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2012 (8) TMI 681 - HC - Income TaxIndia-UK DTAA - income on account of slot chartering - taxable u/s 44 B OR 28 to 43 - Held that:- Section 115VB includes slot charter agreements in the phrase "operating a ship", section 115-VI draws a distinction between "operating ….... ships" on the one hand and "other ship related activities" such as slot charters on the other. Therefore "slot charters" are not considered as "operating ….... ships". In other words, a slot charter is considered to be a ship related activity but not the activity of "operating ….... ships" - On clarifying that section 115VI does not lead to the exclusion of slot charters from the ambit of the phrase "operation of ships" in Article 9 of the DTAA. Nor does section 115VB include them within the phrase in the DTAA. Chapter XII-G is of no assistance in this regard as the definitions therein appear to be for the purpose of the Chapter alone unless otherwise required. Article 9 (1) refers to "Income ... from the operation of ships ... ". Section 44B refers to profits and gains of "the business of operation of ships". The ambit of the identical phrases "operation of ships" in section 44B and Article 9(1) is the same. This conclusion is not arrived at by plucking out the three words from both the provisions and comparing them de hors the context in which they are used in the respective provisions. They are used in a similar context namely in the context of "income" [(as used in article 9(1)] or "profits and gains" (as used in section 44B) from the operation of ships. Both the provisions relate to the same subject namely taxation. The comparison between Article 9(1) and section 44B is, therefore, apposite and in accordance with the mandate of Article 3(3) of the DTAA. The words not having been defined in the DTAA must be given the meaning which they have under the laws of India relating to taxes which are the subject of the Convention. Thus as income from slot hire agreements fall within section 44B they must be held to be within the ambit of Article 9(1)- As a result of the view it is not necessary to consider the submissions as to the manner in which an international treaty must be interpreted. We are of the opinion that Article 9 of the Indo-U.K. DTAA includes slot charters/slot hire agreements as availed of and utilized in these cases - in favour of the assessee
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