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2021 (8) TMI 329 - AT - Income TaxTaxability of receipts on hire of vessel on time charter basis - non existence of PE - receipts from the time charter of the vessel “Smit Borneo” brought to tax in its hands as ‘royalty’ - charges received on account of time charter services rendered by the Appellant for the vessel 'Smit Borneo' to Leighton India Contractors Private Limited in India were rendered for the 'use' of industrial, commercial or scientific equipment, thereby treating the same as "Royalty" under section 9(1)(vi) - Whether time charter services shall be covered within the definition of the term "Royalty" under Article 12(4) of the India - Singapore Double Tax Avoidance Agreement ('DTAA')? - HELD THAT:- As decided in own case [2020 (11) TMI 415 - ITAT MUMBAI] as the assessee had received charges on account of time charter services rendered by its vessel 'Smit Borneo' along with the crew to Leighton India Contractor Pvt. Ltd., and not for allowing the latter the 'use' or 'right to use' of industrial, commercial, or scientific equipment, the same therein cannot be treated as 'royalty' within the meaning of Article 12(3)(b) of the India-Singapore tax treaty. As such, we herein not being able to subscribe to the view taken by the lower authorities, to the extent they had concluded that the amounts received by the assessee for time charter of its vessel viz. 'Smit Borneo' was to be treated as royalty under Article 12(3)(b) of the India-Singapore tax treaty, therein vacate the same. As we have vacated the view taken by the A.O/DRP that the consideration received by the assessee from time charter of its vessel viz. 'Smit Borneo' was to be treated as 'royalty' as per Article 12 of the India-Singapore Tax Treaty, therefore, we refrain from adverting to the other contentions advanced by the ld. A.R to support its claim, which thus are left open We fallow the judicial precedence and of the substantive view that the receipts from the charter of vessel 'Smit Borneo' cannot be treated as royalty and direct the assessing officer to delete the addition as per the ratio of the decision discussed in the above paragraphs and allow the grounds of appeal in favour of the assessee. Taxability of reimbursement of expenses received by the assessee in respect of 'Smit Borneo' vessel and the contractors - HELD THAT:- We find that the relevant details and allocations are to be verified. Accordingly, we remit the disputed claim to the file of the assessing officer for limited purpose to verify and examine the facts with the evidences. The assesses should be provided adequate opportunity of hearing and shall cooperate in submitting the information and allow the grounds of appeal for statistical purpose Additional TDS credits - HELD THAT:- As assesses has submitted the supporting claim of evidences before the A.O. We are of the opinion that the assessee should not be deprived of its legitimate right for TDS credits. Accordingly, the assessing officer is directed to verify and examine the documents filed in support of TDS claim.
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