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TMI Blog2022 (11) TMI 1554X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Commissioner of Income tax, (International Taxation) 4(3)(1), Mumbai, (AO) (received by the Appellant on 12 July 2022) under section 143(3) rw.s. 144C(13) of the Income-tax Act. 1961 (the Act) in pursuance of the directions issued by the Dispute Resolution Panel-1 (D.RP'), Mumbai on the following grounds: On the facts and in the circumstances of the case and in law, the AO, based on the directions of DRP has: General 1. erred in assessing the total income of the Appellant at INR 26,61,890/- as against NIL returned income; Taxability of Inland Haulage Charges (IHC) of INR 26,61,890/- 2. erred in holding that 7.5% of IHC of INR 3,54,91,836/- is income taxable in the hands of the Appellant and accordingly brought to tax @ 40% of taxable receipt; 3. erred in making an addition on account of IHC by denying the benefit of Article 8 of India - UAE Double Taxation Avoidance Agreement ('India- UAE DTAA') since IHC is directly connected to and ancillary to the transportation of cargo in international traffic; 4. the learned AO has erred in not following the binding decision of jurisdictional Bombay High Court (HC) in the case of Safmarine Container Lines N.V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature and does not require any specific adjudication. 4. The Ground No.2-4 raised by the assessee is with regard to taxability of Inland Haulage Charges (IHC) of Rs. 26,61,890/-. 4.1. We have heard rival submissions and perused the materials available on record. The assessee, United Arab Shipping Company. ('UASC SAG') is a foreign company. It was a tax resident of Kuwait upto 31.12.2017. Subsequently, due to shift in registered office of the assessee from Kuwait to Dubai, the assessee became a tax resident of United Arab Emirates. It is engaged in the business of operation of ships in International Traffic (the 'Shipping Business') and it has derived income from the shipping business which inter alia includes freight, detention, demurrage, terminal handling charges etc. During the year under consideration the assessee has earned an aggregate income of Rs. 4,30,83,35,443/- from shipping business in India, which is claimed exempt from taxation under Article 8 of the India-U.A.E DTAA. It includes Inland Haulage Charges aggregating to Rs. 3,54,91,836/-. The ld. AO has issued the draft assessment order dated 22.09.2021 u/s 144C(1) of the of the Act, and proposed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y emerges from the decision that the issue whether IHC is taxable in India as per Article 8 of India-UAE Double Taxation Avoidance Agreement (India- UAE DTAA) has not yet attained finality. 5.4.2 We may observe here that the process before the DRP is a continuation of assessment proceeding as it is only the draft assessment order which is being challenged before it. The final assessment order is yet to be passed by the assessing officer. This view is fortified by the decision of the division bench of the Hon'ble High Court of Bombay in the Writ Petition No. 1877 of 2013 in the case of Vodafone India Services Pvt. Ltd. vs. Additional Commissioner of Income Tax & Ors. (2014) 264 CTR 0030 (Bom): (2013) 96 DTR 0193 (Bom): (2014) 361 ITR 0531 (Bom): (2014) 221 Taxman 0166 (Bom), wherein it is held that: "47. However as no final assessment order has yet been passed by the Assessing officer and the issues are still at large before the DRP the same could be urged before the DRP....................................................... The process before the DRP is a continuation of the assessment proceedings as only thereafter would a final appealable assessment order be passed. Til ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Jurisdictional High Court is not in dispute before us. Hence, respectfully following the decision of the Hon'ble Jurisdictional High Court, the ground Nos. 2-4 raised by the assessee are allowed. 5. The ground Nos.5 and 6 raised by the assessee become academic in nature as it has already been held that income itself is exempt under Article 8 of the India UAE DTAA. Hence, they are allowed. 6. The ground Nos.7 to 9 raised by the assessee are with regard to short grant of TDS credit of Rs. 8,68,889/- appearing in form 26AS of United Arab Shipping Company (UASC SAG) and United Arab Shipping Agency Company India Pvt. Ltd., (UASE India). 6.1. We have heard rival submissions and perused the materials available on record. There was a short grant of TDS credit to the assessee in the draft assessment order passed by the ld. AO, which was objected to by the assessee before the ld. DRP. The assessee made the following submissions before the ld. DRP:- 7.1.1. The assessee has an application for admission of additional evidence under Rule 4(3)(b) of the Income-tax(Disputes Resolution Panel) Rules 2009, on 30.12.2021 wherein the assessee has submitted that United Arab Shipping Age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Taxation in ITA No.972/Mum/2021 for A.Y.2017-18 dated 31/01/2022 wherein this issue was restored to the ld. AO by observing as under:- 23. Coming to ground number 8 - 11 wherein the claim of the assessee is with respect of tax credit of Rs. 2,506,606 which was directed by the learned dispute resolution panel to the learned assessing officer to verify the submission and then allow the TDS credit where legitimately due to the assessee. This ground was identical to ground number 8 in ITA number 5898/2019 for assessment year 2016-17 dated 31/1/2020 in assessee's own case wherein as per paragraph number 16 as Under:- "16. We find that the assessee has also assailed before asked the failure on the part of the AO grant credit for TDS of Rs. 6,006,811/- for the reason, that the same was wrongly deposited in the PAN number of the agent of the assessee. It was submitted by the learned AR that the AO while concluding as hereinabove had overlooked the fact that the agent had not taken the credit for the said amount. We find that the aforesaid claim of the assessee would require verification of facts as they had been stated by the assessee before us. Accordingly, we restore the matter to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute Resolution Panel directed the learned Assessing Officer to carry out the necessary verification and to grant credit. The assessee was also directed to submit all relevant details and clarification thereon. But AO did not consider and carry out such directions. 25. As the issue identical facts emerged in earlier year, we respectfully following the order of the coordinate bench in assessee's own case for assessment year 2016-17 also direct the Assessing Officer similarly. Accordingly, the Assessing Officer may examine the same in accordance with law after granting sufficient opportunity to the assessee. Accordingly, ground Nos. 8 to 11 of the appeal of the assessee is allowed with above directions. 26. Accordingly, the appeal of the assessee is partly allowed. 6.4. The facts prevailing in the instant case are exactly identical to the facts of the aforesaid decision of Mumbai Tribunal. Hence, respectfully following the decision of Mumbai Tribunal referred to supra, the ground Nos.7-9 are restored to the file of the ld. AO with the same directions. 7. The ground No.10 raised by the assessee is challenging the chargeability of interest u/s. 234D of the Act which is conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X
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