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2021 (8) TMI 1355 - AT - Income TaxTaxability of shipping income - Income deemed to accrue or arise in India - Income being 7.5% of total freight collections derived from operation of ships in international traffic - business connection or Permanent Establishment (PE) of the Appellant in India - benefit of Article 8 of the Double Taxation Avoidance Agreement between India and UAE (Tax Treaty) - whether benefit of article 8 can be declined in respect of freight collections earned from cargo/containers loaded on slot of other vessels that the OEL, FZCO was entitled to under the joint business/pooling arrangements? - HELD THAT:- DRP fairly accepts the issue is covered, in favour of the assessee, by Hon’ble jurisdictional High Court’s judgement in the case of Balaji Shipping [2012 (8) TMI 681 - BOMBAY HIGH COURT]. The mere fact that an appeal against the said judgement is pending before Hon’ble Supreme Court does not dilate the binding nature of this precedent. Once Hon’ble jurisdictional High Court takes a view, we are bound to follow the same-in letter and in spirit. Respectfully following the same, we uphold the plea, of the assessee and direct that benefit of article 8 must be extended to entire freight receipts-irrespective of whether the earnings are relating to feeder vessels or by the ships in international traffic. The assessee gets the relief accordingly.
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