M/s Seaworld Shipping & Logistics P. Ltd.,, GANDHIDHAM v. The Income Tax Officer (Inter. Taxa.), GANDHIDHAM

ITA 409/RJT/2016 | 2015-2016
Pronouncement Date: 28-11-2017 | Result: Allowed

Appeal Details

RSA Number 40924914 RSA 2016
Assessee PAN AAGCS8214E
Bench Rajkot
Appeal Number ITA 409/RJT/2016
Duration Of Justice 1 year(s) 19 day(s)
Appellant M/s Seaworld Shipping & Logistics P. Ltd.,, GANDHIDHAM
Respondent The Income Tax Officer (Inter. Taxa.), GANDHIDHAM
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2017
Appeal Filed By Assessee
Tags Intnl Taxn
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 28-11-2017
Assessment Year 2015-2016
Appeal Filed On 08-11-2016
Judgment Text
ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] ITA NO. 409/RJT/2016 ASSESSMENT YEAR: 2015-16 BP SINGAPORE PTE LTD ...........................APPELLANT [SEAWORLD SHIPPING & LOGISTICS PVT LTD- AS AGENTS] 115 RISHABH CORNER PLOT NO. 93 SECTOR 8 TAGORE ROAD GANDHIDHAM 370 021 [PAN: AAG CS8214E] VS. INCOME TAX OFFICER- INTERNATIONAL TAXATION GANDHIDHAM ........RESPONDENT APPEARANCES BY: NEERAJ AGARWAL FOR THE APPELLANT HAR GOVIND SINGH FOR THE RESPONDENT DATES OF HEARING OF THIS APPEAL : NOVEMBER 2 AND 3 2017 DATE OF PRONOUNCING THE ORDER : NOVEMBER 28 2017 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 12 TH AUGUST 2016 PASSED BY THE LEARNED COMMISSIONER (AP PEALS) UPHOLDING THE ASSESSMENT UNDER SECTION 172(4) OF TH E INCOME TAX ACT 1961 IN RESPECT OF M.V. PACIFIC RAINBOW FOR THE ASSESSMENT YEAR 2015-16. 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS : 1. THE COMMISSIONER OF INCOME TAX (APPEALS) AHM EDABAD [HEREINAFTER REFERRED TO AS 'THE CIT (A)'] ERRED IN CONFIRMING T HE ORDER OF THE INCOME TAX OFFICER (INTERNATIONAL TAXATION) GANDHIDHAM (HEREI NAFTER REFERRED TO AS 'THE ITO') DENYING APPELLANT THE BENEFIT OF THE AGREEMEN T FOR AVOIDANCE OF DOUBLE TAX BETWEEN INDIA AND SINGAPORE (HEREINAFTER REFERR ED TO AS 'DTAA'). 2. THE CIT (A) ERRED IN NOT DIRECTING ITO TO ASS ESS THE INCOME AS NIL OF FREIGHT BENEFICIARY I.E. BP SINGAPORE PTE LTD. WHIL E LOSING SIGHT OF THE FACT THAT BP SINGAPORE PTE LTD. IS A SINGAPORE TAX RESIDENT C OMPANY ENGAGED IN ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 2 OF 11 OPERATION OF SHIPS IN INTERNATIONAL TRAFFIC AND HEN CE ENTITLED TO BENEFIT OF ARTICLE 8 OF THE DTAA AND THEIR INCOME FROM OPERATION OF SH IPS IN INTERNATIONAL TRAFFIC CANNOT BE TAXED IN INDIA. 3. THE CIT (A) ERRED IN CONFIRMING THE ORDER OF I TO APPLYING ARTICLE 24 OF DTAA WHICH PROVIDES FOR LIMITATION OF RELIEF WHICH IS MADE APPLICABLE TO ONLY LIMITED CATEGORY WHICH HAVE BEEN EXEMPTED FROM PAYM ENT OF TAX AS PER DTAA OR TAXED AT REDUCED RATE AND HAS NO APPLICATION TO THE INCOME REFERRED TO IN ARTICLE 8. 4. THE CIT (A) ERRED IN CONFIRMING THE ORDER OF ITO HOLDING THAT SINCE THE FREIGHT BENEFICIARY WAS OF SINGAPORE AND HENCE FUND S OUGHT TO HAVE REMITTED TO SINGAPORE BUT FUNDS WERE NOT REMITTED TO SINGAPO RE THE BENEFIT OF DTAA CANNOT BE GRANTED. THE CIT(A) FAILED TO APPRECIATE THAT WHEN ARTICLE 24 OF DTAA HAS NO APPLICATION IT HAS NO RELEVANCE WHETHE R THE FUNDS HAVE BEEN RECEIVED BY BP SINGAPORE PTE LTD. IN SINGAPORE OR U SA OR SOMEWHERE ELSE. 5. THE CIT (A) ERRED IN NOT APPRECIATING THAT TH E ITO HAS MISINTERPRETED THE PROVISIONS OF DTAA AND THEREUPON WRONGLY HELD THAT DTAA CLEARLY STATES THAT THE FUNDS SHOULD BE REMITTED TO SINGAPORE ONLY WHIL E LOSING SIGHT OF THE FACT THAT THE SAID FREIGHT INCOME HAS BEEN OFFERED FOR T AX PURPOSE AND IN FACT CHARGED TO TAX IN SINGAPORE BY OBSERVING THAT THERE WAS NO EVIDENCE BROUGHT ON RECORD TO ESTABLISH THE ACTUAL REMITTANCE TO SIN GAPORE AND THEY OUGHT TO BE ASSESSED TO NIL INCOME IN INDIA WITH REGARD TO THE PROFITS FROM THE OPERATION OF SHIPS IN INTERNATIONAL TRAFFIC AS THEY ARE AN EN TERPRISE OF SINGAPORE. 