The Tax Publishers2020 TaxPub(DT) 4689 (Mum-Trib)

INCOME TAX ACT, 1961

Section 90

Assessee, based at Singapore, received charges on account of time charter services rendered by its vessel along with the crew to Indian entity and not for allowing the latter the 'use' or 'right to use' of industrial, commercial, or scientific equipment, and, therefore, same could not be treated as 'royalty' within meaning of article 12(3)(b) of the India-Singapore Tax Treaty.

Double taxation relief - Agreement between India and Singapore - Royalty under article 12(3)(b) - Receipts from time charter of vessel

Assessee, based at Singapore, was operating in the maritime sector and was primarily engaged in the business of salvage, wreck removal, environmental protection and consultancy. During the year under consideration, the assessee company had time chartered its vessel 'Smit Borneo' along with crew to M/s Leighton India Contractors (P) Ltd., for providing services for exploration or extraction of mineral oils to ('ONGC'). AO taxed receipts from time charter of vessel as 'royalty'.Held: Assessee had received charges on account of time charter services rendered by its vessel 'Smit Borneo' along with the crew to Leighton India Contractor (P) Ltd., and not for allowing the latter the 'use' or 'right to use' of industrial, commercial, or scientific equipment, and, therefore, same could not be treated as 'royalty' within meaning of article 12(3)(b) of the India-Singapore Tax Treaty.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15



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