Treaty relief for shipping income extends to pooled freight receipts, and a binding High Court ruling remains effective despite SLP pendency.

Article 8 treaty protection for shipping income was treated as extending to freight receipts arising under pooling and joint business arrangements, including collections linked to feeder vessels and other covered shipments. The Tribunal also noted that a jurisdictional High Court ruling on the issue remained binding on it unless reversed, and that the mere pendency of an SLP before the Supreme Court did not reduce that binding force. On that basis, the restrictive approach below was not sustained and the treaty benefit was applied to the entire freight receipts.

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Issues: Whether the benefit of Article 8 of the India-UAE Double Taxation Avoidance Agreement could be denied in respect of freight collections arising from cargo and containers carried under pooling or joint business arrangements on vessels not directly operated by the assessee.

Analysis: The Tribunal held that the jurisdictional High Court had already decided the issue in favour of the assessee and that the mere pendency of a special leave petition before the Supreme Court did not dilute the binding force of that decision. It further held that the treaty protection under Article 8 extended to the entire freight receipts, including receipts connected with feeder vessels and other shipments covered by the joint business or pooling arrangement. On that basis, the restrictive view taken below could not be sustained.

Conclusion: The issue was decided in favour of the assessee, and the benefit of Article 8 was directed to be extended to the entire freight receipts.

Ratio Decidendi: A jurisdictional High Court decision remains binding on the Tribunal until reversed, and treaty protection for shipping income extends to receipts covered by the relevant pooling or joint business arrangement.

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