6. THE CIT (A) ERRED IN IGNORING SETTLED POSITIO N OF LAW THAT ONCE THE INCOME HAS BEEN CHARGED TO TAX IN CONTRACTING STATE I.E. S INGAPORE IN PRESENT CASE IT IS NOT NECESSARY TO ESTABLISH THAT REMITTANCE HAS T O BE MADE OR ACTUALLY BEEN MADE TO SINGAPORE TO AVAIL BENEFIT OF DTAA. IN ANY CASE THE CIT (A) FAILED TO APPRECIATE THAT WHERE THE INCOME IS TAXABLE ON ACCR UAL BASIS ARTICLE 24 OF DTAA HAS NO SIGNIFICANCE AND THE BENEFITS OF DTAA I S APPLICABLE IRRESPECTIVE OF WHETHER REMITTANCE IS RECEIVED IN SINGAPORE OR N OT. 7. THE CIT (A) ERRED IN DISCARDING THE SUBMISSIO NS AND CASE LAW RELIED UPON BY THE APPELLANT. THE CIT (A) FAILED TO APPRECIATE THAT THE FACTS IN PRESENT CASE AND THE FACTS IN THE CASE OF ITA NO. 392/RJT/2 014 ARE IDENTICAL AND THE SAID DECISION SQUARELY APPLIES IN PRESENT CASE. 8. THE CIT(A) ERRED IN HOLDING THAT THE DOCUMENTS RELIED UPON BY THE APPELLANT ARE THE NATURE OF ADDITIONAL EVIDENCE WHI CH CANNOT BE CONSIDERED IN ABSENCE OF FORMAL APPLICATION AND BEING CERTIFICATE S FROM PRIVATE PARTIES CANNOT OVERRIDE THE FACTS HIGHLIGHTED BY THE AO OR THAT THE REMITTANCE OF FREIGHT TO SINGAPORE HAS NOT BEEN STILL EVIDENT AND HENCE CONCLUSION DRAWN BY AO IN DENYING THE BENEFIT WOULD BE JUSTIFIED. 9. THE APPELLANT SUBMITS THAT MATTER ARISING OU T OF INTERPRETATION OF DTAA CANNOT LEAD TO INITIATION OF PENALTY PROCEEDINGS U/ S 271(1 (C) OF THE ACT. ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 3 OF 11 10. THE APPELLANT CRAVES LEAVE TO ADD ALTER DE LETE MODIFY OR RESCIND ANY OF THE GROUNDS AS AND WHEN NECESSARY. 3. THE SHORT ISSUE THAT WE ARE REALLY REQUIRED TO A DJUDICATE IS WHETHER OR NOT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ASSESSEE WAS INDEED WRONGLY DECLINED THE BENEFIT OF ARTICLE 8 OF THE INDO SINGA PORE DOUBLE TAXATION AVOIDANCE AGREEMENT [(2006) 196 CTR (STAT) 177]. 4. THE ASSESSEE BEFORE US IS A SINGAPORE BASED COM PANY SAID TO BE ENGAGED IN THE BUSINESS OF INTER ALIA OPERATIONS OF SHIPS IN THE INTERNATIONAL TRAFFIC. THE ASSESSEE IS FREIGHT BENEFICIARY IN RESPECT OF A VES SEL BY THE NAME OF MT PACIFIC RAINBOW WHICH SAILED FROM VADINAR AN INDIAN PORT ON 30 TH JUNE 2014. IT WAS IN THIS BACKDROP THAT INDIAN AGENT OF THE ASSESSEE I.E. SE AWORLD SHIPPING AND LOGISTICS PVT LTD HAD FILED A RETURN UNDER SECTION 172(4) AND CL AIMED EXEMPTION UNDER ARTICLE 8 OF INDO SINGAPORE TAX TREATY OF INCOME EMBEDDED IN TH E RELEVANT FREIGHT RECEIPTS AGGREGATING TO RS 5 19 63 857. THIS CLAIM DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER. HE WAS OF THE VIEW THAT THERE IS NO EVIDEN CE TO SHOW THAT THE MONEY HAS BEEN ACTUALLY REMITTED TO SINGAPORE AND SUFFERED TH E TAX. IT SEEMS THAT AS FOR THE CLAIM OF THE ASSESSEE THAT THE MONIES THOUGH REMIT TED TO USA HAVE ACTUALLY SUFFERED TAX IN SINGAPORE THE ASSESSING OFFICER RE JECTED THE SAME AND OBSERVED THAT THIS IS NOT IN THE PURVIEW OF THE INDIAN TAX AUTHORITIES TO VERIFY THE TAX TREATMENT OF THE REMITTANCES MADE BY ANY PERSON FROM USA TO S INGAPORE AND ALSO NOT AWARE ABOUT WHETHER THE RECEIPTS WERE CONSIDERED FOR TAX AT SINGAPORE OR NOT . (AND) HENCE THE CLAIM OF THE ASSESSEE IS NOT ACCEPTABLE. . WHILE THE MAIN THRUST OF THE ASSESSEE WAS ON ARTICLE 24 OF INDO SINGAPORE TAX TR EATY THE ASSESSING OFFICER DID MENTION THAT THERE IS NO EVIDENCE TO ESTABLISH THAT THE INCOME RELATED TO THE FREIGHT RECEIPTS HAS BEEN TAXED IN SINGAPORE. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INCOME GENERATED FROM FREIGHT INCOME DEFINITEL Y IS OUTSIDE THE PURVIEW OF CHARGEABILITY IN SINGAPORE AND ON THIS BASIS AND INVOKING THE PROVISIONS OF ARTICLE 24 OF INDIA SINGAPORE TAX TREATY THE ASSESSING OFF ICER DECLINED TREATY BENEFITS TO THE ASSESSEE AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN APPEAL BEFORE US. 5 THIS APPEAL WAS FIRST TAKEN UP FOR HEARING ON 2 ND NOVEMBER 2017 AND THE RECORD OF PROCEEDINGS FOR THAT DAY READS AS FOLLOWS : 1. