SJJ Marine Private Limited Rep. by agent M/s. GAC Shipping (India) Private Limited, Nellore, Alleppey V. ITO, International Taxation, Nellore, Nellore

ITA 264/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2567 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 23-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Keywords: Double taxation relief; Additional evidence
• Section: 10

Judgement Text

ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.264/HYD/2017 (ASSESSMENT YEAR: 2014-15) M/S. SJJ MARINE PRIVATE LIMITED NELLORE PAN: AABCG 4164 H VS INCOME TAX OFFICER (INTERNATIONAL TAXATION) NELLORE (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI R. SREENIVASAN FOR REVENUE : SHRI L. RAMJI RAO, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2014-15 AGAIN ST THE ORDER OF THE CIT (A)-10, HYDERABAD, DATED 06.09 .2016. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A NON- RESIDENT COMPANY. M/S. GAC SHIPPING (INDIA) PVT. LT D, NELLORE FILED AN APPLICATION FOR GRANT OF NO OBJECTION CERT IFICATE ON 20.2.2014 ON BEHALF OF THE ASSESSEE IN RESPECT OF V ESSEL MV MARIA STAR ON RECEIPT OF WHICH, IT HAD DEPARTED FR OM KRISHNAPATNAM PORT ON 12.03.2014 TO VIETNAM WITH A CARGO OF 32700 MT OF MAIZE. THE AGREED FREIGHT RATE WAS US$ 22.75 PER M.T AND THUS THE TOTAL FREIGHT WORKED OUT TO US$ 7, 43,925.00 FOR THE VOYAGE UNDER CONSIDERATION. DATE OF HEARING : 20.09.2017 DATE OF PRONOUNCEMENT : 29.09.2017 ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 2 OF 9 3. THE LOCAL AGENT CLAIMED THAT THE FREIGHT BENEFIC IARY IS A RESIDENT OF SINGAPORE AND IN VIEW OF THE DTAA BETWE EN INDIA AND SINGAPORE, THE ENTIRE FREIGHT EARNED BY THE FREIGHT BENEFICIARY IS EXEMPT FROM TAX IN INDIA. AT THE TIME OF OBTAINING NOC, THE LOCAL AGENT FURNISHED A COPY OF THE TAX RESIDENCY CERTIFI CATE (TRC) IN RESPECT OF FREIGHT BENEFICIARY IN EVIDENCE OF THE F ACT THAT IT IS A RESIDENT OF SINGAPORE. THE LOCAL AGENT HAD ALSO FIL ED A CERTIFICATE FROM THE FREIGHT BENEFICIARY TO ENABLE THE LOCAL AG ENT ON THEIR BEHALF TO EXECUTE THE GUARANTEE BOND. AFTER VERIFIC ATION OF THE INFORMATION FILED, AN ORDER U/S 163, DATED 10.03.20 14 WAS PASSED TREATING THE LOCAL AGENT AS THE REPRESENTATIVE OF T HE ASSESSEE. SUBSEQUENTLY, A RETURN U/S 172(3) WAS FILED BY THE LOCAL AGENT ON 26.03.2014. IN VIEW OF THE ARTICLE 24 OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA & SINGAPOR E, THE AO CALLED FOR DETAILS OF NET FREIGHT PAID TO THE FREIG HT BENEFICIARY AND THE AMOUNT CREDITED TO THE BANK A/C OF THE FREIGHT BENEFICIARY OF SINGAPORE. THE LOCAL AGENT DID NOT FILE ANY OF THE INFORMATION CALLED FOR AND THEREFORE, A FURTHER REMINDER WAS IS SUED. THE REPRESENTATIVE OF THE ASSESSEE FILED THE NECESSARY INFORMATION. ON VERIFICATION OF THE DETAILS FILED, THE AO NOTICED T HAT OUT OF THE TOTAL FREIGHT OF USD 7,43,925.00, ONLY AN AMOUNT OF USD 3 ,66,175 WAS REMITTED TO THE BANK A/C OF THE FREIGHT BENEFICIARY ON 10.03.2014 MAINTAINED WITH THE KOREA EXCHANGE BANK, SINGAPORE BRANCH. HE OBSERVED THAT THE DTAA BETWEEN INDIA & SINGAPORE, H AS LIMITATION OF RELIEF CLAUSE AS MENTIONED IN ARTIC LE 24, ACCORDING TO WHICH, THE EXEMPTION OF TAX TO BE ALLOWED IS ONL Y TO THE EXTENT OF THE INCOME REMITTED TO THE RECIPIENT IN THE OTHE R CONTRACTING STATE I.E. SINGAPORE. OBSERVING THAT THE LOCAL AGEN T HAS NOT FILED EVIDENCE OF REMITTING THE BALANCE OF USD 3,77,750 A ND ALSO THAT ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 3 OF 9 THE ENTIRE AMOUNT OF USD 7,43,925 HAS BEEN OFFERED TO TAX AT SINGAPORE, TREATED THE TAXABLE FREIGHT AT USD 3,77, 750 AND BROUGHT IT TO TAX IN INDIA. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A). BEFORE THE CIT (A), THE ASSESSEE FILED THE DETAILS OF THE REMITTANCE OF US D 3,66,175 ON 10.03.2014 AND US D 50,192.36 ON 26.06.2014. THIS PROOF WAS SUBMITTED AS ADDITIO NAL EVIDENCE BEFORE THE CIT (A). THE CIT (A) CALLED FOR A REMAND REPORT FROM THE AO AND THE AO HAS SUBMITTED HIS REMAND REPORT. AFTE R CALLING FOR ASSESSEES OBJECTIONS TO THE REMAND REPORT, THE CIT (A) HELD THAT HE IS NOT ADMITTING THE ADDITIONAL EVIDENCE. THEREA FTER HE PROCEEDED TO CONFIRM THE ASSESSMENT ORDER. AGGRIEVE D BY THE SAME, THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS INITIALLY FILED EVIDENCE OF REMITT ANCE OF USD 3,66,175 ONLY TO THE ASSESSEE IN SINGAPORE BEFORE T HE AO AND THE AO HAS CONFIRMED THE ADDITION ONLY TO THE EXTENT OF THE BALANCE OF THE AMOUNT IN RESPECT OF WHICH NO EVIDENCE WAS FILE D. HE SUBMITTED THAT THE EVIDENCE OF REMITTING THE BALANC E TO THE EXTENT OF USD 3,38,246 WAS FURNISHED BEFORE THE CIT (A) AN D THE AO IN THE REMAND REPORT HAS ACCEPTED THAT THE ADDITIONAL EVIDENCE IN THE FORM OF REMITTANCE TO THE EXTENT OF USD 7,05,42 1 QUALIFIES FOR RELIEF UNDER ARTICLE 24 R.W. ARTICLE 8 OF THE DTAA BETWEEN INDIA & SINGAPORE. THEREFORE, ACCORDING TO HIM, TO THAT EXT ENT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION FROM TAX. HE PLA CED RELIANCE UPON THE DECISION OF THE COORDINATE BENCH OF THE TR IBUNAL AT ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 4 OF 9 RAJKOT IN THE CASE OF ALABRA SHIPPING PTE LTD, SING APORE IN ITA NO.392/RJT/2014 DATED 9.10.2015 AND ALSO THE DECISI ON OF THE HON'BLE GUJARAT HIGH COURT AT AHMEDABAD IN THE CASE OF M.T. MAERSK MIKAGE & 4 PETITIONER(S) VS. DIT (IT) IN SPE CIAL CIVIL APPLICATION NO.9150 OF 2014 DATED 24.08.2016 IN SUP PORT OF HIS CONTENTIONS. 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THOUGH THE ASSESSEE HAS FILED EVIDENCE FOR REMITTANCE OF USD 7 ,05,421 TO THE ASSESSEE IN SINGAPORE, IT HAS NOT FILED ANY EVIDENC E OF OFFERING THE SAME TO TAX IN SINGAPORE AND THEREFORE, THE SAME IS NOT EXEMPT FROM TAX IN INDIA AS PER ARTICLE 24 R.W. ARTICLE 8 OF THE DTAA BETWEEN INDIA & SINGAPORE. THEREFORE, THE LEARNED D R PRAYED THAT THE ORDER OF THE CIT (A) BE CONFIRMED. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE AO HAS HELD A PART OF T HE RECEIPT WHICH HAS BEEN RECEIVED BY THE ASSESSEE IN SINGAPORE AS E XEMPT FROM TAX IN INDIA AND THE BALANCE HAS BEEN BROUGHT TO TA X ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED THE PROO F OF ITS REMITTANCE TO THE ASSESSEE IN SINGAPORE. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS FURNISHED THE INFORMA TION AND THE AO IN HIS REMAND REPORT HAS ACCEPTED THE REMITTANCE OF A TOTAL OF USD 7,05,421. IT HAS NEVER BEEN THE CASE OF THE AO OR THE CIT (A) THAT THE ASSESSEE HAS NOT FILED THE EVIDENCE OF OFF ERING THE INCOME TO TAX IN SINGAPORE. IN FACT, THE AO HAS CONSIDERED THE FACT THAT THE OFFSHORE INCOME OF A SINGAPORE ENTITY IS NOT TA XABLE IN ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 5 OF 9 SINGAPORE UNLESS AND UNTIL IT IS REMITTED OR RECEIV ED IN SINGAPORE BY VIRTUE OF ARTICLE 24(1) OF INDIA-SINGAPORE DTAA. THUS, THE CONSEQUENCE OF RECEIPT IN SINGAPORE IS THAT IT IS T AXABLE IN SINGAPORE AND THAT IS THE REASON WHY THE AO HAS ACC EPTED PART OF THE REMITTANCE IN RESPECT OF WHICH THE PROOF HAS BE EN FURNISHED DURING THE ASSESSMENT PROCEEDINGS AS EXEMPT FROM TA X IN INDIA. SINCE THE ASSESSEE HAS FILED PROOF OF REMITTANCE OF A PART OF BALANCE OF THE FREIGHT CHARGES, WE ARE OF THE OPINI ON THAT THE ASSESSEE IS ENTITLED TO EXEMPTION IN RESPECT OF ONL Y THE FREIGHT CHARGES REMITTED TO SINGAPORE. IN RESPECT OF USD IN RESPECT OF WHICH, THERE IS NO PROOF OF REMITTANCE, IT HAS TO B E BROUGHT TO TAX IN INDIA. WE FIND THAT SIMILAR ISSUE HAD ARISEN BE FORE THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF M.T. MAERSK MIKAG E & 4.. PETITIONERS VS. DIT (INTERNATIONAL TAXATION) REPORT ED IN 291 CTR 184 (GUJ.), WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER: '15. THIS BRINGS US TO THE CORE ISSUE STRENUOUSLY DEBATED BY BOTH SIDES VIZ. THAT OF APPLICABILITY OF ARTICLE 8 VIS-A-VIS ARTICLE 24 OF DTAA. WE MAY QUICKLY REFR ESH THE FACTS. ST SHIPPING IS A COMPANY BASED IN SINGAPORE. THROUGH THE SHIPPING BUSINESS CARRIED OU T AT INDIAN PORTS, ST SHIPPING EARNED INCOME, ON WHIC H, IT CLAIMS IMMUNITY FROM INDIAN INCOME TAX. THE REVENUE CONTENDS THAT THE REMITTANCE OF SUCH ACCRUE D INCOME NOT HAVING TAKEN PLACE AT SINGAPORE, ARTICLE 24 WILL APPLY AND CONSEQUENTLY ARTICLE 8 PROVIDING FOR AVOIDANCE OF TABLE TAXATION WOULD NOT APPLY. 16. THE FACT, THAT THE INCOME IN QUESTION WHICH ARI SES OUT OF SHIPPING OPERATIONS BY VIRTUE OF CLAUSE- 1 OF ARTICLE 8OF THE DTAA WOULD BE TAXABLE :- 5 -: M/ S. FAR SHIPPING (SINGAPORE) PTE. LTD., REP. BY M/S. SAMSARA SHIPPING (P) LTD., ONLY IN SINGAPORE, IS NO T IN SERIOUS DISPUTE. THE MOOT QUESTION THEREFORE IS WHE THER OPERATION OF ARTICLE 8 IS OUSTED BY VIRTUE OF CLAUS E-1 OF ARTICLE 24. AS NOTED, ARTICLE-24 OF DTAA PERTAIN S TO LIMITATION OF RELIEF. UNDER CLAUSE-1 THEREOF WHERE THE AGREEMENT PROVIDES THAT THE INCOME FROM SOURCES IN ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 6 OF 9 CONTRACTING STATES (IN THE PRESENT CASE, INDIA) SHA LL BE EXEMPT FROM TAX OR TAX AT A REDUCED RATE AND UNDER THE LAWS IN FORCE IN OTHER CONTRACTING STATES (I.E. SINGAPORE), SUCH INCOME IS SUBJECT TO TAX BY REFERE NCE TO THE AMOUNT THEREOF WHICH IS REMITTED OR RECEIVED IN THAT STATE AND NOT BY REFERENCE TO THE FULL AMOUNT THEREOF THEN THE EXEMPTION OR REDUCTION OF TAX UNDE R THE AGREEMENT WOULD BE LIMITED TO SO MUCH OF THE INCOME AS IS REMITTED TO OR RECEIVED IN THAT CONTRACTING STAT E. IN PLAIN TERMS THEREFORE, IF THE INCOME IN QUESTION WA S TAXABLE IN SINGAPORE ON THE BASIS OF RECEIPT OR REMISSION AND NOT BY REFERENCE TO THE FULL AMOUNT O F INCOME ACCRUING, CLAUSE-1 OF ARTICLE 24 WOULD APPLY AND DEPENDENT ON THE FACTS OF THE CASE, EXEMPTION A S PER ARTICLE 8 EITHER IN WHOLE OR IN PART WOULD BE EXCLUDED. 17. IT IS, IN THIS CONTEXT, THAT THE CERTIFICATE DA TED 09.01.2013 ISSUED BY THE INLAND REVENUE AUTHORITY O F SINGAPORE ASSUMES SIGNIFICANCE. IN THE SAID CERTIFI CATE, AS NOTED, IT WAS CERTIFIED THAT THE INCOME IN QUEST ION DERIVED BY ST SHIPPING WOULD BE CONSIDERED AS INCOM E ACCRUING IN OR DERIVED FROM THE BUSINESS CARRIED ON IN SINGAPORE AND SUCH INCOME THEREFORE, WOULD BE ASSESSABLE IN SINGAPORE ON ACCRUAL BASIS. IT WAS ELABORATED THAT THE FULL AMOUNT OF INCOME WOULD BE ASSESSABLE TO TAX IN SINGAPORE NOT BY REFERENCE TO THE AMOUNT REMITTED TO OR RECEIVED IN SINGAPORE. IN FAC T, THE CERTIFYING AUTHORITY WENT ON TO OPINE THAT IN V IEW OF SUCH FACTS, ARTICLE 24.1 OF THE DTAA WOULD NOT BE APPLICABLE AND CONSEQUENTLY, ARTICLE 8 WOULD APPLY. 18. TO THIS LATER OPINION OF THE REVENUE AUTHORITY OF SINGAPORE, WE MAY NOT BE FULLY GUIDED SINCE IT FALL S WITHIN THE REALM OF INTERPRETATION OF THE RELEVANT CLAUSES OF DTAA. HOWEVER, IN ABSENCE OF ANY REBUTTA L MATERIAL PRODUCED BY THE REVENUE, WE WOULD CERTAINL Y BE GUIDED BY THE FACTUAL DECLARATION MADE BY THE SA ID AUTHORITY IN THE SAID CERTIFICATE AND THIS DECLARAT ION IS THAT THE INCOME WOULD BE CHARGED AT SINGAPORE CONSIDERING IT AS AN INCOME ACCRUING OR DERIVED FRO M BUSINESS CARRIED ON IN SINGAPORE. IN OTHER WORDS, T HE FULL INCOME WOULD BE ASSESSABLE TO TAX ON THE BASIS OF ACCRUAL AND NOT ON THE BASIS OF REMITTANCE. THIS CERTIFICATE WAS BEFORE THE COMMISSIONER WHILE HE PASSED THE IMPUGNED ORDER. THE CONTENTS OF THIS CERTIFICATE WERE NOT DOUBTED. IF THAT BE SO, WHAT EMERGES FROM THE RECORD IS THAT THE INCOME IN QUEST ION WOULD BE ASSESSABLE TO TAX AT SINGAPORE ON THE BASI S OF ACCRUAL AND NOT REMITTANCE. THIS WOULD KNOCK OUT TH E ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 7 OF 9 VERY BASIS OF THE ASSESSING OFFICER AND COMMISSIONE R FOR INVOKING CLAUSE-1 OF ARTICLE 24 OF DTAA. BOTH T HE AUTHORITIES CONSIDERED THE QUESTION OF REMITTANCE O F INCOME AS THE SOLE REQUIREMENT FOR INVOKING ARTICLE 24.1 OF DTAA AN INTERPRETATION WHICH ACCORDING TO U S DOES NOT FLOW FROM THE LANGUAGE USED. AS NOTED THE ESSENCE OF ARTICLE 24.1 IS THAT IN CASE CERTAIN INC OME IS TAXED BY A CONTRACTING STATE NOT ON THE BASIS OF AC CRUAL, BUT ON :- 6 -: M/S. FAR SHIPPING (SINGAPORE) PTE. L TD., REP. BY M/S. SAMSARA SHIPPING (P) LTD., THE BASIS O F REMITTANCE, APPLICABILITY OF ARTICLE 8 WOULD BE OUS TED TO THE EXTENT SUCH INCOME IS NOT REMITTED. THIS CLAUSE DOES NOT PROVIDE THAT IN EVERY CASE OF NON-REMITTANCE OF INCOME TO THE CONTRACTING STATE, ARTICLE 8 WOULD NO T APPLY IRRESPECTIVE OF TAX TREATMENT SUCH INCOME IS GIVEN. WHEN IN THE PRESENT CASE, WE HOLD THAT THE INCOME IN QUESTION WAS NOT TAXABLE AT SINGAPORE ON THE BASIS OF REMITTANCE BUT ON THE BASIS OF ACCRUAL, TH E VERY BASIS FOR APPLYING CLAUSE-1 OF ARTICLE 24 WOULD NOT SURVIVE. THE CONTENTION OF SHRI MEHTA FOR REVENUE T HAT THE CERTIFICATE OF THE SINGAPORE REVENUE AUTHORITIE S IS OPPOSED TO PROVISIONS OF SECTION 10 OF THE SINGAPOR E INCOME TAX ACT ALSO CANNOT BE ACCEPTED. THE REVENUE DOES NOT QUESTION GENUINENESS OF THE CERTIFICATE. I T CANNOT DISPUTE THE CONTENTION ON THE GROUND THAT TH E SAME ARE OPPOSED TO THE STATUTORY PROVISION. 19. BY WAY OF A REFERENCE, WE MAY NOTICE THAT THE TRIBUNAL ALSO IN CASE OF THIS VERY ASSESSEE IN CASE OF ALABRA SHIPPING PTE LTD. V. INCOME-TAX OFFICER (INTERNATIONAL TAXATION), GANDHIDHAM, REPORTED IN 6 2 TAXMANN.COM 185 HAS TAKEN A SOMEWHAT SIMILAR VIEW BY OBSERVING AS UNDER: '6. AS A PLAIN READING OF ARTICLE 24(1) WOUL D SHOW, THIS LOB CLAUSES COMES INTO PLAY WHEN (I) INCOME SOURCED IN A CONTRACTING STATE IS EXEMPT FROM TAX IN THAT SOUR CE STATE OR IS SUBJECT TO TAX AT A REDUCED RATE IN THAT SOUR CE STATE, (II) THE SAID INCOME (I.E. INCOME SOURCED IN THE CONTRACTING STATE) IS SUBJECT TO TAX BY REFERENCE T O THE AMOUNT REMITTED TO, OR RECEIVED IN, THE OTHER CONTR ACTING STATE, RATHER THAN WITH REFERENCE TO FULL AMOUNT OF SUCH INCOME; AND (III) IN SUCH A SITUATION, THE TREATY P ROTECTION WILL BE RESTRICTED TO THE AMOUNT WHICH IS TAXED IN THAT OTHER CONTRACTING STATE. IN SIMPLE WORDS, THE BENEF IT OF TREATY PROTECTION IS RESTRICTED TO THE AMOUNT OF IN COME WHICH IS EVENTUALLY SUBJECT MATTER OF TAXATION IN T HE SOURCE COUNTRY. THIS IS ALL THE MORE RELEVANT FOR T HE REASON THAT IN A SITUATION IN WHICH TERRITORIAL MET HOD OF TAXATION IS FOLLOWED BY A TAX JURISDICTION AND THE ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 8 OF 9 TAXABILITY FOR INCOME FROM ACTIVITIES CARRIED OUT O UTSIDE THE HOME JURISDICTION IS RESTRICTED TO THE INCOME REPATRIATED TO SUCH TAX JURISDICTION, AS IN THE CAS E OF SINGAPORE, THE TREATY PROTECTION MUST REMAIN CONFIN ED TO THE AMOUNT WHICH IS ACTUALLY SUBJECTED TO TAX. ANY OTHER APPROACH COULD RESULT IN A SITUATION IN WHICH AN IN COME, WHICH IS NOT SUBJECT MATTER OF TAXATION IN THE RESI DENCE JURISDICTION, WILL ANYWAY BE AVAILABLE FOR TREATY PROTECTION IN THE SOURCE COUNTRY. IT IS IN THIS BAC KGROUND THAT THE SCOPE OF LOB PROVISION IN ARTICLE 24 NEEDS TO BE APPRECIATED.' 20. UNDER THE CIRCUMSTANCES, IN OUR OPINION, ASSESS ING OFFICER AND THE COMMISSIONER COMMITTED SERIOUS ERRO R IN PASSING THE IMPUGNED ORDERS. BEFORE CLOSING, WE MAY BRIEFLY TOUCH ON ONE MORE ASPECT SOUGHT TO BE RAISED BY THE REVENUE VIZ. OF THE ACTUAL TAX BEING PAID BY THE ASSESSEE ON SUCH INCOME AT SINGAPORE. ON THE GROUND THAT SUCH INCOME IS EXEMPT FROM PAYMENT OF TAX, THE REVENUE DESIRED TO IMPOSE TAX IN INDIA. IN THIS CONTEXT, THE PETITIONER HAS RELIED ON THE DECISION OF DELHI HIGH COURT IN CASE OF EMIRATES SHIPPING LINE, FZE (SUPRA), IN WHICH IT WAS HELD THAT THE :- 7 -: M/S. FAR SHIPPING (SINGAPORE) PTE. LTD., REP. BY M/S. SAMSAR A SHIPPING (P) LTD., ASSESSEE, A UAE BASED SHIPPING COMPANY, WHOSE INCOME FROM SUCH BUSINESS WAS EXEMPT FROM TAX IN SUCH COUNTRY, WOULD STILL NOT BE LIABLE TO PAY TAX IN INDIA BY VIRTUE OF ARTICLE 8 O F THE DTAA BETWEEN THE SAID TWO COUNTRIES. IT WAS HELD TH AT A PERSON DOES NOT HAVE TO ACTUALLY PAY TAXES IN OTH ER COUNTRY TO BE ENTITLED TO BENEFIT OF DTAA. THE AO IS THEREFORE, DIRECTED TO TAX ONLY SUCH PART OF THE FREIGHT CHARGES WHICH HAVE NOT BEEN REMITTED TO THE ASSESSE E IN SINGAPORE. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 29 TH SEPTEMBER, 2017. VINODAN/SPS ITA NO 264 OF 2017SJJ MARINE P LTD NELLORE. PAGE 9 OF 9 COPY TO: 1 M/S. RANGAMANI & CO. CAS, CARD BANK BUILDING, 2 ND FLOOR, V.C.S.B ROAD, ALLEPPEY 688001 2 INCOME TAX OFFICER INTERNATIONAL TAXATION, NELLOR E 3 CIT (A)-10 HYDERABAD 4 CIT (I.T. & T.P) HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER