2012 (8) TMI 1211 - HC - Income Tax

Summary

Issues involved: Appeal u/s 260-A of the Income Tax Act, 1961 against ITAT order, interpretation of India-France DTAA, applicability of tax treaty benefits.

Summary:
1. The appeal was filed against the ITAT order dismissing the appellant's appeal related to the Assessment Year 2002-2003 under section 260-A of the Income Tax Act, 1961.
2. The main question was whether the slot charges are entitled to the benefit of the tax treaty between India and France.
3. The appeal was heard along with other appeals concerning tax treaties with the UK. The court dismissed the UK-related appeals, stating that the relevant provisions of the India-France Treaty and India-UK Treaty are similar.
4. The respondent, a French company operating ships in international traffic, claimed exemption under Article 9 of the India-France DTAA.
5. The Assessing Officer denied the benefit of the DTAA to the respondent.
6. However, the Commissioner of Income Tax (Appeals) and the Tribunal held the respondent to be entitled to the benefit of the DTAA.
7. The respondent arranged for the carriage of goods by sea from Indian ports to foreign ports using slot hire facilities.
8. The income from slot hire was a small portion of the total income earned by the respondent.
9. Article 9 of the India-France DTAA deals with the taxation of profits from the operation of ships in international traffic.
10. The court referred to a similar case involving the India-UK DTAA and held that the respondent is entitled to the benefit of Article 9(1) of the India-France DTAA.
11. Various arguments related to sections 44B, 115VB, and 172 were considered and covered in favor of the respondent.
12. The court ruled in favor of the respondent, stating that the appeal is dismissed with no order as to costs.