Benefit of Article 8 of India-Singapore DTAA shall be allowed when Vessel Handling Charges were allowed to Tax by Indian Entity: ITAT [Read Order]

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that the benefit of Article 8 of the India Singapore DTAA shall be allowed when vessel handling charges were allowed to be taxed by the Indian Entity. During the hearing, it transpires that the assessee has assailed the reassessment proceedings, inter-alia, on the legal ground that there was no escapement of income since the document as well as Vessel handling charges were already offered to tax by the Indian entity.

The assessee assails the issue on merits by relying upon Article-8 of India Singapore DTAA. The Dispute Resolution Panel (DRP) has dismissed the objections of the assessee by relying upon earlier DRP orders for AYs 2012-13, 2013-14, 2016-17 and 2017-18. The undisputed position that emerges is that the assessee assailed the final assessment order for AYs 2012-13, 2013-14, 2016-17, and 2017- 18 before this Tribunal wherein the appeals have been allowed by the Tribunal on legal grounds as well as on merits. A copy of the same has been placed. This position could not be controverted by revenue before the tribunal. The Authorized Representative pleaded that the issue is squarely covered in the assessee’s favor.

The bench concurs with the submission of the Authorized Representative that the issue on legal grounds as well as on merits is covered in the assessee’s favor and there is no change in material facts. The Two-member bench comprising of Mahavir Singh (Vice-President) and Manoj Kumar Aggarwal (Accountant member) held that the reassessment proceedings as well as the consequential assessment framed therein were unsustainable in law and accordingly, liable to be quashed. It has finally been held that the assessee would be entitled to the benefit of Article 8 of the treaty and the impugned charges would not be taxable in India in the hands of the assessee.

Therefore, facts and circumstances being the same, taking the same view, the bench allowed the legal grounds as well as grounds on merits. The appeal stands allowed which renders the stay application infructuous. The Assessing Officer was directed to re-compute the income of the assessee and allow credit of taxes in accordance with the law. Thus, the appeal was allowed.

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