Income Tax Appellate Tribunal - Rajkot
Maersk Tankers Singapore P. Ltd., ... vs The Acit, Inter. Taxa., Rajkot, ... on 4 March, 2022
आयकर अपीलीय अिधकरण,
अिधकरण राजकोट यायपीठ,
यायपीठ, राजकोट
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT BENCH, RAJKOT
(Conducted Through Virtual Court)
]
]
BEFORE S/SHRI PRAMOD M. JAGTAP, VICE PRESIDENT
AND
T.R. SENTHIL KUMAR, JUDICIAL MEMBER
Stay Petition Nos.01 and 02/RJT/2022
IN
ITA No.17 and 18/RJT/2022
Assessment Year :2017-18
Maersk Tankers Singapore Pte Ltd. The ACIT
(Indian Agent - Inchacape Shipping Vs (International Taxation)
Services India P.Ltd. Rajkot.
C/o. Maersk Tankers (India) P.Ltd.
Tower A Unit 702
Embassy 24, LBS Marg
Chandan Nagar, Vikhroli West
Mumbai 400 083.
अपीलाथ / (Appellant) यथ /(Respondent)
Assessee by : Shri Manish Kantha, AR
Revenue by : Shri Vidyasagar S. Ubale, Sr.DR
सन
ु वाई क तार ख/ Date of Hearing : 04/03/2022
घोषणा क तार ख / Date of Pronouncemen t: 04/03/2022
आदे श/O R D E R
PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER:
These are two Stay Petitions filled by the assessee; S.P.No.01/RJT/2022 is against final Asstt.Order No.ITBA/COM/F /17/2021022/1037448757(1) in respect of two vessels and another in SP No.02/RJT/2022 is against Final Asst.Order no.ITBA/COM/F/17/2021-22/1037445231 (1) in respect of 12 SP No.1 and 2/Rjt/2022 2 vessels both are of even dated i.e. 2.12.2021 passed by ACIT, International Taxation, Rajkot under sections 172(4) rws 254 rws 144C(13) of the Income Tax Act, 1961 ("the Act" for short). By these stay petitions the assessee seeks stay of recovery of outstanding tax demand raised in the respective orders.
2. Short facts of the case, as pleaded in the stay petition are that assessee-company is incorporated in Singapore and is engaged in the business of ship owning, operating, chartering and related business. It is a tax resident of Singapore and eligible to claim benefit under the Double Taxation Avoidance Agreement between India and Singapore ("Tax Treaty"). As per Article 8(1) of India- Singapore Tax Treaty, freight income earned by a Singapore resident company from operation of ships is taxable only in Singapore and not in India. In view of the above, freight income arising to the assessee out of voyages performed by the various vessels are taxable only in Singapore and not in India. In view of the above, question to be decided is, whether freight income arising to the assessee out of the vessels performed are taxable in India or in Singapore.
3. No doubt this issue had travelled upto the ITAT, Rajkot Bench in earlier round of litigation, and the Tribunal vide order in ITA No.429 & 430/RJT/2018 dated 21.11.2019 set aside the matter back to the file of the AO for passing fresh order. Accordingly, in the second round of assessment proceedings, the ld.AO passed a draft order dated 24.2.2021 wherein he disregarded the claim of the assessee for benefit of Article 8 of the Indo-Singapore Tax Treaty by invoking provisions of Article despite the fact that the entire freight amount was directly remitted to Singapore. Aggrieved against the draft assessment order the assessee carried the matter to Dispute SP No.1 and 2/Rjt/2022 3 Resolution Panel-2 (DRP), Mumbai. The ld.DRP confirmed the addition proposed by the AO and passed an order dated 26.11.2021. Based on direction of the ld.DRP, the AO passed a final assessment order on 2.12.201 under section 172(4) rws 254 rws 144C(13) of the Act, which is impugned before us.