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING SHR I NEERAJ AGARWAL LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO HIS PETITION FOR THE ADMISSION OF ADDITIONAL EVIDENCE BY WAY OF LETTER DATED 21 ST FEBRUARY 2017 ISSUED BY THE INLAND REVENUE AUTHORITY OF SINGAPORE WHICH INTER ALIA C ERTIFIES THAT THE FREIGHT INCOME FROM INDIA HAD BEEN BROUGHT TO TAX IN SINGAPORE. H E SUBMITS THAT ONCE THIS PIECE OF ADDITIONAL EVIDENCE IS ADMITTED WHICH GOES TO THE ROOT OF THE MATTER IT WILL BE CLEAR THAT THE FREIGHT RECEIPTS TAXABILITY OF WHICH IS I MPUGNED IN APPEAL BEFORE US HAS ALREADY SUFFERED TAX IN SINGAPORE AND CANNOT THUS B E DENIED TREATY PROTECTION IN INDIA. ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 4 OF 11 2. HAVING HEARD THE LEARNED DEPARTMENTAL REPRESENTA TIVE WE DEEM IT FIT AND PROPER TO ADMIT THE ADDITIONAL EVIDENCE. ORDERED A CCORDINGLY. 3. LEARNED COUNSEL WAS THEN ASKED WHETHER THE FREIG HT RECEIPTS IN QUESTION WERE ACTUALLY SUBJECTED TO TAX IN SINGAPORE. HE REPLIES IN AFFIRMATIVE. OUR QUESTION WAS FOLLOWED UP BY AN EVEN MORE SPECIFIC QUESTION I.E. WHETHER THE ASSESSEE AVAILED THE EXEMPTION UNDER SECTION 13F OF SINGAPORE INCOME TAX ACT AND AS SUCH THE FREIGHT RECEIPTS WERE NOT ACTUALLY SUBJECTED TO TAX IN SING APORE. HE ADMITS THAT THE EXEMPTION UNDER SECTION 13 F WAS INDEED AVAILED BY THE ASSESS EE IN SINGAPORE AND THAT TO THAT EXTENT HIS EARLIER SUBMISSION WAS GIVING AN INCORR ECT IMPRESSION AND WAS RATHER TECHNICALLY WORDED. LEARNED COUNSEL ADMITS THAT THE IMPRESSION GIVEN BY THE CERTIFICATION BY THE INLAND REVENUE AUTHORITY OF SI NGAPORE THOUGH TECHNICALLY CORRECT WAS GIVING A RATHER MISLEADING IMPRESSION ABOUT THE STATUS OF ACTUAL TAXABILITY OF THE FREIGHT RECEIPTS FROM INDIA IN S INGAPORE. HE ALSO STATED THAT EVEN HE WAS NOT AWARE ABOUT THIS ASPECT OF THE MATTER UNTIL HE IN RESPONSE TO BENCHS QUESTION SOUGHT SPECIFIC INSTRUCTIONS FROM THE ASS ESSEE. LEARNED COUNSEL HOWEVER HASTENS TO ADD THAT IT WILL NOT AFFECT THE OUTCOME OF PRESENT APPEAL INASMUCH AS ALL THAT IT IS NECESSARY TO INVOKE THE TREATY PROTECTI ON IS SINGAPORES RIGHT TO TAX THE SUBJECT FREIGHT RECEIPTS AND NOT THE ACTUAL TAXABIL ITY IN SINGAPORE. HE SEEKS THE PERMISSION TO RAISE THE FORMAL PLEA TO THAT EFFECT. LEARNED COUNSEL SEEKS ONE DAYS TIME SO THAT THE BENCH MAY BE ADDRESSED ON THIS ASP ECT. 4. LEARNED COUNSELS PRAYER IS ACCEPTED AND ACCOR DINGLY THE ADJOURNMENT IS GRANTED FOR ONE DAY. THE HEARING OF THESE APPEALS W ILL RESUME TOMORROW I.E. ON 3 RD NOVEMBER 2017 SD/XX 2.11.17 SD/XX 2.11.17 RAJPAL YADAV PRAMOD KUMAR JUDICIAL MEMBER ACCOUNTANT MEMBER SD/XX 3.11.2017 NEERAJ AGARWAL (AR) 6. THE MATTER WAS THEN HEARD ON 3 RD NOVEMBER 2017. PURSUANT TO THE LIBERTY GRANTED BY US THE ASSESSEE HAS ALSO FILED WRITTEN SUBMISSIONS WHICH ARE TAKEN TO RECORD. THE ASSESSEE WAS ASKED TO ARGUE THE MATTER ON THE FIRST PRINCIPLES SINCE IN ALL THE JUDICIAL PRECEDENTS CITED BY THE LEARNED CO UNSEL AUTHORITIES HAVE PROCEEDED TO ACCEPT WITHOUT ANY QUESTION OR DOUBT THE CLAIM OF THE ASSESSEE THAT THE RELEVANT INCOME HAS BEEN SUBJECTED TO TAX IN SINGAPORE - A CLAIM WHICH FOR THE DETAILED REASONS WE WILL SET OUT IN A SHORT WHILE WE HAVE R ESERVATIONS ON. WE WILL DEAL WITH THESE JUDICIAL PRECEDENTS A LITTLE LATER. LEARNED C OUNSELS FIRST PLEA IS THAT THE PROVISIONS OF ARTICLE 24 OF INDIA SINGAPORE TAX TRE ATY CANNOT BE INVOKED ON THE FACTS OF THE PRESENT CASE FOR THE ELEMENTARY REASON THAT THE INDIAN SHIPPING INCOME OF THE SINGAPOREAN ASSESSEE TO QUOTE THE WORDS OF THE LEA RNED COUNSEL IS NEITHER EXEMPT FROM TAX IN INDIA NOR TAXED AT REDUCED RATE IN INDI A. HE THEN GOES ON TO DISCUSS THE DIFFERENCE BETWEEN AN INCOME EXEMPT FROM TAX AND AN INCOME WHICH TAXABLE ONLY IN ONE OF THE CONTRACTING STATE. HE THEN REFERS TO ARTICLE 20 21 AND 22 WHICH USE THE EXPRESSION EXEMPT FROM TAX IN THE CONTEXT OF STUD ENTS AND TRAINEE AND