Case Law Details
CMA CGM SA Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that Inland Haulage Charges forms part of income from operation of ships in international traffic and hence covered under Article-9 of India-France Tax Treaty is not taxable in India.
Facts-
The assessee had collected a sum of Rs. 308,74,51,33 1, from its customers on account of IHC. These charges were collected towards transportation of goods from the exporter’s warehouse to the port of loading and vice versa. As per the assessee, the IHC activity is directly connected to and ancillary to the transportation of cargo in international traffic and it falls under Article 9 of India France Double Taxation Avoidance Agreement (DTAA). The AO vide draft assessment order rejected the claim of the assessee and held that the IHC received for transportation of goods in domestic areas. The AO further held that the handling charges are the charges paid for loading / unloading / stacking etc. of containers and that these charges are different than charges for transportation of goods. Accordingly, the AO held that IHC is taxable in India as business profit and these are not covered by Article 9 of DTAA or section 44B of the Act. In absence of details of expenditure incurred for IHC, the AO applied net profit rate of 10% on IHC receipts on conservative basis and accordingly added Rs. 30,87,45,133, to the total income of the assessee. The learned DRP rejected the objections filed by the assessee, against the aforesaid addition, by following its directions rendered in assessee’s own case for preceding assessment years, after noting that in the year under consideration facts are pari materia to the earlier assessment years and the issue is still pending before higher forums. In conformity to the directions issued by learned DRP, the AO passed the final assessment order. Being aggrieved, the assessee is in appeal before us.
Conclusion-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
