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2013 (1) TMI 132 - ITAT BANGALOREShipping business of non-residents - Charterers of the ship - Beneficiary of the freight - India-Netherlands tax treaty – DTAA - Income from operation of ships - Freight beneficiary Who is the freight beneficiary - In the charter party executed by the owner of the ship (Iranian entity) and the charterer of the ship (Netherlands entity) - If the charterer (Netherlands entity) is the freight beneficiary, the relief under DTAA between India and Netherlands is available - Whereas there is no such benefit if the freight beneficiary is the owner of the Vessel, the Iranian party Held that:- As concluding from the fact of the case and Clause 14 & Clause 13 that the risk and liabilities undertaken by the charterer M/s Puyvast is only in the event of the tonnage being less than 19500 tonnes. Rising of invoice by the charterer and charging 49 Euros per m.tonn is of no relevance, since substantial portion of the freight is paid to the owner of the ship namely, the Iranian entity. Therefore, the substantial freight beneficiary is the owner of the ship, the Iranian entity and the conclusion of the revenue authorities that relief under DTAA is not allowable is justified. In favour of revenue
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