TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether income from slot chartering used in the transport of goods by sea fell within Article 9 of the India-UK Double Taxation Avoidance Agreement as income from the operation of ships in international traffic; (ii) Whether such slot charter income was taxable under section 44B of the Income-tax Act, 1961.
Issue (i): Whether income from slot chartering used in the transport of goods by sea fell within Article 9 of the India-UK Double Taxation Avoidance Agreement as income from the operation of ships in international traffic.
Analysis: The expression "operation of ships" was not defined in the treaty or the Act, so it had to be construed in the treaty context in light of domestic tax law under article 3(3). The Court held that slot hire arrangements formed an integral part of the assessee's shipping business where the assessee also chartered ships, owned and leased containers, and used slot facilities either to move cargo to an overseas hub for onward carriage or directly to the foreign destination. The activity was directly connected with, or at least ancillary to, the operation of ships in international traffic and could not be severed from the shipping business merely because the relevant sector was moved on another operator's vessel.
Conclusion: The slot charter income fell within Article 9 and was exempt in the State of residence under the treaty.
Issue (ii): Whether such slot charter income was taxable under section 44B of the Income-tax Act, 1961.
Analysis: The Court accepted the Revenue's position that slot hire receipts were assessable under section 44B and treated that provision as a contextual aid in understanding the treaty phrase "operation of ships". The domestic provision and the treaty provision were read as using the same concept in a similar taxation context, and the treaty phrase was therefore not given a narrower meaning than the domestic one in the circumstances of the case.
Conclusion: The slot charter receipts were treated as falling within section 44B, but that did not detract from treaty relief under Article 9.
Final Conclusion: The appeal failed because the assessee's slot charter income was held to be covered by the shipping article of the treaty, and the order of the appellate authorities in favour of the assessee was sustained.
Ratio Decidendi: Income from slot chartering, when it is directly connected with or ancillary to the assessee's shipping operations in international traffic, constitutes income from the operation of ships for purposes of the shipping article in the applicable tax treaty.
TaxTMI 
TaxTMI 
