Our principal's freight was exempt under Article 8, but the officer says Article 24 applies because the freight went to a London account. Who wins?
The shipowner wins on these facts. The Gujarat High Court held that the assessee is entitled to the benefit of Article 8 of the India-Singapore treaty and that Article 24, the limitation of relief clause, does not apply, quashing the Tribunal's direction to send the matter back to the Assessing Officer to verify the Singapore tax authority's certificate.
Decided by the High Court (Bhargav D. Karia J and Pranav Trivedi J) on 2025-10-15, reported as R/Tax Appeal No. 688 of 2024 with R/Tax Appeal No. 707 of 2024, R/Special Civil Application No. 6595 of 2025 and R/Special Civil Application No. 6539 of 2025 (High Court of Gujarat at Ahmedabad); appeals against the common order of the Income Tax Appellate Tribunal, Rajkot Bench dated 21 March 2024. The treaty in issue is the India-Singapore Double Taxation Avoidance Agreement.. It bears on section 172, section 172(3), section 90, section 260A, section Article 8, section Article 24 of the Income Tax Act 1961, in Presumptive Taxation & Audit, Assessment & Scrutiny and How Tax Law Is Read matters.
This is the current authority on how Article 8 of a shipping treaty operates inside a s.172(3) voyage return, and it settles the recurring Article 24 objection. The Revenue's argument was that because Singapore taxes foreign-source income on a remittance basis and the freight had been remitted to London rather than Singapore, Article 24(1) cut down the Article 8 exemption. The Court held Article 8 applicable and Article 24 inapplicable, adopting the reasoning of its own earlier decision in M.T. Maersk Mikage rather than re-analysing the Articles. Two practical points follow: the certificate of the Singapore revenue authority stating that the charter income is assessable there on an accrual basis was accepted rather than remitted for verification, and the High Court treated the Tribunal's remand as itself the error. Note that the entry is about the India-Singapore treaty; a treaty with a differently worded limitation of relief clause, or none, is a different case.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The appellants are Indian companies carrying on shipping agency services. They act as agents for principals including M/s ST Shipping and Transport Pte. Ltd., a company incorporated in Singapore and a tax resident of Singapore, engaged in the business of operating owned and chartered ships in international waters. During the financial year 2011-12 ships owned or chartered by ST Shipping performed various voyages from Indian ports, including Sikka Port, and earned income from shippers and exporters. Through the appellant agents, ST Shipping filed vessel voyage returns under s.172(3) for the vessels operating in Indian territorial waters and offered nil tax, claiming the benefit of Article 8 of the India-Singapore treaty. The Assessing Officer called for freight invoices and proof of remittance of freight to the beneficiary's bank account in Singapore, formed the view that the amount had been remitted to London in the United Kingdom rather than to Singapore, invoked Article 24 of the treaty and disallowed the Article 8 exemption. The CIT(A) declined to admit additional evidence including a certificate of the Inland Revenue Authority of Singapore and dismissed the appeal. The Tribunal, rather than deciding, restored the matter to the Assessing Officer to verify the certificate. The substantial question of law admitted by the High Court was whether the Tribunal erred in holding that the benefit of Article 8 of the India-Singapore treaty for profits from the operation of ships in international traffic is subject to the limitation in Article 24.
The tax appeals were allowed and the question of law answered in favour of the assessee and against the Revenue. The Tribunal ought not to have restored the matter to the Assessing Officer to verify the veracity of the certificate dated 9 January 2013, and in view of the Court's decision in M.T. Maersk Mikage, Article 8 is applicable on the facts (paragraph 21). The Tribunal's order, insofar as it restored the matter to the file of the Assessing Officer, was quashed and set aside, and it was held that the appellants are entitled to the benefit of Article 8 of the treaty and that Article 24 is not applicable on the facts (paragraph 22). The connected special civil applications were allowed and the assessment orders quashed and set aside in view of the decision in the tax appeals (paragraph 25).
The Court did not re-analyse Articles 8 and 24, stating expressly that it was not doing so because the same had already been considered by it in M.T. Maersk Mikage, and adopting that reasoning for the applicability of Article 8 in similar facts (paragraph 23). The route to the result was therefore that the Tribunal, having the certificate of the Singapore revenue authority before it, should have applied Article 8 rather than remitting the matter for verification of the certificate. The Court's reproduction of the Tribunal's reasoning shows what the Tribunal had done: Singapore follows a territorial system so that foreign-source income of a Singapore resident is taxed only on receipt or deemed remittance to Singapore; Article 24(1) limits relief only in respect of income taxed in Singapore on a remittance or receipt basis and has no application to income taxable there on an accrual basis; the certificate stated the charter income was derived from a business carried on in Singapore and was assessable there on an accrual basis; and the Tribunal, doubting the factual basis of that statement, had remitted the matter. It is that remand that the High Court set aside.
The order of the Tribunal so far as it relates to restoring the matter to the file of the Assessing Officer is hereby quashed and set aside and it is held that the appellants-assessee are entitled to the benefit of Articles 8 of the DTAA and Article 24 of the DTAA would not be applicable in the facts of the case.