TEACHERS ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 5 OF 11 AND RESEARCHERS. WE ARE URGED TO COMPARE THE EXPRES SION EMPLOYED IN THESE THREE ARTICLES WITH THE EXPRESSION EMPLOYED IN ARTICLE 8 WHICH MERELY SAYS THAT THE PROFITS DERIVED BY AN ENTERPRISE OF A CONTRACTING STATE FRO M THE OPERATION OF SHIPS OR AIRCRAFT IN INTERNATIONAL TRAFFIC SHALL BE TAXABLE ONLY IN T HAT STATE. ESSENTIALLY THEREFORE THIS INCOME CANNOT BE TREATED AS EXEMPT FROM TAX IN INDI A AS INDIA DOES NOT HAVE THE RIGHT TO TAX IT AT ALL AND SINCE IT IS NOT AN INCO ME EXEMPT FROM TAX IN INDIA ARTICLE 24 OF INDIA SINGAPORE TAX TREATY CANNOT AT ALL BE INVO KED. LEARNED COUNSEL THEN RELIES UPON AN ORDER PASSED BY THE TRIBUNAL IN THE CASE OF APL CO PTE LTD VS CIT [(2017) 78 TAXMANN.COM 240 (MUM)] IN SUPPORT OF THIS PROPOSITION. LEARNED COUNSEL TH EN SUBMITS THAT THE INCOME IN QUESTION IS TAXABLE ON A CCRUAL BASIS AND NOT ON RECEIPTS BASIS AND FOR THIS SHORT REASON ALONE ARTICLE 24 OF INDO SINGAPORE TAX TREATY DOES NOT COME INTO PLAY AT ALL. HE THEN SUBMITS THAT BA SED ON THE CERTIFICATE ISSUED BY THE INLAND REVENUE AUTHORITY OF SINGAPORE REGARDING SH IPPING INCOME BEING BROUGHT TO TAX ON ACCRUAL BASIS THIS VERY BENCH OF THE TRIBUN AL IN THE CASE OF ALABRA SHIPPING PTE LTD VS ITO [(2015) 62 TAXMANN.COM 185] HAS UPHELD TREATY ENTITLEMENT OF THE SINGAPOREAN SHIPPING COMPANIES IN INDIA WHICH HAS NOW BEEN CONFIRMED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF MT MAERSK MIKAGE VS DIT [(2016) 72 TAXMANN.COM 359 (GUJ)]. LEARNED COUNSEL THEN REFERS APPARENTLY TREATING T HE EXPRESSIONS LIABLE TO TAX AND SUBJECT TO TAX AS SYNONYMOUS TO HONBLE GUJARAT HIGH COURTS JUDGMENT IN THE CASE OF DIT VS VENKATESH KARRIER LTD [ (2012) 349 ITR 124 (GUJ)] AND EMIRATES SHIPPING LINE FZE VS ADIT [(2012) 349 ITR 493 (DEL)] UPHOLDING TREATY PROTECTION FROM UAE SHIPPING COM PANIES EVEN THOUGH BEYOND ANY DISPUTE OR CONTROVERSY THESE SHIPPING C OMPANIES DID NOT PAY ANY TAXES IN UAE EITHER. IT IS THUS CONTENDED THAT THE PAYMEN T OF TAX IS NOT A CONDITION PRECEDENT FOR AVAILING THE TREATY BENEFIT. LEARNED COUNSEL THEN REFERS TO HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF UNION OF INDIA VS AZADI BACHAO ANDOLAN [(2003) 276 ITR 370 (SC)] AND SPECIFICALLY REFERS TO THE OBSERVATION MADE THEREIN TO THE EFFECT THAT TO THE EXTENT AN EXEMP TION IS AGREED TO ITS EFFECT IN PRINCIPLE IS INDEPENDENT OF BOTH WHETHER THE OTHER CONTRACTING STATE IMPOSES A TAX IN A SITUATION TO WHICH THE EXEMPTION APPLIES AND OF W HETHER THE STATE ACTUALLY APPLIES THE TAX AND THAT THE TREATY NOT ONLY PREVENT CURR ENT BUT ALSO POTENTIAL DOUBLE TAXATION. LEARNED COUNSEL THUS URGES US TO HOLD T HAT THE BENEFIT OF ARTICLE 8 OF INDIA SINGAPORE TAX TREATY ARE ADMISSIBLE TO THE ASSESSEE ON THE FACTS OF THIS CASE AND THAT ACCORDINGLY HIS INCOME SHOULD NOT BE HELD T O BE TAXABLE IN INDIA. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND POI NTS OUT THAT THE JUDICIAL PRECEDENTS IN FAVOUR OF THE ASSESSEE WERE OBTAINED WITH THE HELP OF MISREPRESENTATION OF FACTS AND THE JUDICIAL PRECED ENTS SO OBTAINED CANNOT HAVE ANY PRECEDENCE VALUE. IT IS POINTED OUT THAT IN THESE J UDICIAL PRECEDENTS THE ASSESSEE HAD ALL ALONG GIVEN THE IMPRESSION THAT THE INCOME IN QUESTION HAS BEEN TAXED IN SINGAPORE AND EVIDENCE IN SUPPORT OF THIS PROPOSITI ON WERE ALSO FILED AND YET AS IT HAS NOW COME OUT IN OPEN NO TAXES WERE ACTUALLY PA ID IN SINGAPORE EITHER. THE ASSESSEE HAS NOW ACCEPTED THAT THE INCOME IN QUESTI ON WAS AS A RESULT OF AN INCENTIVE PROVISION IN SINGAPOREAN LAW NOT TAXABLE IN SINGAPORE. WHEN ASSESSEE HIMSELF ACCEPTS THAT THE INCOME IN QUESTION WAS EXE MPT FROM TAX IN SINGAPORE IT CANNOT BE SAID TO BE HAVE BEEN SUBJECTED TO TAX IN SINGAPORE. THESE EVIDENCES AT THE MINIMUM WERE MISLEADING AND AIMED AT CREATING A WRONG IMPRESSION ABOUT THE SINGAPOREAN TAXABILITY OF INCOME IN