Income Tax Appellate Tribunal - Mumbai
Dcit (It) 4(2)(2), Mumbai vs Star Cruise (India) Travel Services ... on 21 August, 2018
ु ई यायपीठ,'जे'',मंब आयकर अपील य अ धकरण, मंब ु ई।
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, 'J' MUMBAI ी जो ग दर संह, या यक सद य एवं ी मनोज कुमार अ वाल, लेखा सद य, के सम Before Shri Joginder Singh, Judicial Member, and Shri Manoj Kumar Aggarwal, Accountant Member ITA Nos.2425 & 2426/Mum/2017 Assessment Years: 2014-15 & 2015-16 DCIT(IT)-4(2)(2), M/s Star Cruise (India) Room No.1708, बनाम/ Travel Services Pvt. Ltd.
17th Floor, C/o- Konodia Chauhan &
Air India Building, Vs. Co., Chartered Accountants
Nariman Point, 1032/33, Hubtown Solaris,
Mumbai-400021 N.S. Phadke Marg,
Andheri East,
Mumbai-400069
( नधा"#रती /Assessee) (राज व /Revenue)
PAN. No. AAFCS4154H
राज व क ओर से / Revenue by Shri A. Mohan- DR
नधा"#रती क ओर से / Assessee by Shri Vipul Joshi
ु वाई क& तार'ख / Date of Hearing:
सन 21/08/2018
आदे श क& तार'ख /Date of Order: 21/08/2018
2 ITA Nos. 2425 & 2426/Mum/2017
M/s Star Cruise (India)
Travel Services Pvt. Ltd.
आदे श / O R D E R
Per Joginder Singh(Judicial Member) These two appeals are by the Revenue against the impugned orders both dated 05/12/2016 of the Ld. First Appellate Authority, Mumbai, in holding that the tax is not deductible at source on the payments to Star Cruise Management Ltd. (SCML) out of sale proceeds of Cruise Tickets booked by the assessee and consequential levy of tax and interest under section 201 and 201(A) of the Income Tax Act, 1961 (hereinafter the Act) made by the Ld. Assessing Officer.
2. During hearing, at the outset, Shri Vipul Joshi, Ld. counsel for the assessee, claimed that the impugned issue is covered in favour of the assessee by various decisions of the Tribunal, on identical issue. The ld. counsel has filed the decisions for various Assessment Years in its paper book running into 70 pages. The Ld. DR, Shri A. Mohan, though defended the addition made by the Ld. Assessing Officer but did not controvert the factual matrix that the issue has been settled in favour of the assessee by the Tribunal for various 3 ITA Nos. 2425 & 2426/Mum/2017 M/s Star Cruise (India) Travel Services Pvt. Ltd.
Assessment Years and such orders are made available in the paper book filed by the assessee.
2.1. We have considered the rival submissions and perused the material available on record. We find that the Tribunal has decided this issue in the case of assessee itself in earlier Assessment Years and the one of the later decision of the Tribunal is for Assessment Year 2010-11 and 2011-12 (ITA Nos.2632 and 2633/Mum/2016), order dated 02/05/2018, which is reproduced hereunder for ready reference and analysis:-
These are appeals by the Revenue against the respective orders of the ld. Commissioner of Income Tax (Appeals), pertaining to the assessment years 2010-11 and 2011-12. Since the issues are common and connected and the appeals were heard together these have been disposed of by this common order.
2. The common grounds of appeal read as under:
1. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in law in holding that the gross receipt received by the SGML as principal from the agents is not chargeable to tax u/s. 5(2)(a) of the Income Tax Act, 1961?"
2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in holding that no income accrues or arises to the assessee in India regarding the business of sale of tickets through the selling agents?"
3. The Appellant prays that the order of the CIT(A) be set aside on the above ground(s) and the draft order of the Assessing Officer restored.
3. At the outset, in this case, the ld. Counsel of the assessee submitted that the issue is covered in favour of the assessee by a series of decisions of the tribunal in the assessee's own case.
4 ITA Nos. 2425 & 2426/Mum/2017M/s Star Cruise (India) Travel Services Pvt. Ltd.
4. Per contra, the ld. Departmental Representative did not dispute this proposition.
5. The brief facts of the case on this issue are as under: M/s. Star Cruise Management Limited (SCML) or the assessee is a foreign company registered in Isles of Man. SCML has appointed Star Cruise (India) Travel Services Pvt. Ltd. (SCITSPL), an Indian company as canvassers for its cruises operated outside India. The Indian company renders various services to the company. The nature of agreement is described as "appointment of SCITSPL as the General Sales Agent " in India mainly for collection of monies in India besides providing certain sales and marketing services in connection with the operation of the Vessels. The duties and obligations of the Indian party as per the agreement are:
i. To act as Canvasser in India for Cruise Packages, shores excursions promoted by SCML in respect of vessels owned, chartered, amanged and/or operated by Star Cruises Group of Companies from time to time.
ii. To remit monies received from PSA's for cruise packages, shore excursions promoted by SCML in India. iii. To keep SCML advised on all relevant laws and regulations and operating criteria relating to the sale of tickets with particular reference to consumer and contract legislations. iv. To treat as confidential all books, documents and information received from SCML and to return the same upon demand; and v. To keep and render to SCML fair and accurate accounts of any dealings of all monies received by SCITSPL in relation to sale, bookings & confirmation for and on behalf of SCML and to pay over to SCML, all monies so received without any deduction except as may be agreed upon or authorised between SCML and SCITSPL.
