India-Singapore DTAA relief on capital gains upheld where Singapore taxation was not based on remittance and Article 24 did not apply.

Article 13(4) of the India-Singapore DTAA was applied to gains from alienation of debt instruments, so the gains were taxable only in Singapore. Article 24 was held to be inapplicable because the Singapore tax certificate stated that the income was taxable there without reference to the amount remitted or received, and that limitation clause operates only where relief is linked under the other State's law to remittance-based taxation. The certificate was treated as sufficient evidence of the Singapore tax position, and the Assessing Officer could not replace it with his own interpretation of Singapore law. On that basis, the treaty benefit under Article 13(4) was upheld.

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Issues: Whether the assessee was entitled to the benefit of Article 13(4) of the India-Singapore Double Taxation Avoidance Agreement despite Article 24, and whether the limitation of relief under Article 24 applied where the Singapore tax authorities certified that the capital gains were taxable in Singapore without reference to remittance.

Analysis: Article 13(4) applied to gains from alienation of the debt instruments, making such gains taxable only in Singapore. Article 24 operated only where the source-country exemption or reduced rate was linked, under the other Contracting State's law, to taxation by reference to the amount remitted or received there. The certificate issued by the Singapore tax authorities stated that the income would be taxed in Singapore without reference to the amount remitted or received there. In that situation, the limitation in Article 24 did not apply. The certificate constituted sufficient evidence of the Singapore tax position, and the Assessing Officer could not substitute his own interpretation of Singapore law.

Conclusion: The assessee was entitled to the treaty benefit under Article 13(4), and Article 24 did not disallow that benefit. The appeal raised no substantial question of law and was dismissed.

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