High Court of Gujarat · Judgments and reasoned final orders
M/s. Atlantic Shipping Pvt. Ltd. v. Income Tax Officer (International Taxation)
R/Tax Appeal No. 688 of 2024 with R/Tax Appeal No. 707 of 2024 and R/SCA Nos. 6595 & 6539 of 2025 ·
International shipping profits under section 172(3) and Article 8 vs. Article 24 (Limitation of Relief) of the India-Singapore DTAA: freight remitted to London bank account of Singapore tax-resident shipping principal (ST Shipping) taxed in Singapore on accrual basis is eligible for Article 8 exemption; Article 24 does not apply.
1. FACTS OF THE CASE
The appellant shipping agent filed voyage returns under section 172(3) for FY 2011-12 on behalf of its principal, ST Shipping and Transport Pte. Ltd. (a Singapore tax resident operating ships in international traffic from Indian ports including Sikka Port), claiming exemption under Article 8 of the India-Singapore DTAA. Because freight was remitted to a bank account in London rather than Singapore, the AO invoked Article 24 (Limitation of Relief) to deny Article 8 benefit despite an IRAS certificate dated 09.01.2013 confirming that ST Shipping was taxed in Singapore on worldwide shipping income on an accrual basis, and the ITAT remanded the matter to the AO.
2. DISCUSSION BY THE COURT
Following its coordinate-bench decision in CIT (International Taxation) v. M.T. Maersk Mikage ((2016) 72 taxmann.com 359 (Guj)) and Alabra Shipping Pte. Ltd. v. ITO ((2015) 62 taxmann.com 185 (Rajkot ITAT)), the Division Bench held that under Article 8(1) of the India-Singapore DTAA, profits derived by a Singapore enterprise from the operation of ships in international traffic are taxable only in Singapore and are not income 'exempt from tax in India' within the meaning of Article 24(1), particularly where IRAS certifies that the shipping income is taxed in Singapore on an accrual basis rather than a remittance basis.
3. JUDICIAL DECISION
Answering the substantial question of law in favour of the assessee and against the Revenue, the High Court quashed the ITAT's remand order in Tax Appeals No. 688 and 707 of 2024, held that Article 8 applies and Article 24 is inapplicable, and allowed SCA Nos. 6595 and 6539 of 2025 by quashing the post-remand assessment orders.
4. OUTCOME
Assessee - Substantial question of law answered in favour of the assessee; ITAT remand order and post-remand assessment orders quashed; Article 8 India-Singapore DTAA benefit upheld.
5. AKHB REVIEW POINT
AKHB analysis: where a Singapore shipping enterprise is assessed in Singapore on worldwide shipping profits on an accrual basis (evidenced by an IRAS certificate), remittance of freight to a third-country bank account (such as London) does not trigger Article 24(1) of the India-Singapore DTAA to defeat exclusive residence-state taxation under Article 8.
Source: AKHB analysis based on Paragraphs 14-24; PDF pp. 30-65
Source and verification
66-page official High Court of Gujarat judgment PDF (20251015_GJHC240457702024.pdf).
Original PDF: 66 pages · SHA-256: 77e7ce17223f08b1d6d106c5ea34eeaa373a81636f745f8a94ecca5236550d27
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies section 172 of the Income-tax Act, 1961 and Articles 8 and 24 of the India-Singapore DTAA for FY 2011-12. Income-tax Act, 2025 equivalence is not verified.
Full primary judgment PDF read page-by-page and verified against the AKHB Google Drive repository. Comprehensive subsequent judicial treatment has not been independently verified.
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