Article 8 Lost, Article 7 Won – No PE, No Tax for Mauritius Shipper

DCIT Vs Bay Lines (Mauritius) C/o. Freight Connection India P. Ltd. (ITAT Mumbai) Bay Lines, a shipping company incorporated in Mauritius, claimed that its freight income from India was exempt under Article 8 of the India–Mauritius DTAA, which provides that shipping income is taxable only in the country of effective management. The AO denied this benefit on the ground that although the company was legally resident in Mauritius, its real control & management (POEM) was exercised from Dubai (UAE) by directors/shareholders based there. Since its POEM was not in Mauritius, Article 8 could no...