DIT v. A.P. Moller Maersk A/S

INCOME TAX ACT, 1961

--Double taxation relief--Agreement between India and DenmarkOperation of feeder --Assessee engaged in shiping operations--Benefit of article 9--In case of an assessee, based at Denmark, engaged in operation of ships in international water, earnings arising on account of use, maintenance or rental of containers from the operation of its feeder vessels was also eligible for benefit of article 9 of India-Denmark DTAA as same were having nexus with operation of ships.--Assessee was a tax resident of Denmark. It was engaged in operation of ships carrying containers on its own ships or on slot hire in international waters, an activity being covered by Article 9 of India-Denmark DTAA. AO was satisfied with regard to the assessee earning income attributable to the above activity in respect of 141 ships (cases) out of 145 ships (cases). Therefore, only the income attributable to the 4 cases which were not to the satisfaction of the AO was brought to tax. Held: Earnings in impugned 4 cases arose on account of use, maintenance or rental of containers from the operations of assessee's feeder veesels. The activity carried out with regard to four cases had nexus with the operation of ships in international traffic. Therefore, assessee would be entitled to benefit of Article 9 of India-Denmark DTAA.