International traffic under tax treaty covers vessel movement on a larger voyage, preserving Article 8 relief for the assessee.

Transport of goods by vessel between two Indian ports was treated as "international traffic" under the India-Singapore Double Taxation Avoidance Agreement because the treaty exclusion applies only where the ship is operated solely between places in the other Contracting State. As the vessels formed part of a larger voyage from Singapore to Dubai and were not confined solely to movement between the Indian ports, the exclusion did not apply. The assessee was therefore entitled to Article 8 relief, and the Revenue's appeals were dismissed.

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Issues: Whether transport of goods by vessels between two Indian ports, when undertaken as part of a larger voyage from Singapore to Dubai, fell within the definition of "international traffic" under the India-Singapore Double Taxation Avoidance Agreement so as to entitle the assessee to the benefit of Article 8.

Analysis: The relevant treaty definition treats as "international traffic" any transport by a ship or aircraft operated by an enterprise of a Contracting State, except where the ship or aircraft is operated solely between places in the other Contracting State. The exclusion depends on the transport being solely between places in the other Contracting State. On the facts, the vessels were not confined to movement only between the two Indian ports but were engaged in a larger voyage from Singapore to Dubai. Since the condition of sole operation between places in India was not satisfied, the exclusion clause did not apply and the transport remained within "international traffic".

Conclusion: The assessee was entitled to the benefit of Article 8 of the India-Singapore Double Taxation Avoidance Agreement, and the Revenue's appeals were rightly dismissed.

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