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Handle my notice → Ask a CA on WhatsAppThe shipowner wins on these facts. The Gujarat High Court held that the assessee is entitled to the benefit of Article 8 of the India-Singapore treaty and that Article 24, the limitation of relief clause, does not apply, quashing the Tribunal's direction to send the matter back to the Assessing Officer to verify the Singapore tax authority's certificate. This was decided by the High Court (Bhargav D. Karia J and Pranav Trivedi J) and bears on section 172, section 172(3), section 90, section 260A, section Article 8, section Article 24 of the Income Tax Act 1961. It is reported as R/Tax Appeal No. 688 of 2024 with R/Tax Appeal No. 707 of 2024, R/Special Civil Application No. 6595 of 2025 and R/Special Civil Application No. 6539 of 2025 (High Court of Gujarat at Ahmedabad); appeals against the common order of the Income Tax Appellate Tribunal, Rajkot Bench dated 21 March 2024. The treaty in issue is the India-Singapore Double Taxation Avoidance Agreement.. This is the current authority on how Article 8 of a shipping treaty operates inside a s.172(3) voyage return, and it settles the recurring Article 24 objection. The Revenue's argument was that because Singapore taxes foreign-source income on a remittance basis and the freight had been remitted to London rather than Singapore, Article 24(1) cut down the Article 8 exemption. The Court held Article 8 applicable and Article 24 inapplicable, adopting the reasoning of its own earlier decision in M.T. Maersk Mikage rather than re-analysing the Articles. Two practical points follow: the certificate of the Singapore revenue authority stating that the charter income is assessable there on an accrual basis was accepted rather than remitted for verification, and the High Court treated the Tribunal's remand as itself the error. Note that the entry is about the India-Singapore treaty; a treaty with a differently worded limitation of relief clause, or none, is a different case. If it applies to you, the first step is this: File the voyage return under s.172(3) claiming the Article 8 exemption expressly, naming the treaty and the article, and identify the tax residence of the shipowner or charterer whose profits are in question.
The appellants are Indian companies carrying on shipping agency services. They act as agents for principals including M/s ST Shipping and Transport Pte. Ltd., a company incorporated in Singapore and a tax resident of Singapore, engaged in the business of operating owned and chartered ships in international waters. During the financial year 2011-12 ships owned or chartered by ST Shipping performed various voyages from Indian ports, including Sikka Port, and earned income from shippers and exporters. Through the appellant agents, ST Shipping filed vessel voyage returns under s.172(3) for the vessels operating in Indian territorial waters and offered nil tax, claiming the benefit of Article 8 of the India-Singapore treaty. The Assessing Officer called for freight invoices and proof of remittance of freight to the beneficiary's bank account in Singapore, formed the view that the amount had been remitted to London in the United Kingdom rather than to Singapore, invoked Article 24 of the treaty and disallowed the Article 8 exemption. The CIT(A) declined to admit additional evidence including a certificate of the Inland Revenue Authority of Singapore and dismissed the appeal. The Tribunal, rather than deciding, restored the matter to the Assessing Officer to verify the certificate. The substantial question of law admitted by the High Court was whether the Tribunal erred in holding that the benefit of Article 8 of the India-Singapore treaty for profits from the operation of ships in international traffic is subject to the limitation in Article 24. The matter was decided on 2025-10-15 by the High Court (Bhargav D. Karia J and Pranav Trivedi J). On those facts the High Court held as follows. The tax appeals were allowed and the question of law answered in favour of the assessee and against the Revenue. The Tribunal ought not to have restored the matter to the Assessing Officer to verify the veracity of the certificate dated 9 January 2013, and in view of the Court's decision in M.T. Maersk Mikage, Article 8 is applicable on the facts (paragraph 21). The Tribunal's order, insofar as it restored the matter to the file of the Assessing Officer, was quashed and set aside, and it was held that the appellants are entitled to the benefit of Article 8 of the treaty and that Article 24 is not applicable on the facts (paragraph 22). The connected special civil applications were allowed and the assessment orders quashed and set aside in view of the decision in the tax appeals (paragraph 25).
The Court did not re-analyse Articles 8 and 24, stating expressly that it was not doing so because the same had already been considered by it in M.T. Maersk Mikage, and adopting that reasoning for the applicability of Article 8 in similar facts (paragraph 23). The route to the result was therefore that the Tribunal, having the certificate of the Singapore revenue authority before it, should have applied Article 8 rather than remitting the matter for verification of the certificate. The Court's reproduction of the Tribunal's reasoning shows what the Tribunal had done: Singapore follows a territorial system so that foreign-source income of a Singapore resident is taxed only on receipt or deemed remittance to Singapore; Article 24(1) limits relief only in respect of income taxed in Singapore on a remittance or receipt basis and has no application to income taxable there on an accrual basis; the certificate stated the charter income was derived from a business carried on in Singapore and was assessable there on an accrual basis; and the Tribunal, doubting the factual basis of that statement, had remitted the matter. It is that remand that the High Court set aside. In the words reproduced by the source cited on this page: "The order of the Tribunal so far as it relates to restoring the matter to the file of the Assessing Officer is hereby quashed and set aside and it is held that the appellants-assessee are entitled to the benefit of Articles 8 of the DTAA and Article 24 of the DTAA would not be applicable in the facts of the case." The decision followed or applied M.T. Maersk Mikage (Gujarat High Court) — reasoning on Articles 8 and 24 expressly adopted.