QUESTION. HE PO INTS OUT THAT IT IS FOR THE FIRST TIME AND AS A RESULT OF SPECIFIC QUESTIONS BY THE BENCH THAT THE FACT OF THIS INCOME BEING ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 6 OF 11 EXEMPT FROM TAX IN SINGAPORE HAS COME TO THE LIGHT NOW. HE SUBMITS THAT LOOKING TO THE SCHEME OF THE INDO SINGAPORE TAX TREATY WHICH SPECIFICALLY STATES THAT ONLY SUCH INCOME CAN BE GIVEN TREATY BENEFIT IN INDIA WHICH H AS SUFFERED TAX IN SINGAPORE- AS EVIDENT FROM ARTICLE 24 AN INCOME WHICH IS NOT TAX ED IN SINGAPORE CANNOT BE GRANTED TAX EXEMPTION IN INDIA. LEARNED DEPARTMENTAL REPRE SENTATIVE RELIES UPON THE STAND OF THE AUTHORITIES BELOW AND AS IF TAKING A CUE F ROM THE OBSERVATIONS MADE BY US FROM THE BENCH SUBMITS THAT ARTICLE 24 AT LEAST MA KES IT CLEAR THAT WHAT HAS NOT ACTUALLY SUFFERED TAX IN ONE COUNTRY CANNOT AT ALL BE ALLOWED TREATY BENEFIT IN THE OTHER COUNTRY AND FOR THIS SHORT REASON ALONE THE ASSE SSEE CANNOT BE ALLOWED TREATY BENEFIT IN INDIA. HE SEEKS LIBERTY TO FILE THE WRIT TEN SUBMISSION ON THE BASIS OF INPUTS FROM THE INTERNATIONAL TAXATION WING AND IN ANY C ASE SUBMITS THAT AS EVIDENT FROM THE QUESTIONS PUT BY THE BENCH- WHICH LEARNED COUNS EL HAS NOT BEEN ABLE TO ANSWER THESE PLEAS ARE NOT SUSTAINABLE IN LAW. WE ARE URGE D TO CONFIRM THE STAND OF THE AUTHORITIES BELOW AND DECLINE TO INTERFERE IN THE M ATTER. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DUL Y CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. WE MAY BEGIN BY REPRODUCING THE CERTIFICATES OBTAINED BY THE ASSESSEE FROM THE KPMG AND THE INLAND REVENUE AUTHORITY OF SINGAPORE WHICH READ AS FOLLOWS: 1. CERTIFICATE FROM THE KPMG SERVICES PTE LTD 20 FEBRUARY 2017 . WE ISSUE THIS CLARIFICATION IN THE CAPACITY AS TAX ADVISORS TO BP SINGAPORE PTE LTD. BASED ON THE AUDITOR'S CERTIFICATION DATED 14 JUNE 2016 THAT THE FREIGHT INCOME OF BP SINGAPORE PTE LTD (AS SPECIFIED PREVIOUSLY IN APPENDIX 1 OF OUR FETTER DATED 24 JUNE 2016) FOR THE FINANCIAL YEARS ENDED DECEMBER 2014 AND DECEMBER 2015 HAVE BEEN INCLUDED AS PART OF THE COM PANY'S PROFITS IN THE RESPECTIVE FINANCIAL YEARS WE CONFIRM THAT SUCH FR EIGHT INCOME HAS BEEN LIABLE TO SINGAPORE INCOME TAX AND HAS BEEN INCLUDED IN TH E SINGAPORE INCOME TAX RETURNS FOR THE YEARS OF ASSESSMENT 2015 AND 2016 R ESPECTIVELY. 2. CERTIFICATE FROM INLAND REVENUE AUTHORITY OF SIN GAPORE .. DATE: 21/02/17 I REFER TO YOUR EMAILS DATED 10 AND 13 FEBRUARY 201 7 AND OUR TELEPHONE CONVERSATION ON 13 FEBRUARY 2017 IN RESPECT OF YOUR REQUEST FOR CONFIRMATION THAT THE FREIGHT INCOME RECEIVED FROM INDIA HAD BEE N SUBJECT TO TAX IN SINGAPORE. SECTION 10(1)(A) OF THE SINGAPORE INCOME TAX ACT (S ITA) PROVIDES THAT TAX SHALL BE PAYABLE UPON THE INCOME OF ANY PERSON ACCRUING I N OR DERIVED FROM SINGAPORE OR RECEIVED IN SINGAPORE FROM OUTSIDE SIN GAPORE IN RESPECT OF GAINS OR PROFITS FROM ANY TRADE BUSINESS PROFESSION OR VOCATION. AS SUCH WHERE THE ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 7 OF 11 INCOME IS ACCRUING IN OR DERIVED FROM SINGAPORE IT WOULD BE TAXED IN SINGAPORE EVEN IF IT IS NOT REMITTED INTO SINGAPORE . IN THIS REGARD WE UNDERSTAND THAT THE FREIGHT INCOME RECEIVED FROM IN DIA HAD BEEN ACCRUED IN/ DERIVED FROM SINGAPORE. IN COMPLIANCE WITH SINGAPOR E TAX LAWS THE FREIGHT INCOME HAD BEEN BROUGHT TO TAX IN SINGAPORE ON AN A CCRUAL BASIS IN THE RELEVANT YEARS EVEN THOUGH IT HAD NOT BEEN REMITTED INTO SINGAPORE. YOU HAVE REQUESTED FOR US TO CONFIRM THAT THE FREIG HT INCOME RECEIVED FROM INDIA HAD BEEN TAXED IN SINGAPORE. IN RELATION TO T HIS WE HAVE REVIEWED THE INFORMATION PROVIDED AND CONFIRM THAT THE FREIGHT I NCOME RECEIVED FROM INDIA HAD BEEN BROUGHT TO TAX IN SINGAPORE IN THE YEARS O F ASSESSMENT ('YA') 2015 (BASIS PERIOD: 1 JANUARY 2014 TO 31 DECEMBER 2014) AND 2016 (BASIS PERIOD: 1 JANUARY 2015 TO 31 DECEMBER 2015). WE TRUST THE ABOVE IS SUFFICIENT