus. We therefore, do not find any substance in this submission made on behalf of the assessee that IHC are covered under s. 448 as these are equal to or part and parcel of the amount or account if carriage of goods .shipped at any port in or outside India. and hence are automatically covered under art. 8. This contention is therefore, repelled. 9. Sec. 90(2) gives an option to an assessee to whom DTAA applies either to be governed by the regular provisions of the IT Act, 1961 or take resort to DTAA. The option is with the assessee to be ruled by either of the two which is more beneficial to it. In the ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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