Shipping-business exemption under India-Denmark DTAA upheld for slot chartering, container operations and Maersknet-linked receipts.

Income from slot chartering, related container operations and use of Maersknet was examined against the shipping-business exemption under Article 9 of the India-Denmark DTAA. The High Court noted that the disputed receipts had a nexus with ship operations in international traffic, the Tribunal had treated them as attributable to ship operations and container use, and the Revenue had not shown any distinguishing feature from binding precedent. As the Tribunal's view was a possible view consistent with earlier authority, no substantial question of law arose under section 260A, and the Tribunal's order was upheld.

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Issues: (i) Whether income from slot chartering and related container operations was entitled to exemption under Article 9 of the India-Denmark DTAA as income from operations of ships; (ii) Whether the income from use of Maersknet was covered by the shipping-business exemption; (iii) Whether the Tribunal was justified in following the earlier decision in NGC Network Ltd. while allowing the assessee's appeal.

Issue (i): Whether income from slot chartering and related container operations was entitled to exemption under Article 9 of the India-Denmark DTAA as income from operations of ships.

Analysis: The assessee was engaged in shipping operations in international waters, and the Revenue did not dispute that the four disputed cases had a nexus with the operation of ships in international traffic. The disputed receipts formed less than 0.5% of the total receipts. The Tribunal had found, on appreciation of evidence, that the receipts were attributable to ship operations and were connected with the use, maintenance, or rental of containers from feeder vessel operations. The High Court held that the nexus test was satisfied and that the Tribunal's view was a possible view.

Conclusion: The question did not give rise to any substantial question of law and was not entertained, in favour of the assessee.

Issue (ii): Whether the income from use of Maersknet was covered by the shipping-business exemption.

Analysis: The Revenue accepted that this issue had already been concluded against it in an earlier decision involving the same assessee for a different assessment year. In view of that binding earlier decision, the issue was treated as settled.

Conclusion: The question did not give rise to any substantial question of law and was not entertained, in favour of the assessee.

Issue (iii): Whether the Tribunal was justified in following the earlier decision in NGC Network Ltd. while allowing the assessee's appeal.

Analysis: The Revenue did not point out any distinguishing feature from the earlier decision followed by the Tribunal. In the absence of any material distinction, no fault could be found with the Tribunal's reliance on that precedent.

Conclusion: The question did not give rise to any substantial question of law and was not entertained, in favour of the assessee.

Final Conclusion: The High Court found no substantial question of law in any of the proposed questions and upheld the Tribunal's order.

Ratio Decidendi: Where the disputed receipts have a nexus with shipping operations in international traffic and the Tribunal's view is a possible view consistent with binding precedent, no substantial question of law arises under section 260A.

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