FOR YOUR REQUIREME NTS. 7. THESE CERTIFICATES GIVE AN IMPRESSION THAT THE F REIGHT INCOME RECEIVED FROM INDIA HAS BEEN SUBJECTED TO TAX IN SINGAPORE. IN RE SPONSE TO ASSESSEES REQUEST FOR CONFIRMING THAT FREIGHT INCOME RECEIVED FROM INDIA HAS BEEN TAXED IN SINGAPORE THE IRAS HAS STATED THAT BASED ON THEIR REVIEW OF INFO RMATION SUPPLIED BY THE ASSESSEE THE FREIGHT INCOME RECEIVED FROM INDIA HAS BEEN BR OUGHT TO TAX IN SINGAPORE. LET US CONSIDER THIS IS IN THE LIGHT OF THE FACTUAL POSITI ON ADMITTED BEFORE US TO THE EFFECT THAT THE ASSESSEE HAS AVAILED EXEMPTION UNDER SECTION 13 F OF THE SINGAPORES INCOME TAX ACT AND TO THAT EXTENT THE INCOME EMBEDDED I N THESE RECEIPTS HAS NOT ACTUALLY BEEN TAXED IN SINGAPORE. WHEN LEARNED COUNSEL IS CO NFRONTED WITH THIS GLARING CONTRADICTION HE SUBMITS THAT A MERE EXEMPTION OF INCOME IN SINGAPORE DOES NOT TAKE THAT INCOME OUT OF THE AMBIT OF INCOME LIABLE TO BE TAXED IN SINGAPORE AND IT WILL BE ELIGIBLE FOR TREATY BENEFITS NEVERTHELESS. WE WI LL TAKE UP THESE LEGAL NICETIES A LITTLE LATER BUT STAYING WITH THE FACTUAL ASPECT OF THE MA TTER IT IS NOT IN DISPUTE THAT THE INCOME EMBEDDED IN THE FREIGHT RECEIPTS FROM INDIA WAS NOT ACTUALLY SUBJECTED TO TAX IN SINGAPORE EVEN THOUGH IT WAS LIABLE TO BE TAXED THERE BY THE VIRTUE OF FISCAL DOMICILE OF THE ASSESSEE. TO PUT A QUESTION TO OURS ELVES IS IT WHAT IS ACTUALLY CONVEYED BY THE CERTIFICATES ISSUED BY THE INLAND R EVENUE OF AUTHORITY OF SINGAPORE OR THE PUBLIC ACCOUNTING FIRM KPMG. WE DO NOT THI NK SO. KMPG CERTIFICATE TALKS ABOUT TAXATION OF ACCRUAL BASIS UNDER SECTION 10(1) OF THE SINGAPORE INCOME TAX ACT WITHOUT ANY FIRM COMMENTS ON ACTUAL TAXABILITY AND IRAS CERTIFICATE RELYING UPON THE INFORMATION FURNISHED BY THE ASSESSEE CONFIRMS THAT THE SAID INCOME HAS BEEN BROUGHT TO TAX IN SINGAPORE. BRINGING AN INCOME T O TAX IN SINGAPORE TO A LAYMAN AND EVEN TO JUDICIAL OFFICERS LIKE US WITH CUMULATI VE EXPERIENCE OF OVER 33 YEARS IN THE INCOME TAX APPELLATE TRIBUNAL ITSELF SUGGESTS AN INCOME BEING ACTUALLY TAXED IN SINGAPORE BUT THIS IS ADMITTEDLY NOT THE CORRECT POSITION. THE SAID INCOME WAS NEVER ACTUALLY TAXED IN SINGAPORE. WHAT THESE CERTI FICATES MISS OUT IS THE VITAL FACT THAT THE SAID INCOME WAS NEVER ACTUALLY TAXABLE IN SINGAPORE- THOUGH BY THE VIRTUE OF A SPECIFIC INCENTIVE PROVISION. UNDOUBTEDLY BY THE VIRTUE OF THE ASSESSEE BEING FISCALLY DOMICILED IN SINGAPORE THE SAID INCOME WA S LIABLE TO TAX BUT THEN LIABLE TO TAX IS NOT THE SAME THING AS SUBJECT TO TAX. ELA BORATING UPON IMPORTANT DIFFERENCE BETWEEN THE SCOPE OF THESE TWO IMPRESSIONS HONBLE AUTHORITY FOR ADVANCE RULING IN THE CASE OF GENERAL ELECTRIC PENSION TRUST IN RE [(2006) 280 IT R 425 (AAR)] HAS OBSERVED THAT IT IS WORTH POINTING OUT THAT THE PHRASE 'LIABLE TO TAX IN PARA ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 8 OF 11 1 AND THE PHRASE 'SUBJECT TO TAX IN PROVISO (B) AR E NOT SYNONYMOUS. IF BOTH WERE TO BE READ AS SYNONYMOUS PROVISO (B) WOULD BE COME OTIOSE . THERE CANNOT BE ANY DISPUTE OR CONTROVERSY ON THIS PROPOS ITION AND WE ARE CONSIDERED AGREEMENT WITH THESE OBSERVATIONS OF THE AUTHORITY OF ADVANCE RULING. AS REGARDS LEARNED COUNSELS RELIANCE UPON THE JUDICIAL PRECED ENTS IN THE CASES OF AZADI BACHAO ANDOLAN (SUPRA) VENKATESH KARRIER (SUPRA) AND EMIRATE SHIPPING LINES (SUPRA) THESE WERE THE CASES IN WHICH THE EXPRESSION LI ABLE TO TAX IN THE CONTEXT OF ARTICLE 4(1) OF INDIA UAE DOUBLE TAXATION AVOIDANCE AGREEMENT AND INDIA MAURITIUS DOUBLE TAXATION AVOIDANCE AGREEMENT WHICH APPEARED ALONGWITH THE WORDS 'BY REASON OF DOMICILE RESIDENCE PLACE OF MANAGEMENT PLACE OF INCORPORATION OR ANY OTHER CRITERION OF SIMILAR NATURE. THESE DTAAS ARE QUITE DIFFERENT FROM THE ONE THAT WE ARE DEALING WITH INASMUCH AS THE EMPHASIS ON SU BJECT TO TAX IN THE INDIA SINGAPORE DTAA IS CLEAR AND UNAMBIGUOUS AND ARTICL E 24 LEAVES NO DOUBT