DTAA shipping profits exemption upheld, with Article 24 held inapplicable and remand for certificate verification set aside.

Article 8 of the India-Singapore DTAA was held to exempt profits from shipping operations in international traffic from source taxation, and Article 24 was found inapplicable because the Singapore income was assessable on an accrual basis rather than by reference to remittance or receipt. The Court accepted the Singapore tax authority certificate as already considered in earlier proceedings and found no material to justify fresh verification or a second opportunity for the Revenue to challenge it. The Tribunal's remand was therefore unsustainable, and the consequential assessment orders passed after remand could not stand.

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Issues: Whether the benefit of Article 8 of the India-Singapore DTAA for profits from operation of ships in international traffic was subject to Article 24, and whether the Tribunal was justified in remanding the matter for verification of the Singapore tax authority's certificate.

Analysis: The Court held that Article 8 granted exemption from source taxation on profits derived from shipping operations, and that Article 24 applied only where the other Contracting State taxed the income by reference to remittance or receipt. The certificate issued by the Singapore tax authority was already considered in an earlier decision of the Court, which had accepted that the income was assessable in Singapore on accrual basis and not on remittance basis. The Tribunal had relied on doubts about the certificate's wording and remanded the matter for fresh verification, but the Court found that no material had been brought on record to dislodge the certificate or justify giving the Revenue a second opportunity to challenge it. The Court also noted that the consequential assessment orders passed after remand could not survive once the remand itself was set aside.

Conclusion: The remand order was unsustainable, Article 8 applied in favour of the assessee, and Article 24 was held inapplicable on the facts.

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