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of <h1>Article 8 India-Singapore DTAA exempts shipping income from source taxation when profits remitted to Singapore</h1> <h3>M/s. Atlantic Shipping Pvt. Ltd. (As agent of M/s. ST Shipping & Transport Pte. Ltd.), M/s. GAC Shipping India Pvt. Ltd., (As agent of M/s. ST Shipping & Transport Pte. Ltd.), M/s. Seaworld Shipping & Logistics Pvt. Ltd. (As agent of BP Shipping Pte. Ltd.) Versus Income Tax Officer (International Taxation), Gandhidham-Kutch, Gujarat And M/s. Atlantic Shipping Pvt. Ltd. (As agent of BP Singapore Pte. Ltd.), M/s. Interocean Shipping India Pvt. Ltd. (as agent of BP Singapore Pte. Ltd.), M/s. GAC Shipping (India) Pvt. Ltd. (as agent of BP Shipping Pte. Ltd.) Versus The Deputy Commissioner of Income Tax (International Taxation), Rajkot</h3> M/s. Atlantic Shipping Pvt. Ltd. (As agent of M/s. ST Shipping & Transport Pte. Ltd.), M/s. GAC Shipping India Pvt. Ltd., (As agent of M/s. ST Shipping & ... Issues Involved:1. Non-adjudication of Ground No. 1 by CIT(A).2. Non-admission of additional evidence by CIT(A).3. Denial of benefits under Article 8 of the India-Singapore DTAA.4. Compliance with Article 24 of the India-Singapore DTAA.5. Taxability of ST Shipping's income in India.6. Applicability of Section 172 to regular shipping business.7. Interpretation of Singapore Income Tax Act and DTAA provisions.Summary:Issue 1: Non-adjudication of Ground No. 1 by CIT(A):The assessee contended that the CIT(A) erred in not adjudicating Ground No. 1, which challenged the ITO's assessment of the income of ST Shipping without issuing a draft order as required u/s 144C of the IT Act.Issue 2: Non-admission of Additional Evidence by CIT(A):The CIT(A) refused to admit a letter dated 9 January 2013 from the Inland Revenue Authority of Singapore (IRAS), which was filed during appellate proceedings. The CIT(A) observed that the assessee had sufficient opportunity to submit this evidence during the assessment and failed to justify why it was not presented earlier.Issue 3: Denial of Benefits under Article 8 of the India-Singapore DTAA:The CIT(A) upheld the ITO's decision to deny the benefit of Article 8 of the DTAA, as the freight income was remitted to a bank in London, UK, not Singapore. Article 24 of the DTAA requires remittance to Singapore to claim the benefit of Article 8.Issue 4: Compliance with Article 24 of the India-Singapore DTAA:The CIT(A) held that ST Shipping failed to comply with Article 24's remittance condition. The letter from IRAS did not confirm that the income was received in Singapore, only that it was taxable on an accrual basis. The CIT(A) concluded that receipt of funds in Singapore is a sine qua non for relief under Article 8.Issue 5: Taxability of ST Shipping's Income in India:The CIT(A) rejected the argument that no income of ST Shipping could be taxed in India due to the arm's length commission paid to independent shipping agents in India. The CIT(A) maintained that the income was taxable in India as the remittance condition was not met.Issue 6: Applicability of Section 172 to Regular Shipping Business:The CIT(A) did not accept the contention that Section 172 applies only to occasional shipping business, not to regular shipping companies like ST Shipping.Issue 7: Interpretation of Singapore Income Tax Act and DTAA Provisions:The CIT(A) upheld the ITO's interpretation that the freight income could not be regarded as Singapore-sourced under the Singapore Income Tax Act. The CIT(A) also noted that the IRAS letter was an opinion, not a binding interpretation, and did not specify the statutory provisions under Singapore law.Conclusion:The Tribunal restored the matter to the Assessing Officer to verify the contents of the IRAS certificate. If the Department cannot rebut the certificate, relief should be granted to the assessee following the Gujarat High Court's decision in the assessee's own case. The appeals for A.Ys. 2012-13 and 2015-16 were allowed for statistical purposes.
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