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TMI Blog2002 (6) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... is correct in law in holding that payment is made to the non-resident by the assessee in India? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the receipt in the form of 85 per cent. of the catch of fish by the non-resident was in India since all the formalities are completed in India? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in rejecting the claim that there is no payment to the non-resident by the assessee but there was only a receipt of 15 per cent. of the value of fish catch from the non-resident to the assessee? 4. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncement of fishing operations. Under various clauses, the modalities for payment of the fee including fuel cost, maintenance, repairs, etc., and also the characteristic of the contract and the annual charter fee and the annual fee payable by way of 85 per cent. of gross earnings from the sale of fish subject to the further condition that catch of the fish would be accrued to the charterer, are provided under the agreement. The assessing authority held that the assessee made the payment to the non-resident within the meaning of section 195 of the Income-tax Act and was liable to deduct tax at source therefrom and that failure to do so made the assessee liable to deposit the amount to the credit of the Government of India and pay interest fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source. As per the agreement dated March 7, 1990, 85 per cent. of the catch has to be paid to the East Wide Shipping Company (HK) Ltd., towards hire charges from out of the catch and the assessee only gets 15 per cent. from the catch. As the operations of the fishing vessels were in the Economic Zone beyond 12 nautical miles from the sea shore, i.e., outside India, the Departmental appellate authority agreed with the submission made on behalf of the assessee that no income to the nonresident had accrued or arisen in India in the light of the decision of the Supreme Court in Performing Right Society Ltd. v. CIT [1977] 106 ITR 11. The Tribunal held that in view of the decision of the Supreme Court in Raghava Reddy v. CIT [1962] 44 ITR 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see to pay interest for failure thereof under section 201(1A) of the Act and dismissed the appeals affirming the order made by the Commissioner of Income-tax (Appeals). The assessee sought a reference on questions of law for the opinion of this court and thus this reference is at the instance of the assessee for the opinion of this court on the questions of law formulated by the Tribunal. We have heard Sri Krishna Koundinya, learned counsel appearing on behalf of the assessee and Sri J.V. Prasad, learned counsel appearing on behalf of the Revenue. Efforts are made by learned counsel for the assessee to convince us that there was no income chargeable which resulted to the non-resident and there was no payment of any sum by the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only a receipt or 15 per cent. of the value of fish catch from the non-resident to the assessee; On the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the assessee is liable to deduct tax at source under section 195 of the Act on the alleged payment made to the non-resident towards hire charges even though the alleged payment is not in cash; and On the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the assessee was in default under section 201 of the Income-tax Act, 1961, for the failure to deduct tax under section 195 of the Income-tax Act. The reference is accordingly answered in favour of the Revenue and against the assessee. Since the R.C. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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