TMI Blog2023 (9) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... n India shall be exempted from tax or taxed at a reduced rate in India and under the laws in force in Singapore, the said income is subject to tax by reference to the amount thereof which is remitted to or received in Singapore and not by reference to the full amount thereof, then the exemption or reduction of tax to be allowed under the DTAA in India shall apply to so much of the income as is remitted to or received in Singapore. Therefore, the exemption or reduction of tax to be allowed under the DTAA in India shall only apply to so much of the income as is remitted to or received in Singapore where the laws in force in Singapore provides that the said income is subject to tax by reference to the amount which is remitted or received in Singapore. When under the laws in force in Singapore, the income is subject to tax by reference to the full amount thereof, whether or not remitted to or received in Singapore, then in that case Article 24(1) would not apply. In both the cases, i.e., Citicorp Investment Bank (Singapore) (Supra) and M.T. Maersk Mikage (Supra), the Courts relied on letters/confirmation issued by the IRAS which confirmed the taxability of income in Singapore on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year 2008-09, Assessee filed on 28th September 2008 return of income declaring total income as Nil. 2. Assessee used to accept cargo for carriage internationally to and from India. In India, Assessee's agent is its wholly-owned subsidiary, 'APL India Private Limited'. Being a tax resident of Singapore in terms of Article 4(1) of India Singapore Double Taxation Avoidance Agreement ( DTAA ), Assessee sought the benefit of Article 8 of the DTAA for its gross freight earnings collected from India. Accordingly, the return of income was filed at Nil income on the ground that the gross earnings was not taxable in India in view of the provisions of the DTAA. 3. The Assessing Officer noted that Assessee had shown income in respect of 136 ships and claimed the entire freight income from these ships as exempt. The Assessing Officer observed that Assessee produced ship registration certificates of only 128 ships and not for the remaining 8 ships and, therefore, held that the freight earned from those 8 ships would not be entitled for benefit under Article 8 of the DTAA. 4. Accordingly, applying the provisions of Section 44B of the Income-tax Act, 1961 ( Act ), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as erred in not holding the impugned freight income from shipping business activity as income accrued in India ? D. Whether, in the facts and circumstances of the case and in law, the Hon'ble ITAT has erred in holding that the income arising to the assessee from operation of ships within the purview of Article 8 of the India-Singapore DTAA is not an income exempt from tax in India with respect to the source country as per Article 24 of the same DTAA without taking into account the meaning of exempt from tax under this Article being exempt from tax in the Source State (India) and reserved for taxation in the State of Residence (Singapore) which is exemplified by the use of the phrase 'shall be taxable only' in Article 8(1) of the said DTAA ? E. Whether, in the facts and circumstances of the case and in law and without prejudice to the substantial question of law raised above, the Hon'ble ITAT has erred in allowing the benefit in respect of freight receipts from 97 ships under Article 8 of the India - Singapore DTAA even though Article 8 (4) of the said DTAA requires the assessee to be the owner, lessee or a charterer of the ships ? 7. Article 24 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply to income derived by the Government of a Contracting State or any person approached by the competent authority of that -State for the purpose of this paragraph. The term Government includes its agencies and statutory bodies. Applying Article 24 to the facts of this case, where the income from sources in India shall be exempted from tax or taxed at a reduced rate in India and under the laws in force in Singapore the capital gain is subject to tax by reference to the amount thereof which is remitted to or received in Singapore and not by reference to the full amount thereof, then the exemption or reduction of tax to be allowed under this agreement in India shall apply to so much of the income as is remitted to or received in Singapore. Clause 2 of Article 24 is not relevant to the case at hand. 11. Therefore, the exemption or reduction of tax to be allowed under the DTAA in India shall only apply to so much of the income as is remitted to or received in Singapore where the laws in force in Singapore provides that the said income is subject to tax by reference to the amount which is remitted or received in Singapore. When under the laws in force in Singapore the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases also Assessee had submitted certificate issued by the IRAS. Even in the case at hand, Assessee has submitted certificate from the IRAS but the CIT (A) chose to disregard that certificate on the basis that it has been issued by an officer of the IRAS and it is a non binding opinion without any statutory authority. 10. This Court in Citicorp Investment Bank (Singapore) (Supra) has held that such certificate issued by Singapore Tax Authorities will constitute sufficient evidence for accepting the legal position. This Court while coming to such a conclusion, also relied upon in the judgment of the Hon'ble Madras High Court in the case of Commissioner of Income Tax v. Lakshmi Textile Exporters Ltd. 245 ITR 522. 11. Therefore, in our view, no substantial questions of law arise as regards the first 4 questions proposed. 12. As regards the 5th question proposed, in view of the judgment of this Court in the case of Balaji Shipping UK Ltd. (Supra), in our view, no question would arise. In another matter of Assessee which came up before this Court in Director of Income Tax (IT)-I, Mumbai v. APL Co. Pte. Ltd. [2016] 75 taxmann.com 32 (Bombay), the Court relying upon ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