6. The assessing officer has dubbed the above arrangement as being in the nature of a business connection between the two parties as contemplated under section 9(1) (i) of the Income Tax Act and has estimated total profit of the non-resident from this business connection @ 5% of the turnover of the non-resident from India. For arriving at his decision, the AO has reproduced the duties and obligations of the Indian counterpart i.e. SCITSPL as per the agreement and has relied on the Supreme 5 ITA Nos. 2425 & 2426/Mum/2017 M/s Star Cruise (India) Travel Services Pvt. Ltd.
Court decision in the case of R D Aggarwal & Co. (56 ITR 20) and Anglo-French Textile Co Ltd (23 ITR 101).
7. Upon the assessee's appeal, the ld. Commissioner of Income Tax (Appeals) decided the issue in favour of the assessee by placing reliance upon a series of ITAT decision in the assessee's own case.
8. Against this order, the assessee is in appeal before us.
9. We have heard both the counsel and perused the records. We find that this tribunal in assessee's own case has decided the issue in favour of the assessee. The references to these decisions are as under:
1. ITA No.4973/M/2005 ITA No.6497/M/2006
2. ITA No.5713/M/2007
3. ITA No.2521/M/2008
4. ITA No.6112/M/2008
5. ITA No.3805/M/2010
6. ITA No.7759/M/2010
7. ITA No.7486/M/2011
8. ITA No.1809, 1810 & 1811/M/2013 MA No. 2 & 3/M/2016
10. The ld. Counsel of the assessee submitted that in the hands of the payer, i.e., Star Cruise (India) Travel Services Pvt. Ltd. It has been held that the said company was not responsible for tax at source as the income of the assessee M/s.SCML cannot be held as taxable in India to the extent of amount of sale of the cruise tickets in India. In this regard, the ld. Counsel of the assessee referred to the order of the tribunal in the case of M/s. Star Cruise (India) Travel Services P. Ltd. in ITA No. 3802/Mum/2010 for assessment year 2010-11 and ITA No.7487/Mum/2011 for assessment year 2011-12, in which the tribunal has similarly held that no income has accrued or arisen in India in respect of booking or sale of tickets for tour packages of the cruise in India.
6 ITA Nos. 2425 & 2426/Mum/2017M/s Star Cruise (India) Travel Services Pvt. Ltd.
11. Thus from the above it is amply evident that this tribunal has consistently decided the issue in favour of the assessee. No case has been made out that there are any distinguishing features in the present year or that the earlier decision of the tribunal has been reversed by the Hon'ble jurisdictional High Court. Hence, in accordance with the aforesaid discussion and precedent, we do not find any infirmity in the order of the ld. Commissioner of Income Tax (Appeals). Accordingly, we uphold the same.
12. In the result, these appeals by the Revenue stands dismissed." 2.2. In the appeal before us also, the Ld. Assessing Officer has doubted the arrangements of the assessee being in the nature of business connection between the two parties as contemplated under section 9(1)(i) of the Act and estimated the profit of the non-resident from the business connection. We find that this issue has been deliberated upon in the case of the assessee for various Assessment Years right form Assessment Year 2001 to onwards and till Assessment Year 2013-14. In the later decision, the Tribunal for Assessment Year 2010-11 and 2011-12, order dated 02/05/2018 has discussed the earlier Assessment Years and observed that the Revenue has made out any case or distinguishing features in the present year and neither the earlier order of the Tribunal were reversed by the Hon'ble jurisdictional High Court, thus, following the earlier decisions of the Tribunal and in the absence of any contrary facts, 7 ITA Nos. 2425 & 2426/Mum/2017 M/s Star Cruise (India) Travel Services Pvt. Ltd.
brought on record by the Revenue, we find no infirmity in the conclusion drawn by the Ld. Commissioner of Income Tax (Appeal). Resultantly, the appeals of the Revenue are dismissed.
Finally, appeals of the Revenue are dismissed.
This Order was pronounced in the open court in the presence of Ld. representatives from both sides at the conclusion of hearing on 21/08/2018.
Sd/- Sd/-
(Manoj Kumar Aggarwal) (Joginder Singh)
लेखा सद#य / ACCOUNTANT MEMBER या$यक सद#य /JUDICIAL MEMBER
मब
ुं ई Mumbai; )दनांक Dated :21/08/2018 f{x~{tÜ? P.S/. न.स.
आदे श क %$त'ल(प अ)े(षत/Copy of the Order forwarded to :
1. अपीलाथ- / The Appellant (Respective assessee)
2. ./यथ- / The Respondent.
3. आयकर आय1 ु त(अपील) / The CIT, Mumbai.
4. आयकर आय1 ु त / CIT(A)- , Mumbai,
5. 3वभागीय . त न ध, आयकर अपील'य अ धकरण, मब ंु ई / DR, ITAT, Mumbai
6. गाड" फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मब ुं ई / ITAT, Mumbai