M/s. STAR CRUISE MANAGEMENT LTD., MUMBAI v. DDIT (I.T) - 2(1), MUMBAI

CO 306/MUM/2007 | 2003-2004
Pronouncement Date: 28-11-2011 | Result: Dismissed

Appeal Details

RSA Number 30619923 RSA 2007
Assessee PAN AAHCS0352F
Bench Mumbai
Appeal Number CO 306/MUM/2007
Duration Of Justice 3 year(s) 11 month(s) 15 day(s)
Appellant M/s. STAR CRUISE MANAGEMENT LTD., MUMBAI
Respondent DDIT (I.T) - 2(1), MUMBAI
Appeal Type Cross Objection
Pronouncement Date 28-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 28-11-2011
Date Of Final Hearing 28-11-2011
Next Hearing Date 28-11-2011
Assessment Year 2003-2004
Appeal Filed On 13-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI D.K. AGARWAL (JM) & SHRI B. RAMAKOTAI AH (AM) I.T.A. NO.5713/MUM/2007 (A.Y. 2003-04) DY. DIRECTOR OF INCOME-TAX (IT)-2(1) R.NO.120 1 ST FLOOR SCINDIA HOUSE BALLARD ESTATE N.M. ROAD MUMBAI-400 038. VS. M/S. STAR CRUISES MANAGEMENT LTD. M/S. S.B. KANODIA & CO. C.AS G-15 EVEREST 8 TH FLOOR TARDEO ROAD MUMBAI-400 034. PAN: AAHCS0352F APPELLANT RESPONDENT C.O. NO.306/MUM/2007 (ARISING OUT OF I.T.A. NO.5713/MUM/2007) (A.Y. 2003-04) M/S. STAR CRUISES MANAGEMENT LTD. M/S. S.B. KANODIA & CO. C.AS G-15 EVEREST 8 TH FLOOR TARDEO ROAD MUMBAI-400 034. PAN: AAHCS0352F VS. DY. DIRECTOR OF INCOME-TAX (IT)-2(1) R.NO.120 1 ST FLOOR SCINDIA HOUSE BALLARD ESTATE N.M. ROAD MUMBAI-400 038. CROSS OBJECTOR RESPONDENT DEPARTMENT BY SHRI D.S. SUNDER SINGH. ASSESSEE BY NONE. DATE OF HEARING 28-11-2011 DATE OF PRONOUNCEMENT 28 -11-2011 O R D E R PER D.K. AGARWAL JM : THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 15-6-2007 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 20 03-04 AGAINST WHICH THE ASSESSEE HAS ALSO ITA NO.5713 & CO NO.306/M/07 M/S. STAR CRUISE MGT. LTD. 2 FILED CROSS OBJECTION. THE REVENUES APPEAL AND THE ASSESSEES CROSS OBJECTION ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE TIME OF HEARING NONE ATTENDS ON BEHALF O F THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE. IT WAS THEREFORE DECIDED TO DISPOSE OF THE APPEAL AND CROSS OBJECTION EX PARTE QUA THE ASSESSEE ON MERITS AFTER HEARIN G THE LD. D.R. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT M/S. S TAR CRUISES (INDIA) TRAVEL SERVICES PVT. LTD. (SCTS) IS AN INDIAN COMPANY ENGAGED IN THE BUSIN ESS OF PROVIDING TRAVEL AND TOUR RELATED SERVICES. IT HAD ENTERED INTO A GENERAL SALES & MAR KETING SERVICE AGREEMENT WITH STAR CRUISES MANAGEMENT LTD. ISLE OF MAN (SCML) A FOREIGN COM PANY AND ASSESSEE FOR SELLING THEIR CRUISE TICKETS AND FOR PROVIDING RELATED MARKETING SERVICE S FOR AN AGREED REMUNERATION. ACCORDING TO THE ASSESSEE THE AGREEMENT BETWEEN ASSESSEE AND TH E INDIAN COMPANY WAS ON PRINCIPAL TO PRINCIPAL BASIS. TICKETS AND FINAL CONFIRMATION WER E BEING GIVEN BY THE FOREIGN COMPANY TO THE CUSTOMERS AND PASSENGERS DIRECTLY. NONE OF THE SHIP S OF FOREIGN COMPANY EITHER TOUCH AN INDIAN PORT OR ENTER INTO INDIAN TERRITORIAL WATER. INDIAN CUSTOMERS HAVE TO TAKE CRUISE FROM