Arbitral Award for Offshore Supplies is Business Income, Not Taxable Under DTAA

CIT Vs Fujitsu Limited (Delhi High Court) In a significant ruling, the Delhi High Court has upheld the decision of the Income Tax Appellate Tribunal (ITAT), declaring that an arbitral award received by Fujitsu Limited, a Japan-based tax resident, for non-payment of offshore supplies constitutes business income and is therefore not taxable in India under Article 7 of the India-Japan Double Taxation Avoidance Agreement (DTAA). The judgment, delivered on November 14, 2024, by the ITAT in ITA No. 2607/Del/2022 for Assessment Year (AY) 2019-20, was challenged by the Revenue but ultimately dismisse...