ABOUT THIS UNDERLYING THRUST OF THE DOUBLE TAXATION AVOID ANCE AGREEMENT. AS TO WHAT IS THE SCOPE OF SUBJECT TO TAX WE FIND GUIDANCE FROM UK S HMRC INTERNATIONAL MANUAL ( HTTPS://WWW.GOV.UK/HMRC-INTERNAL-MANUALS/INTERNATIO NAL-MANUAL/INTM162090 ) WHICH INTER ALIA STATES THAT IT SHOULD BE NOTED THAT THE TERM SUBJECT TO TAX IS DIFFERENT FROM BEING LIABLE TO TAX. LIABLE TO TAX MEANS THAT THE CUSTOMER ONLY NEEDS TO BE WITHIN THE GENERAL SCOPE OF TAX IN THE UK.. ON THE OTHER HAND SUBJ ECT TO TAX MEANS THAT THE RELEVANT INCOME HAS TO BE ACTUALLY TAXABLE AND THE CUSTOMER CANNOT BE EXEMPT FROM TAX ON THAT INCOME. 8. CLEARLY THEREFORE THE RELIEF GRANTED IN THE JU DICIAL PRECEDENTS IN QUESTION MAY HAVE BEEN BASED ON AN ERRONEOUS IMPRESSION OF THE F ACT REGARDING ACTUAL TAXABILITY IN SINGAPORE OF THE INCOME EMBEDDED IN THE FREIGHT RECEIPTS FROM INDIA PARTICULARLY AS THE INCOME WAS ACTUALLY EXEMPT FROM TAX IN SINGA PORE AS WELL. AS A MATTER OF FACT WHEN THE ISSUE REGARDING NON-TAXABILITY OF THIS INC OME IN SINGAPORE WAS RAISED BEFORE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF MT MERSEK MIKAGE (SUPRA). THEIR LORDSHIPS DECLINED TO DEAL WITH THIS ASPECT O F THE MATTER AS IT WAS BEING RAISED BEFORE THEIR LORDSHIPS FOR THE FIRST TIME BUT THEN THEIR LORDSHIPS SPECIFICALLY LEFT THIS ISSUE OPEN TO BE DECIDED IN AN APPROPRIATE CASE BY OBSERVING AS FOLLOWS: 21. BEFORE CLOSING WE MAY BRIEFLY TOUCH ON ONE MORE ASPECT SOUGHT TO BE RAISED BY THE REVENUE VIZ. OF THE ACTUAL TAX BEING PAID BY THE ASSESSEE ON SUCH INCOME AT SINGAPORE ON THE GROUND THAT SUCH INCOME IS EXEMPT FROM PAYMENT OF TAX THE REVENUE DESIRED TO IMPOSE TAX I N INDIA. . 22. IN THE PRESENT CASE HOWEVER WE ARE NOT INCLIN ED TO CONCLUDE THIS ISSUE SINCE THIS WAS NOT EVEN A GROUND ON WHICH EITHER TH E ASSESSING OFFICER OR THE COMMISSIONER HAS REFUSED TO GRANT THE BENEFIT TO TH E PETITIONER. IT IS A GROUND SOUGHT TO BE RAISED FOR THE FIRST TIME BEFORE US BY THE REVENUE FOR WHICH NEITHER FULL FACTUAL EVIDENCE NOR LEGAL FOUNDATION IS LAID. WE LEAVE SUCH AN ISSUE OPEN TO BE DECIDED IN THE APPROPRIATE CASE. 9. AS REGARDS THE PLEA THAT ASSESSEES INCOME EMBE DDED IN FREIGHT RECEIPTS FROM INDIA IS NOT EXEMPT FROM TAX IN INDIA SUCH A PLEA IS CONTRARY TO THE SCHEME OF THEE INDIA SINGAPORE TAX TREATY. WHILE ASSIGNING ME ANING TO A TERM EMPLOYED IN THE ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 9 OF 11 TAX TREATY ONE MUST NOT LOSE SIGHT OF ARTICLE 3(2) WHICH GIVES PRIMACY TO THE CONTEXT IN WHICH THE TERM IS USED. ELABORATING UPON THIS PR INCIPLE A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF HINDALCO INDUSTRIES LIMITED VS ACIT [(2005) 94 ITD 242 (MUM)] IN PARAGRAPH 18 THEREOF HAD OBSERVED THAT . THE PURPOSE OF THE RELEVANT PROVISION IN THE TAX TREATY IS INDEED ONE OF THE RELEVANT CONSIDERATIONS IN DECIDING THE CONTEXTUAL MEANING. SECOND EVEN IF IT IS DEBATABLE AS TO WHETHER CONTEXTUAL MEANING OF A TERM HAS PRECEDENCE OVER THE DOMESTIC TAX LAW MEANING OF THAT TERM IT IS ALSO CERTAINLY NOT ANYBODYS CASE THAT DOMESTIC LAW MEANING OF A TERM WILL HAVE PRECEDENCE OVER THE CONTEXTUAL MEANING OF THAT TERM; THE DISPUTE IS ONLY WITH REGARD TO WHETH ER AN INTERPRETATION SEEKING ADOPTION OF CONTEXTUAL MEANING OR TREATY MEANING A S LEARNED AUTHORS PUT IT HAS TO ONUS TO DEMONSTRATE THAT SUCH A MEANING MUST BE ADOPTED IN THE PRESENT CONTEXT . THE EXPRESSION EXEMPT FROM TAX IS AN UNDEFINED TERM IN THE TREATY AND THE CONTEXT IN WHICH IT IS USED IN ARTIC LE 24 IS THAT WHEN AN INCOME IS GRANTED AN EXCLUSION FROM TAXABLE INCOME IN ONE OF THE CONTRACTING STATE OR TAXED AT A LOWER RATE IN ONE OF THE CONTRACTING STATE SUCH AN EXCLUSION MUST DEPEND ON ITS STATUS OF TAXABILITY IN THE OTHER CONTRACTING STATE . THE CONTEXT IN WHICH EXPRESSION EXEMPT FROM TAX IS SET OUT IN ARTICLE 24 IT ESSE NTIALLY IMPLIES THAT THE TREATY BENEFIT OF NON-TAXATION OF AN INCOME