4. As stated hereinabove, by present stay petitions assessee seeks stay of outstanding tax demand in respect of following vessels:
In respect of two vessels In respect of 12 vessels In SP No.1/RJT/2022 In Sp No.2/RJT/2022 Tax Rs.11,19,471/- Tax Rs.3,20,56,698/- Less: Rs.4,85,632/- Less: Rs.1,23,30,928/-
Amount Amount Rs.1,39,06,358/
already paid already paid Rs.15,75,430/-
Amount Rs.6,33,839/- Amount Rs.1,81,50,337/-
Outstanding Outstanding
Proof of payment of taxes has been furnished along with respective stay petitions. The ld.counsel for the assessee further pleaded that benefit of Article 8 of Treaty is a settled issue by the jurisdictional High Court in the case of M.T. Maersk Mikae Vs. DIT(International Taxation) reported in 72 taxmann.com 359. The assessee also pleaded that they have already made payment of 43% in the first of round of litigation itself. Therefore, he prayed for absolute stay of further recovery of outstanding tax demand, and also early out-of-turn hearing of its appeals.
5. Per contra, the ld.DR appearing for the Revenue has strongly objected of granting stay and pleaded that the case law cited by the assessee of jurisdictional High Court is not applicable to the case of the assessee, however, decision of Co-ordinate Bench of ITAT, Rajkot order dated 29.3.2021 is applicable. Therefore, the assessee be SP No.1 and 2/Rjt/2022 4 directed to remit 100% of the demand, more so when no financial difficulties is being pleaded by the assessee. Thus, the ld.DR vehemently opposed the stay of demand.
6. We have given our thoughtful consideration to the facts of the case and perused the material placed before us. As per first proviso to section 254(2A) of the Income Tax Act, the Appellate may after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253 for a period not exceeding 180 days from the date of stay order subject to conditions that the assessee deposits not less than 20% of the amount of tax, interest, penalty if any or any other sum payable under the provisions of the Act or furnish security of equal amount in respect thereof, then the Appellate Tribunal shall dispose of the appeal within the said period.
7. Admittedly, in this case, it is second round of appeal before the Tribunal. As it can be seen from the table above, the assessee has made payment of tax to the extent of 43% before the AO, which was not disputed by the ld.DR. The above proviso to section 254 (2A) also provides for passing of an order of stay in "any" proceedings relating to an appeal. Thought, it is a second round of litigation, and as per the conditions prescribed under section 254(2A) of the Act, the assessee has deposited more than 20% of the demand with the AO. Looking to the fact that substantial part of demanded tax has been paid by the assessee in both the cases, we are of the view that it is a fit case for grant of stay of recovery of outstanding demand in both the cases. Therefore, we are inclined to grant stay of further recovery of the proceedings for a period of six months or till the disposal of respective appeals of the assessee, whichever is earlier.
SP No.1 and 2/Rjt/2022 5 Accordingly, the above cases are directed to be listed for early hearing on 29th March, 2022. Registry is directed to list the cases accordingly. Needless to state both the parties shall file paper books in support of their claim well in advance and exchange between each other, and get ready for final hearing of the cases on the fixed date.
7. With these above observation, Stay Petitions filed by the assessee are allowed and further recovery of outstanding demands is stayed for six months from today.
Order pronounced in the Court on 4th March, 2022 at Ahmedabad.
Sd/- Sd/- (PRAMOD M. JAGTAP) (T.R. SENTHIL KUMAR) VICE-PRESIDENT JUDICIAL MEMBER Ahmedabad, dated 04/03/2022 vk*
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ! / The Appellant
2. "यथ! / The Respondent.
3. संबं&धत आयकर आयु(त / Concerned CIT
4. आयकर आयु(त (अपील)/ The CIT(A)-
5. वभागीय त न&ध,आयकर अपील य अ&धकरण ,राजोकट/DR,ITAT, Ahmedabad,
6. गाड1 फाईल /Guard file.
आदे शानुसार/ BY ORDER, सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ&धकरण, ITAT, Ahmedabad