INCOME TAX ACT, 1961

Section 90

Double taxation relief - Agreement between India and France - Non-resident assessee engaged in shipping business - Availability of benefit under article 9 in relation to inland haulage charges received by assessee

Assessee, based at France was engaged in shipping business in International Waters. During the year, it carried out its business activity in India through its agent and claimed benefit under article 9 of Indo-France DTAA insofar as it related to revenue earned from shipping business in International Waters. The said benefit claimed by assessee also included revenue earned from inland haulage charges (IHC). AO held that as per article 9 DTAA of only income from operation of ships in International Traffice was exempt, that being the case, activity of Inland Transportation could not be considered as Inernational Transport and benefit provided under article 9DTAA of DTAA was not available to IHC.Held: Ancillary activities connected with shipping business were also included in shipping business and, therefore, Inland Haulage charges received by assessee also formed part of shipping income from international traffic and was, therefore, covered under article 9 of Indo-France DTAA and absence of expression 'any other activity directly connected with such transportation' in India-France DTAA would not make any difference.

Followed:DIT (IT)-I v. A.P. Moller Maersk AS (2017) 392 ITR 0186 (SC) : 2017 TaxPub(DT) 638 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 44B

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