| Case ID |
323472b9-68bb-4f03-8a89-8c522b431743 |
| Body |
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| Case Number |
TAX CASE (APPEAL) No. 251 OF 2009 |
| Decision Date |
Jun 08, 2009 |
| Hearing Date |
|
| Decision |
The Madras High Court dismissed the Revenue's appeal, affirming the Income-tax Appellate Tribunal's decision that an Indian shipping company need not deduct tax at source for payments to its crew when the ship is outside the territorial waters of India for more than 182 days in a year. The court clarified that to qualify as a 'non-resident', the crew must work outside Indian waters for over the specified period. The ruling ensures that Indian shipping companies are not burdened with unnecessary tax deductions for their crew's earnings while operating in international waters, thus encouraging the shipping industry. |
| Summary |
In the case of Commissioner of Income Tax v. ICL Shipping Ltd., the Madras High Court addressed the tax obligations of Indian shipping companies regarding payments made to crew members. The court examined the provisions of the Income-tax Act, particularly sections 2(30), 2(42), and 6, to determine the residential status of crew members based on their service duration outside Indian territorial waters. It concluded that as long as crew members worked for more than 182 days outside these waters, the shipping company was not required to deduct tax at source on their payments. This ruling not only clarifies tax liabilities for shipping companies but also emphasizes the importance of understanding residency status under Indian tax law, particularly for sectors operating internationally. |
| Court |
Madras High Court
|
| Entities Involved |
ICL Shipping Ltd.
|
| Judges |
F.M. Ibrahim Kalifulla,
B. Rajendran
|
| Lawyers |
Mrs. Pushya Sitaraman
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
ICL Shipping Ltd.
|
| Citations |
2009 SLD 2931 = (2009) 315 ITR 195
|
| Other Citations |
CIT v. ICL Shipping Ltd. [2009] 315 ITR 195 (Mad.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
2(30),
2(42),
6
|