Helicopter Lease Held Operating, Not Financing: Article 8 Relief Granted Under India–Ireland DTAA

Vertical Aviation No. 1 Ltd. Vs ACIT (ITAT Delhi)

ITAT Delhi: Helicopter Lease Treated as Operating Lease—Income Exempt Under India–Ireland DTAA- Leasing Not Financing – Tribunal Extends Article 8 Relief to Irish Lessors

Both assessees, Irish tax residents engaged in leasing helicopters to Indian operators, challenged assessment orders taxing lease rentals as interest/royalty under domestic law & the India–Ireland DTAA. The AO & DRP treated the leases as financial leases, denying benefit of Article 8 of the treaty.

Before ITAT, it was

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