FOREIGN PORT. THE INDIAN COMPANY COLLECTS THE MONEY AND REM IT THE SAME TO THE FOREIGN COMPANY AS PER THE GUIDELINES OF FEMA FOR RENDERING THESE SERVICES . THE INDIAN COMPANY GETS COMMISSION. THE ASSESSEE SUBMITTED THAT THE ASSESSEE COMPANY IS REC EIVING THE REMITTANCES OF TICKETS SOLD BY THE INDIAN COMPANY OUTSIDE INDIA. ASSESSEE IS NOT CARRY ING OUT ANY ACTIVITY IN INDIA AND AS SUCH NO INCOME ACCRUES OR ARISES IN INDIA. HOWEVER THE AO AFTER CONSIDERING THE ASSESSEES SUBMISSIONS INTER ALIA OBSERVED THAT A PLAIN READING OF SECTIO NS 5 AND 44B CLEARLY SHOWS THAT THE AMOUNT RECEIVED BY THE SCTS AS AN AGENT OF ASSESSEE IS THE AMOUNT OF SCML RECEIVED BY ITS AGENTS IN INDIA AND SUCH RECEIPT IS TAXABLE U/S. 5(2)(A) AND ACCORDINGLY HE COMPUTED THE ASSESSEES INCOME U/S.44B READ WITH SEC. 5(2) OF THE ACT VIDE ASSESSM ENT ORDER DATED 23-8-2005 PASSED U/S. 143(3) OF THE INCOME-TAX ACT 1961 (THE ACT) AS UNDER : GROSS AMOUNT RECEIVED DURING THE YEAR RS.41 33 3 4 898 INCOME @ 7.5% U/S.44B (7.50% OF RS.41 33 34 898) RS. 3 10 00 117 ITA NO.5713 & CO NO.306/M/07 M/S. STAR CRUISE MGT. LTD. 3 ASSESSED TAX @ 40% OF 3 10 00 117) RS. 1 24 00 047 SURCHARGE @ 5% 1 24 00 047) RS. 6 20 0 02 4. ON APPEAL THE LD. CIT(A) WHILE RELYING ON THE APPELLATE ORDER FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 HELD THAT NO INCOME ACCRUES OR ARISES TO THE APPELLANT IN INDIA REGARDING THE BUSINESS OF SALE OF TICKETS THROUGH THE SOLE SE LLING AGENT AND ACCORDINGLY DELETED THE ADDITION MADE BY THE AO. 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US TAKING THE FOLLOWING GROUND OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT NO INCOME ACCRUES OR ARISES TO THE ASSESSEE IN INDIA REGARDING THE BUSINESS OF SALE OF TICKETS THROUGH THE SOLE SELLING AGENTS. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. RESTORED. 6. AT THE TIME OF HEARING THE LD. D.R. WHILE RELY ING ON THE ORDER OF THE AO VERY FAIRLY SUBMITS THAT THE TRIBUNAL IN THE ASSESSEES OWN CAS E FOR ASSESSMENT YEARS 2001-02 AND 2002-03 ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE HAS DISMISSED THE REVENUES APPEAL AND THE ASSESSEES CROSS OBJECTION VIDE ORDER DATED 21-12-2 009. HE ALSO PLACED ON RECORD COPY OF THE SAID ORDER OF THE TRIBUNAL. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. D.R. AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT THE LD. CIT(A) WHILE HOLDING THAT THE ASSESSM ENT ORDER FOR THE ASSESSMENT YEAR 2003-04 HAS BEEN PASSED ON THE SAME LINES AS OF ASSESSMENT YEAR 2001-02 AND NO FRESH FACTS HAVE BEEN BROUGHT ON RECORD NOR ANY FRESH ARGUMENTS HAVE BEEN RAISED FOLLOWED THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2001-02 AND HELD THAT NO INCOME ACCRUES OR ARISES TO THE ASSESSEE IN INDIA REGARDING THE BUSINESS OF SALE OF TICKETS THROUGH T HE SOLE SELLING AGENT. ITA NO.5713 & CO NO.306/M/07 M/S. STAR CRUISE MGT. LTD. 4 8. IN DDIT-2(1) MUMBAI VS. STAR CRUISE MANAGEMEN T LTD. AND VICE VERSA IN ITA NOS.4973/M/2005 & 6497/M/06 AND