TaxTMI 
TaxTMI 
2019 (7) TMI 1148
X X X X Extracts X X X X
X X X X Extracts X X X X
....request to treat M/s Navship Marine Services Private Ltd as agents to the Master of the said vessel and also to the non-resident freight beneficiary i. e. M/s Voyage Ship Management Pte. Ltd., Singapore. The AO had issued NOC on 13. 06. 2014 along with order u/s 163 of the Act treating M/s Navship Marine Services Pvt. Ltd., Visakhapatnam as agent of the Master of the vessel and also to the said non -resident shipping company (M/s Voyage Ship Management Pte. Ltd., Singapore. ) i. e. freight beneficiary. The agent was also directed by the AO to file the return of income u/s 172(3) of the Act in respect of freight tax payable by the above stated non-resident freight beneficiary for the said voyage within 30 days from the date of departure of the vessel from Visakhapatnam. 2.1. In response to the notice, the Representative assessee filed the return of income u/s 172(3) on 28. 11. 2014 declaring total income of Rs. 11,49,633/- and claimed the entire amount as exempt under DTAA. The AO found that the vessel left Visakhapatnam on 18. 06. 2014 carrying 30,470 MTS of Calcinated Alumina Powder to Jebel Ali, UAE. Accordingly, the total income earned and tax payable on the freight of the sai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plicable. The Ld. AR further submitted that Article 8 supersedes Article 24, when Article 8 is applicable, there is no case for application of Article 24. The Ld. AR relied on the decision of Hon'ble High Court of Gujarat in the case of M. T. Maersk Mikage &Ors. Vs. Director of Income Tax (International Taxation) 242 Taxman 0300 in paragraph Nos. 8, 10, 15,16, 18 and 20 of the order of the Hon'ble High Court of Gujarat, which reads as under : "8. Before the Commissioner, during the proceedings under section 264 of the Act, the petitioner also produced a letter dated 09. 01. 2013 issued by Inland Revenue Authority of Singapore, in which, it was stated that the income in question derived by the ST Shipping would be considered to be income accruing in or derived from a business carried on in Singapore and the income would be therefore assessable to tax in Singapore on accrual basis. ' This was in response to the petitioner's letter to the said Revenue authority of Singapore concerning the applicability of Article 24 of the DTAA. The contents of the letter dated 09. 01. 2013 of the authority may be reproduced. "We refer to your letter dated 2 January 2013. 2. You have stat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of applicability of Article 8 vis-a-vis Article 24 of DTAA. We may quickly refresh the facts. ST Shipping is a company based in Singapore. Through the shipping business carried out at Indian ports, ST Shipping earned income, on which, it claims immunity from Indian income tax. The Revenue contends that the remittance of such accrued income not having taken place at Singapore, Article 24 will apply and consequently Article 8 providing for avoidance of table taxation would not apply. 16. The fact, that the income in question which arises out of shipping operations by virtue of Clause- 1 of Article 8 of the DTAA would be taxable only in Singapore, is not in serious dispute. The moot question therefore is whether operation of Article 8 is ousted by virtue of Clause-1 of Article 24. As noted, Article-24 of DTAA pertains to limitation of relief. Under clause-1 thereof where the agreement provides that the income from sources in contracting states (in the present case, India) shall be exempt from tax or tax at a reduced rate and under the Jaws in force in other contracting states (i. e. Singapore), such income is subject to tax by reference to the amount thereof which is remitted or re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g clause-1 of Article 24 would not survive. The contention of Shri Mehta for revenue that the certificate of the Singapore revenue authorities is opposed to provisions of section 10 of the Singapore Income Tax Act also cannot be accepted. The Revenue does not question genuineness of the certificate. It cannot dispute the contention on the ground that the same are opposed to the statutory provision. 20. Under the circumstances, in our opinion, Assessing Officer and the Commissioner committed serious error in passing the Impugned orders. Before closing, we may briefly touch on one more aspect sought to be raised by the Revenue viz. of the actual tax being paid by the assessee on such income at Singapore. On the ground that such income is exempt from payment of tax, the Revenue desired to impose tax in India. In this context, the petitioner has relied on the decision of Delhi High Court in case of Emirates Shipping Line, FZE (supra), in which it was held that the assesses, a UAE based shipping company, whose income from such business was exempt from tax in such country, would still not be liable to pay tax in India by virtue of Article 8 of the DTAA between the said two countries. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m operation of ship or international traffic shall be taxable in the contracting state. The above Article clearly shows that the profits from operation of ship or aircraft are taxable in the Contracting State. Since the assessee is non-resident and he is the owner of the ship, income is taxable in Singapore, but not in India. However, there is no evidence as per information filed by the assessee to show that the income representing voyage undertaken in India in June 2014 was admitted in the income tax return of the assessee filed in Singapore. In the case law relied upon by the assessee in para No. 15, it was clarified by the Hon'ble High court that if the income in question is taxable in Singapore on the basis of receipt or remission and not by reference to the full amount of income accruing, Clause-1 of Article 24 would apply and dependent on the facts of the case, exemption as per Article 8 either in whole or in part would be excluded. In para No. 17, the Hon'ble High Court observed that as per certificate dated 09. 01. 2013 issued by the Inland Revenue Authority of Singapore, it was certified that the income in question derived by ST Shipping company would be considered as inco....