It was decided by the High Court on 2025-10-15 and is reported as R/Tax Appeal No. 688 of 2024 with R/Tax Appeal No. 707 of 2024, R/Special Civil Application No. 6595 of 2025 and R/Special Civil Application No. 6539 of 2025 (High Court of Gujarat at Ahmedabad); appeals against the common order of the Income Tax Appellate Tribunal, Rajkot Bench dated 21 March 2024. The treaty in issue is the India-Singapore Double Taxation Avoidance Agreement.. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 172, section 172(3), section 90, section 260A, section Article 8, section Article 24, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The tax appeals were allowed and the question of law answered in favour of the assessee and against the Revenue. The Tribunal ought not to have restored the matter to the Assessing Officer to verify the veracity of the certificate dated 9 January 2013, and in view of the Court's decision in M.T. Maersk Mikage, Article 8 is applicable on the facts (paragraph 21). The Tribunal's order, insofar as it restored the matter to the file of the Assessing Officer, was quashed and set aside, and it was held that the appellants are entitled to the benefit of Article 8 of the treaty and that Article 24 is not applicable on the facts (paragraph 22). The connected special civil applications were allowed and the assessment orders quashed and set aside in view of the decision in the tax appeals (paragraph 25). It arises in Presumptive Taxation & Audit, Assessment & Scrutiny and How Tax Law Is Read matters, on section 172, section 172(3), section 90, section 260A, section Article 8, section Article 24 of the Income Tax Act 1961, and was decided by Bhargav D. Karia J and Pranav Trivedi J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Obtain the foreign revenue authority's certificate on the basis of taxation — accrual or remittance — before the assessment, not after; the certificate dated 9 January 2013 is what the Court held should have been acted on. Where the Assessing Officer relies on the place to which freight was remitted, answer the limitation of relief clause on its own terms: Article 24(1) restricts relief only where the income is taxed in the other State on a remittance or receipt basis. If the Tribunal remands for verification of the certificate rather than deciding, treat that as an appealable error — that is precisely what was set aside here. Cite the Gujarat High Court's earlier decision in M.T. Maersk Mikage alongside this one, since the Court adopted its reasoning rather than restating it.
Validity check could not be completed. Validity check could not be completed. The judgment was pronounced on 15 October 2025 and uploaded on 16 October 2025; I did not check whether the Revenue has taken it to the Supreme Court. The Court decided by adopting the reasoning of its own earlier decision in M.T. Maersk Mikage, which I was not able to retrieve — the indiankanoon record under that title returned only an interim notice order dated 21 July 2014 — so the underlying Article 8 and Article 24 analysis has not been read at first hand. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment runs to 66 pages and reproduces the Tribunal's order at length; the reproduced Tribunal order carries its own paragraph numbers which collide with the High Court's. A /docfragment/ query returned two entirely different passages both numbered 21 and 22 — one the Tribunal's reasoning, the other the High Court's. To establish which was which I made the fetch transcribe the raw text surrounding the operative sentence, which shows the High Court's own paragraphs 21, 22 and 23 in its short-line format, ending at paragraph 25. Only the High Court's own paragraphs 21 to 25 are cited here. The facts stated are taken from the raw text of paragraphs 3, 3.1, 3.2 and 3.3; an earlier pass that presented paragraphs 3 to 8 as tidy numbered prose was a paraphrase and was not used. The raw text of paragraph 22 carries the judgment PDF's running page-header inside the operative sentence — "restoring the matter to the NEUTRAL CITATION C/TAXAP/688/2024 JUDGMENT DATED: 15/10/2025 undefined file of the Assessing Officer". That interpolation is the page furniture and not the Court's words, and it has been removed from the key_quote; the Court's own words are otherwise consecutive and unaltered. The same running header is a second, independent confirmation of the date of judgment. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The tax appeals were allowed and the question of law answered in favour of the assessee and against the Revenue. The Tribunal ought not to have restored the matter to the Assessing Officer to verify the veracity of the certificate dated 9 January 2013, and in view of the Court's decision in M.T. Maersk Mikage, Article 8 is applicable on the facts (paragraph 21). The Tribunal's order, insofar as it restored the matter to the file of the Assessing Officer, was quashed and set aside, and it was held that the appellants are entitled to the benefit of Article 8 of the treaty and that Article 24 is not applicable on the facts (paragraph 22). The connected special civil applications were allowed and the assessment orders quashed and set aside in view of the decision in the tax appeals (paragraph 25).
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