The Director Of Income-Tax (International Taxation v. M/S.star Cruises (India) P. Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.485 OF 2010 ANDINCOME TAX APPEAL NO.486 OF 2010ANDINCOME TAX APPEAL NO.683 OF 2010 The Director of Income-Tax (International Taxation) Versus M/s.Star Cruises (India) P. Limited ..Appellant. ..Respondent. Mr.Suresh Kumar for the appellant.Mr.K. Gopal with Mr.Satendra Pandey for the respondent. CORAM : J.P. Devadhar & Smt.R.P. Sondurbaldota, JJ. P.C. : DATE : 1[st] July, 2011. 1.Whether the Income Tax Appellate Tribunal was justified in holding that the assessee was liable to deduct tax at source under Section 195 of the Income Tax Act, 1961 as per the provisions of Section 44B of the Act is the question raised by the Revenue in all these appeals. The assessment years involved herein are assessment years 2006-07, 2007-08 and 2008-09. The assessee is an Indian Company. The assessee filed an application on 29th March 2007 requesting for withholding of tax determination under Section 195 of the Act in respect of remittances to be made to M/s.Superstar Libra Limited, a non-resident company which at the material time was engaged in the business of conducting "Ship Cruises" originating and termination at Mumbai port through the assessee. The application filed by the assessee was rejected on the ground that the non-resident was not engaged in the shipping business involving carriage of passengers as contemplated under Section 44B of the Income-tax Act, 1961. According to the Revenue, the non-resident was carrying on hospitality and entertainment business on the ship cruise and not mere transport of passengers and, therefore, the assessee as agent of the non-resident cannot be said to be carrying on the shipping business involving carriage of passengers. 3.The assessee filed appeals, which were all allowed by the Commissioner of Income Tax (Appeals). The Income Tax Appellate Tribunal has confirmed the order passed by the Commissioner of Income Tax (Appeals). Hence, these appeals are filed by the Revenue. 4.Perusal of the order passed by the Tribunal shows that in the present case, the cruise conducted by the assessee consists of taking the passengers from Mumbai to various places and back. The Tribunal has recorded a finding of fact that the assessee is also offering one way cruise. There was no restriction that a passenger taking round trip ship cruise should disembark at Mumbai only. The Tribunal has held that merely because some entertainment programmes were made available on the board the cruise and the passengers were required to pay additional amount in respect thereof, it cannot be said that the assessee was not engaged in the shipping business involving carriage of passengers from Mumbai and back. The Tribunal has held that the business carried on by the assessee as agent of the non-resident constitutes shipping business as contemplated under Section 44B of the Act. 5.In our opinion, no fault can be found with the aforesaid decision of the Tribunal. All these appeals are accordingly dismissed with no order as to costs. (Smt.R.P. Sondurbaldota, J.) (J.P. Devadhar, J.)