DDIT (I.T) - 1(2), MUMBAI v. M/s. BARWIL FORBES SHIPPING SERVICES LTD., MUMBAI

ITA 582/MUM/2007 | 2001-2002
Pronouncement Date: 23-07-2010 | Result: Dismissed

Appeal Details

RSA Number 58219914 RSA 2007
Assessee PAN AAACX0061D
Bench Mumbai
Appeal Number ITA 582/MUM/2007
Duration Of Justice 3 year(s) 6 month(s) 5 day(s)
Appellant DDIT (I.T) - 1(2), MUMBAI
Respondent M/s. BARWIL FORBES SHIPPING SERVICES LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted L
Tribunal Order Date 23-07-2010
Assessment Year 2001-2002
Appeal Filed On 18-01-2007
Judgment Text
1 ITA NO.582/MUM/2007 M/S BARWIL FORBES SHIPPING SERVICES LTD (AS AGENT OF M/S DELMAS FRANCE) . IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L MUMBAI BEFORE SHRI T R SOOD AM & SHRI PADVEKAR JM ITA NO.582/MUM/2007 (ASST YEAR 2001-02) THE DY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION 1(2) MUMBAI VS M/S BARWIL FORBES SHIPPING SERVICES LTD (AS AGENT OF M/S DELMAS FRANCE) 113 MITTAL COURT A WING NARIMAN POINT MUMBAI 21 (APPELLANT) (RESPONDENT) PAN AAACX0061D ASSESSEE BY: SHRI F V IRANI REVENUE BY: SHRI MAYANK PRIYEDASHI O R D E R PER R S PADVEKAR: IN THIS APPEAL THE REVENUE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD CIT(A) XXXI MUMBAI FOR THE ASSESSMENT YEAR 2001 -02 DATED 5.9.206. 2 THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GRO UNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN HOLDING THAT INCOME FROM OPERATION OF SHIPS ASSESSED IN THE HANDS OF THE ASSESSEE AS REPRESENTATIVE ASSESSE E (R/A) OF M/S DELMAS FRANCE IS REQUIRED TO BE DELETED. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD CIT(A) ERRED IN HOLDING THAT INCOME OF OPERATION OF SHIPS ALREADY ASSESSED IN THE HANDS OF M/S DELMAS FRANCE WOULD NO T BE ADDED TO THE INCOME OF THE ASSESSEE AS AGENT. 2 ITA NO.582/MUM/2007 M/S BARWIL FORBES SHIPPING SERVICES LTD (AS AGENT OF M/S DELMAS FRANCE) . 3 THE FACTS WHICH REVEAL FROM THE RECORDS ARE THAT THE ASSESSEE WAS AN AGENT OF M/S DELMAS FRANCE WHO IS A NON-RESIDENT S HIPPING COMPANY WHICH WAS ASSESSED IN INDIA. THE ASSESSEE COLLECTED FREIGHT IN INDIA ON BEHALF OF DELMAS FRANCE AND THE SAME WAS REMITTED T O THE PRINCIPAL WITH OR WITHOUT DEDUCTION OF AGENT COMMISSION. THE A.O HAS NOTED THAT THE PRINCIPAL M/S DELMAS FRANCE HAS SHOWN THE TOTAL REC EIPT OF INR 118 809 049/- FROM INDIA ON ACCOUNT OF ITS SHIPPING BUSINESS DURING THE AY 2001-02. THE A.O ISSUED NOTICE U/S 163 OF THE I T ACT TO THE ASSESSEE TREATING THE ASSESSEE AS AGENT OF M/S DELMAS FRANCE IN INDIA. AFTER DISCUSSING THE PROVISION OF DTAA BETWEEN INDIA AND FRANCE; MORE PARTICULARLY ARTICLE 9 OF THE DTAA RELATING TO THE TREATMENT OF THE INCOME FROM SHIPPING AS WELL AS ARTICLE 5 RELATING TO THE PERMANENT ESTABLISHMENT (PE) ASSESSED THE ENTIRE INCOME/RECEIPTS OF M/S DE LMAS FRANCE IN THE HANDS OF THE ASSESSEE TREATING AS AN AGENT UNDER SE C.163 OF THE ACT. THE ASSESSEE CHALLENGED THE SAID ASSESSMENT ORDER BEFOR E THE LD CIT(A) AND FOUND FAVOUR AS THE LD CIT(A) DELETED THE ENTIRE AD DITION BY ACCEPTING THE PLEA OF THE ASSESSEE THAT SINCE THE INCOME HAS ALRE ADY BEEN ASSESSED IN THE HANDS OF M/S DELMAS FRANCE NO FURTHER ASSESSMENT OF SAME INCOME IN THE HANDS OF ITS AGENT IS NECESSARY. NOW THE REVENUE I S IN APPEAL HERE BEFORE US. 4 WE HAVE HEARD THE PARTIES. THE LD COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE SAME INCOME HAS BEEN ASSESSED IN THE HANDS OF THE PRINCIPAL M/S DELMAS FRANCE. IT IS ARGUED THAT THE ASSESSMENT MAD E IN THE HANDS OF M/S DELMAS FRANCE REACHED BEFORE THE TRIBUNAL BY WAY OF APPEAL ON THE TAXABILITY OF THE INCOME FROM SHIPPING AND AFTER CO NSIDERING THE PROVISIONS OF DATT BETWEEN INDIA AND FRANCE THE ENTIRE MATTER WAS SET ASIDE TO THE FILE OF THE A.O FOR FRESH ADJUDICATION. 3 ITA NO.582/MUM/2007 M/S BARWIL FORBES SHIPPING SERVICES LTD (AS AGENT OF M/S DELMAS FRANCE) . 5 M/S DELMAS FRANCE HAS NEVER DENIED THAT THE SAID INCOME BELONG TO IT. THE LD COUNSEL FOR THE ASSESSEE FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S DELMAS FRANCE IN ITA NO.5824 & 6076 /MUM/2006; ORDER DATED 28.11.2008. ON THE PERUSAL OF THE ORDER OF T HE TRIBUNAL WE FIND THAT ALREADY THE SAME INCOME HAS ASSESSED IN THE HANDS O F THE PRINCIPAL M/S DELMAS FRANCE. NOWHERE IT IS CLAIMED BY M/S. DELMA S FRANCE THAT THE SAID INCOME IS NOT TO BE TAXED IN ITS HAND. THE ISSUE I S IN RESPECT OF THE BENEFIT OF APPLICABILITY OF DTAA BETWEEN INDIA AND FRANCE. IN OUR OPINION ONCE THE INCOME IS ASSESSED IN THE HANDS OF THE PRINCIPAL TH EN THE SAME INCOME CANNOT BE TAXED IN THE HANDS OF THE AGENT. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD CIT(A) ON THI S ISSUE; ACCORDINGLY THE SAME IS CONFIRMED. 6 IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 23 RD DAY OF JULY 2010. SD/- SD/- ( T R SOOD ) ACCOUNTANT MEMBER (R S PADVEKAR ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 23 RD JULY 2010 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI