Case Law Details
ITAT Rajkot held In the case of GAC Shipping India Pvt. Ltd. vs. ITO – International Taxation that entire freight income of the assessee, which is only from operation of ships in international traffic, is taxable only in Singapore.
It was held that in order to come out of the mischief of Article 24, the onus is on the assessee is to show that the amount is remitted to, or received in Singapore, but then such an onus is confined to the cases in which income in question is taxable in Singapore on limited receipt basis rather than on comprehensive accrual basis. However in the current case it is clear that the related income is taxable in Singapore on accrual basis and not on remittance basis, such an onus does not get triggered.
Facts of the Case
The appellant filed a return in respect of MT Alabra, which is owned by Alabra Shipping Pte Ltd of Singapore (ASPL-S) and the ASPL-S is freight beneficiary in respect of the same, as an agent of ASPL-S and under section 172(3). In the course of scrutinizing this return, the Assessing Officer noticed that while the assessee has claimed the benefit of India Singapore Double Taxation Avoidance Agreement [(1994) 209 ITR (St) 1 (Indo–Singapore tax treaty), the funds were remitted to freight beneficiary’s account with The Bank of Nova Scotia in London UK. It was in this background, and noting that the freight has been remitted to a country other than Singapore and that remittance to Singapore is a sine qua non for availing the benefits of the Indo-Singapore tax treaty, that the Assessing officer proceeded to, in view of limitations of benefits set out in article 24 of India Singapore tax treaty, decline the benefits of Indo-Singapore tax treaty.
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