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2016 (3) TMI 1097 - AT - Income TaxChargeability of income u/s.44B - existence of Permanent Establishment (PE) - DTAA - Held that:- We find that assessee had not claimed exemption of Article 8 of the DTAA as it was not in the shipping business.Therefore, the income of the assessee had to assessed as per the provisions of tax treaty which deals with business income.Here,we would like to mention that FAA was not justified in confirming the order of the AO holding that provisions of sec.44B of the Act would be applicable with regard to the disputed amount.Section 44 B deals with the shipping business and the AO had himself admitted that the assessee was not in shipping business.The assessee did not own or charter or took on lease any vessel or ship for the year under consideration, it was only providing container services to its various clients. Therefore, we have no hesitation to hold that provisions of section 44B were not applicable to the facts of the case under consideration. Considering the above discussion,we hold that the income of the assessee was to liable to be taxed as business income and that in absence of PE no income was taxable in India, that the provisions of section 44B were wrongly invoked by the AO. Reversing the order of the FAA, we decide effective ground of appeal in favour of the assessee.
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