C.O.NOS.71/M/2006 A ND 75/M/2007 FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 DATED 21-12-2009 THE TRI BUNAL AFTER FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS.3818 TO 3823/MUM/2004 AND ITA NO.6499/MUM/2006 DATED 30-11-2009 HELD VIDE PARA-5 OF ITS ORDER AS UNDER : 5. IN THE PRESENT APPEALS THE IDENTICAL QUESTION I S POSED BEFORE US WHICH WAS FOR OUR CONSIDERATION IN THE DIFFERENT W AY IN THE CASE OF M/S. STAR CRUISES (INDIA) SERVICES PVT. LTD. (SUPRA). TH E TRIBUNAL HAS ALREADY HELD THAT THE ASSESSEE WAS NOT HAVING ANY BUSINESS CONNECTION IN INDIA WITHIN THE MEANING OF SECTION 9(1)(I) OF THE ACT A ND HENCE NO INCOME HAS BEEN ACCRUED TO THE ASSESSEE I.E. M/S. SCML IN INDIA IN RESPECT OF BOOKING OR SALE OF TICKETS FOR TOUR PACKAGES OF T HE CRUISES IN INDIA. THE REASONS GIVEN FOR CANCELLING THE DEMAND IN THE CASE OF M/S. STAR CRUISES (INDIA) SERVICES PVT. LTD. (SCITS) ARE MUTATIS MUTA NDIS ARE ALSO APPLICABLE TO THE ASSESSEES CASE. WE THEREFORE H OLD THAT NO INCOME HAS BEEN ACCRUED TO THE ASSESSEE IN INDIA ON THE SALE O F TICKETS/BOOKING OF CRUISE TOUR PACKAGES WHICH WAS DONE THROUGH STAR CRUISES (INDIA) TRAVEL SERVICES PVT. LTD. (SCITC). ACCORDINGLY THE ORDERS OF THE CIT(A) ARE UPHELD IN BOTH THE ASSESSMENT YEARS. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL (SUPR A) HOLD THAT NO INCOME ACCRUES OR ARISES TO THE ASSESSEE IN INDIA ON THE SALE OF TICKETS/BOOKIN G OF CRUISE TOUR PACKAGES WHICH WAS DONE THROUGH STAR CRUISES (INDIA) TRAVEL SERVICES PVT. L TD. (SCITC) AND ACCORDINGLY WE UPHOLD THE ORDER OF THE LD. CIT(A) IN ALLOWING THE APPEAL OF T HE ASSESSEE. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTED. C.O. NO. 306/MUM/2007 (BY THE ASSESSEE): 9. ALL THE GROUNDS TAKEN BY THE ASSESSEE IN CROSS OBJECTION ARE IN SUPPORT OF THE ORDER PASSED BY THE LD. CIT(A). 10. AFTER HEARING THE LD. D.R. AND PERUSING THE MAT ERIAL AVAILABLE ON RECORD AND KEEPING IN VIEW OF OUR FINDING RECORDED IN THE REVENUES APPEA L HEREINABOVE WE ARE OF THE VIEW THAT THE GROUNDS TAKEN BY THE ASSESSEE IN ITS CROSS OBJECTIO N DO NOT REQUIRE FRESH ADJUDICATION AND ITA NO.5713 & CO NO.306/M/07 M/S. STAR CRUISE MGT. LTD. 5 ACCORDINGLY WE WHILE UPHOLDING THE ORDER PASSED BY THE LD. CIT(A) REJECT THE GROUNDS TAKEN BY THE ASSESSEE IN ITS CROSS OBJECTION. 11. IN THE RESULT THE REVENUES APPEAL AND THE ASS ESSEES CROSS OBJECTION STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 28TH DAY OF NOVEMBER 2011. SD/- SD/- (B. RAMAKOTAIAH) (D.K. AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 28TH NOVEMBER 2011. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-XXXI MUMBAI. 4 DIT(INTERNATIONAL TAXTION) MUMBAI. 5.DR J BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR ITAT MUMBAI. ITA NO.5713 & CO NO.306/M/07 M/S. STAR CRUISE MGT. LTD. 6 DETAILS DATE INITIALS DESIGNATI ON 1. DRAFT DICTATED ON 28-11-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 28-11-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER