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of <h1>Aircraft dry lease rentals under India-Ireland DTAA Article 8(1) taxable only in Ireland, no PE attribution</h1> Mumbai ITAT held that lease rentals earned by an Irish tax resident from dry leasing aircraft to an Indian airline were not taxable in India. It found no fixed place Permanent Establishment under Article 5 of the India-Ireland DTAA, as operational control and disposal of the aircraft lay exclusively with the Indian lessee, and the lessor's activities were conducted from Ireland. Even assuming a PE, the Tribunal rejected a flat 25% attribution of gross rentals for lack of a proper FAR analysis under Article 7. Interpreting Article 8(1), it ruled that rentals from aircraft forming part of a fleet used in international traffic are taxable only in the State of residence, covering passive dry leasing without requiring the lessor's operational involvement.
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