2025 (11) TMI 1851

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....ereinafter referred to as 'the Act') and assessment order dated 20.012.2024 for AY 2022-23, respectively. 1.1. Since identical issues are involved in both appeals, these appeals are taken up together for adjudication and are decided by this common order. For the sake of convenience the appeal of assessee for AY 2020-21 is taken up as a lead case, hence, facts are narrated from the said appeal. ITA No. 2672/Del/2023, AY 2020-21 2. Shri Nagesh Kumar Behl, appearing on behalf of the assessee submitted that the assessee is a tax resident of United Kingdom and has branch office in India. The assessee is engaged in the business of transportation of passenger, mail, livestock and goods by air through aircraft in International Traffic. The....

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....ssment order and prayed for dismissing appeal of the assessee. 5. Both sides heard, orders of the authorities below examined. The short issue for consideration before us, in the present appeal is: Whether the receipts on account of delivery charges are covered by Article 8 of India-UK DTAA? 6. In so far as tax residence status and activities carried out by the assessee, they are not in dispute. The income of the assessee from operation of aircraft in International Traffic is not subject to tax in India in light of the provisions of Article 8 of India-UK DTAA. Before proceeding further it would be imperative to refer to Article 8 of India-UK DTAA which deals with Air Transport: "1. Profits derived from the operation of aircraf....

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....y orders which are directly connected with the transportation of goods/mail, etc. in international traffic. 8. The Co-ordinate Bench of the Tribunal in the case of Turkish Airline Inc. vs. ACIT (supra) in identical set of facts after considering the provisions of Article 8(2)(b) of India-Turkiye DTAA held that income from delivery charges is from the activity directly connected with its air-cargo business, hence, not taxable in India. We find that provisions of Article 8(3) of India-UK DTAA are peri matria to the provisions of Article 8(2) of India-Turkiye DTAA. 9. Thus, in facts of the case and considering provisions of Article 8(3) of India- UK DTAA, we find merit in ground no. 6 of appeal, hence, the same is allowed. 10. Since, ....