TaxTMI 
TaxTMI 
2025 (8) TMI 438
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....eration of ships in international traffic? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that above shipping income earned by the assessee under its agreement with OBL FZCO is also covered by Article 8(4) of the DTAA and not liable to tax in India? 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not adjudicating the ground that the assessee does not have a fixed place PB in India under Article 5(1) of the tax treaty? 5. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not adjudicating the ground that BSL Freight Solutions Put. Ltd. is not dependent agent PB of the assessee in India under Article 5(4) of the DTAA? 2. The Ld. DR relied on the assessment order where the Ld. AO denied the benefit of Article 8 of the DTAA of India and UAE to the appellant company for its shipping income which was derived from the operations of ships in international traffic. In this case, the Ld. AO, denied the above said Treaty Benefit and assessed the Inland Haulage receipts and shipping receipts derived from the operation of ....
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....Year 2016-17. The assessee assailed the findings of DRP before the Tribunal in ITA No.7133/Mum/2O19 (supra). The Co-ordinate Bench after examining the facts and the decision rendered in the case of CIT vs. Balaji Shipping (UK) Ltd. (supra) held as under:- "5. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 6. The short question we are now required to adjudicate is whether benefit of article 8 can be declined in respect of freight collections earned from cargo/containers loaded on slot of other vessels that the OEL, FZCO was entitled to under the joint business/pooling arrangements. 7. As learned DRP fairly accepts the issue is covered, in favour of the assessee, by Hon'ble jurisdictional High Court's judgement in the case of Balaji Shipping (supra). The mere fact that an appeal against the said judgement is pending before Hon'ble Supreme Court does not dilate the binding nature of this precedent. Once Hon'ble jurisdictional High Court takes a view, we are bound to follow the same-in letter and in spirit. Respectfully following the same,....
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....enied the claim of the Respondent by noting that the Department has filed a SLP against the decision of the Hon'ble Bombay High Court in case of Safmarine Container Line NV (suprqj and accordingly, the contention of the Respondent was rejected. 9. Findings of the CIT(A) [Para No. 12.3 at page 110-113 of the Ld. CIT(A) order] : CIT(A) notes that it is recurring issue in the Respondent's own case and accordingly, following the order of the Hon'ble Tribunal for Assessment Year 2017-18 has held that Respondent is eligible for the benefit of the Article 8 of India-UAE DTAA with respect to IHC charges earned by the Respondent. Findings of Hon'ble Tribunal for A.Y. 2017-18 : Relevant extracts of the Hon'ble Tribunal for AY 2017-18: 13. Article - 8 of DTAA deals with profits derived by operation of ships in international traffic. Clause 2(b) of Article-8 refers to profit from the rental of ship including operation of container and related equipment used in connection with operation of ships in international traffic. Though Article- 8 of India -UAE DTAA does not spell out explicitly that rental of containers include trailers a....
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....t the disposal of a person as well as the profits from the activities which are not directly connected with the acquisition of the assessee's ships. In the latter case however, the activities must be ancillary to such operations viz. the operation of ships owned, leased or otherwise at the disposal of the assessee in international traffic. It indicates that the provision also applies to the activities that permit, facilitate or support the international traffic operations. 36. As far as the first type of case is concerned viz. where the slot hire facility is availed of for carriage of goods from a port in India only up to the hub port abroad and is thereafter transshipped on vessels actually operated by the assessee up to the final destination, it is irrelevant whether slot hire agreements are considered to be directly connected with the operation of ships or not directly connected with the operation of ships by the enterprise. In such cases, the slot hire agreements are inextricably interlinked with and connected to the operation of ships by the enterprise. The first type of case would in fact be covered by paragraphs 4and 4.1 of the commentary." The Hon'....