UNION OF INDIA vs GOSALIA SHIPPING PRIVATE LTD., MARGAO, GOA

The Supreme Court held that payments made under a charter party agreement for the use and hire of a vessel do not qualify as payments made 'on account of the carriage of goods' under Section 172(2) of the Income Tax Act, 1961. The Court emphasized that the substance of the agreement must be considered, and the intention of the parties was clear in defining the payment as hire charges. Consequently, the demand notice issued for income tax was dismissed, affirming the lower court's decision.