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2013 (12) TMI 996 - AT - Income TaxAssessment u/s 147 r.w.s. 144C Held that:- The Article 8 of DTAA deals with shipping and air-transport business As per Article 8 profits from operation of ships or aircrafts in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated - In view of specific clause in DTAA dealing with shipping business, we are of considered opinion that income of the assessee in the present case is not taxable in India Following DIT (International Taxation) v. Venkatesh Karrier Ltd [2012 (4) TMI 76 - GUJARAT HIGH COURT] - The agreement between two countries has ousted the jurisdiction of the taxing officer in India to tax the profits derived by the enterprise once it is found that the ship belongs to a resident of the other contracting country - Circular No.333 states that the provisions made in DTAA would prevail over the general provisions of the Act and Circular no.732 clarifies that if ships are owned by an enterprise belonging to a country with which India has entered into an agreement of avoidance of double taxation and the agreement provides for taxation of shipping profits only in the country of which the enterprise is a resident, no tax is payable by such ships at the Indian ports - The income earned by the assessee is not taxable in India Decided in favour of assessee.
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