Shipping profits under India-France DTAA include slot-hire income used in integrated international carriage, securing treaty protection.

Profits from slot-hire arrangements used as part of the integrated carriage of goods from Indian ports to foreign hub ports and onward abroad were treated as profits derived from the operation of ships in international traffic under the India-France DTAA, where the treaty language was materially similar to the provision previously construed in related shipping matters. The slot-hire component was therefore brought within Article 9(1) treaty protection, and the income remained exempt under the shipping article. The question of law was answered in favour of the enterprise.

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Issues: Whether the profits attributable to slot-hire arrangements used for carriage of goods from Indian ports to foreign hub ports and onward to final destinations abroad were entitled to exemption under Article 9(1) of the India-France DTAA.

Analysis: The respondent was an enterprise engaged in the operation of ships in international traffic and, for the relevant voyage, used slot-hire facilities on ships owned or chartered by others for the leg from India to foreign hub ports before continuing the carriage on vessels operated by it. The treaty provision governing shipping profits in the India-France DTAA was materially similar to the corresponding provision previously construed in the related shipping appeals. On that basis, the slot-hire component was treated as falling within profits derived from the operation of ships in international traffic and therefore within the treaty protection.

Conclusion: The respondent was entitled to the benefit of Article 9(1) of the India-France DTAA, and the question of law was answered in its favour.

Final Conclusion: The appeal failed on the treaty issue and the assessment of the slot-hire income remained protected under the shipping article of the DTAA.

Ratio Decidendi: Where an enterprise operating ships in international traffic uses slot-hire arrangements as part of the integrated carriage of goods from India to overseas destinations, the profits from that arrangement are profits derived from the operation of ships in international traffic for treaty purposes when the relevant treaty language so provides.

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