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2013 (11) TMI 1325 - AT - Income TaxEligibility for claiming any advantage under Article 8 of the India-Singapore Treaty - Assessee is in the business of sea faring cargo business having base, and tax base at Singapore. The assessee operates its ships/vessels round the world - In so far as business of the assessee with India is concerned, it operates its vessels in Singapore Chennai Sector, which is known as Madras Service Route in maritime parlance – Held that:- When two treaties between India- Brazil and between India-Singapore are compared, it is seen that article 8 is worded differently and on comparison of clause (4) of Article 8, India Brazil Treaty talks of business as such but India Singapore Treaty talks of "profits from the operation". Another difference is that India Singapore DTAA Treaty extends its arms to embrace, "any other activity directly connected with such transportation", which is not extended in the India Brazil Treaty. Taking note of this major difference in the Treaty language and taking into consideration the ratio laid down in the case of UOI v. Azadi Bachao Andolan, [reported in [2003 (10) TMI 5 - SUPREME Court], wherein the Hon'ble Apex Court held that "the provisions of the Treaty have to be applied and interpreted in a liberal manner so that the benefit contemplated for avoiding double taxation of the same income can be appropriately granted to the party". Taking into consideration the decision of Hon'ble Bombay High Court in the case of Balaji Shipping [2012 (8) TMI 681 - BOMBAY HIGH COURT], it is found that slot charter have been held to be charter per se. Even if observation is diluted that slot charter is different from charter, then the ratio of Azadi Bacho Andolan [2003 (10) TMI 5 - SUPREME Court], i.e., "expressions should be construed in the manner in which the contracting partners understood at the time of execution of treaty", prompts to hold that slot charter is charter - This lends force to observation that the inclusion of sub clauses (b), (c) and (d) to Article 8.4 is profit specified, generated from the operation of ships, aircrafts in international traffic by owner, lessess a charter ... which is directly connected with such transportation - Difference of the use of expression "business" used in India Brazil Treaty and the use of expression "transportation" in India Singapore Treaty to be noted, because as observed, the business or economy of Singapore being contracting state is founded on tourism and cargo hub connecting the entire world. Definition of the expression "operation of ship or aircraft in international traffic" in Article 3, i.e. "General Definitions", it is found that "international traffic" means "any transport by a ship or aircraft operated solely between places in the other contracting state". From the agreements, the two contracting states are India and Singapore - According to the agreements, cargo is lifted by the feeder vessel from Chennai (Madras) or an Indian port, to be taken to its mother feeder hub, either at Singapore or Srilanka, from where it is taken to its onward and final destination - On these basic facts, emerging from the agreements, the claim of the assessee comes within the precinct of Article 8 of India Singapore DTAA Treaty – Decided in favor of Assessee.
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