DCIT(IT)4(2)(2), MUMBAI vs. STAR CRUISE MANAGEMENT LIMITED, MUMBAI

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 2 & 2633/Mum/2016 M/s. Star Cruise Management Limited 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?"

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.

Per contra, the ld. Departmental Representative did not dispute this proposition.

The brief facts of the case on this issue are as under:

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 Court decision in the case of R D Aggarwal & Co. (56 ITR 20) and Anglo-French Textile Co Ltd (23 ITR 101).

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.

Against this order, the assessee is in appeal before us.

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:

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 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.

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.