OR ITS BEING TAXED AT A LOWER RATE IN A CONTRACTING STATE DEPENDS ON THE STATUS OF TAXABILITY IN ANOTHER CONT RACTING STATE. IN SUCH A SITUATION TO HOLD THAT ONLY INCOME COVERED BY ARTICLE 20 21 AND 22 CAN BE SAID TO BE EXEMPT IN THE SOURCE STATE BECAUSE THE EXPRESSION EXEMPT FRO M TAX IS USED THEREIN IS PLAINLY CONTRARY TO THE CONTEXT IN WHICH EXPRESSION EXEMPT FROM TAX IS USED; IT IS THE NET EFFECT NOT THE WORDING WHICH IS RELEVANT IN THE PRE SENT CONTEXT. IN ANY CASE WHAT IS REFERRED TO AS EXEMPTION UNDER ARTICLE 20 21 AND 2 2 OF INDO SINGAPORE TAX TREATY IN THE SOURCE COUNTRY ARE CONDITIONAL EXEMPTIONS SUBJE CT TO THE RIDERS WHEREAS AN INCOME EXEMPT UNDER ARTICLE 8 IS PLAIN VANILLA PROV ISION. WHETHER AN INCOME IS TAXED ONLY IN THE RESIDENCE COUNTRY OR WHETHER AN INCOME IS EXEMPT FROM TAX IN THE SOURCE COUNTRY THE EFFECT ON EXEMPTION OF INCOME IN THE S OURCE COUNTRY IS THE SAME- PARTICULARLY IN THE CONTEXT OF THE TREATY BENEFIT B EING DEPENDENT ON THE TAXATION INN THE RESIDENCE COUNTRY IS CONCERNED. THE WORDINGS MA Y DIFFER BUT THE IMPACT IS THE SAME AND THAT IS ALL THE MORE CLEAR WHEN SEEN IN T HE CONTEXT IN WHICH THE ISSUE ARISES. EVEN IF THE MEANING CANVASSED BY THE LEARNE D COUNSEL WAS TO BE DEFINED IN THE STATUTE OR THE TREATY ITSELF IN VIEW OF THE CO NTEXTUAL REQUIREMENTS SUCH A MEANING WAS TO BE DISCARDED IN THE PRESENT CONTEXT. HAVING SAID THAT WE ARE AWARE THAT THERE IS A DIVISION BENCH WHICH HAS TAKEN A CONTRARY VIEW ON THE BASIS OF A VERY ERUDITE ANALYSIS OF THE TREATY PROVISIONS BUT WITHOUT TAK ING INTO ACCOUNT THE PROVISIONS OF ARTICLE 3(2) AND BINDING JUDICIAL PRECEDENT ON THE SAME. WHILE WE HAVE HIGHEST RESPECT AND REVERENCE FOR THE VIEW SO ADOPTED BY TH E COORDINATE BENCH AS WELL IT IS JUST THAT WE DO NOT FIND OURSELVES IN AGREEMENT WIT H THE SAME. TO US IT APPEARS THAT THE VIEW EXPRESSED BY THE COORDINATE BENCH IS SO MU CH OUT OF CONTEXT THAT EVEN THE IRAS CERTIFICATE FROM THE RESIDENCE COUNTRY WHICH HAS BEEN REPRODUCED IN THE ORDER ITSELF DOES NOT ENVISAGE TREATY BENEFIT IN A SITUA TION IN WHICH THE SHIPPING PROFITS IN INDIA ARE TAXED ON REMITTANCE BASIS IN SINGAPORE A ND THE REMITTANCES TO SINGAPORE HAVE NOT BEEN MADE BUT THEN GOING BY THE ANALYSIS OF THE COORDINATE BENCH THE TAXATION IN SINGAPORE IN SUCH A SITUATION IS WHOLLY IRRELEVANT. THATS CLEARLY AN INCONGRUITY AND IS GOING MUCH BEYOND WHAT IS EVEN I MAGINED BY SINGAPORE. AS FOR THE REFERENCES TO ARTICLE 20 21 AND 22 FOR THE APPL ICATION OF ARTICLE 24 LOB CLAUSE IT IS ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 10 OF 11 WHOLLY MISCONCEIVED INASMUCH AS IN THE ARTICLE 20 A ND 21 SITUATION TAX OBJECT IS CURRENT RESIDENT OF SOURCE STATE (WHO WERE RESIDENT OF THE OTHER CONTRACTING STATE IN THE IMMEDIATELY PRECEDING PERIOD- I.E. SINGAPORE IN THE PRESENT CONTEXT) AND AS SUCH REMITTANCE RULE DOES NOT AT ALL COME INTO PLAY AND IN THE ARTICLE 22 ONLY GOVERNMENTAL INSTITUTIONS ARE REFERRED WHICH ARE ANYWAY NOT TAX ABLE IN THE RESIDENCE STATE REMITTANCE RULE DOES NOT COME INTO PLAY AT ALL. THE CONCLUSION THUS ARRIVED AT BY THE BENCH LEADS TO A SITUATION IN WHICH ARTICLE 24 IS O TIOSE BUT THEN AS IS THE ELEMENTARY LEGAL POSITION A TREATY OR A STATUTE CANNOT BE INT ERPRETED IN SUCH A MANNER SO AS TO MAKE A PROVISION REDUNDANT AS IS REFLECTED IN THE LEGAL MAXIM UT RES MAGIS VALEAT QUAM PEREAT [ SEE HERMAN JS OBSERVATIONS IN UNION TEXAS PETROLEUM CORPORATION VS. CRITCHLEY (1988) STC 69 AFFIRMING THE OBSERVATIONS OF GOULDING J. IN IRC VS. EXXON CORPORATION (1982) STC 356 AT P. 359 REFERRED IN HINDALCO INDUSTRIES (SUPRA) ]. IN ANY CASE THE INTERPRETATION OF A TAX TREATY IS NOT THE SAME THING AS INTERPRETATION OF A STATUTE AND THERE ARE WELL SETT LED GROUND RULES FOR INTERPRETATION OF STATUTES WHICH HAVE BEEN LAID DOWN BY SEVERAL DECIS IONS OF THE COORDINATE BENCHES AND THE INTERPRETATION BY THE COORDINATE BENCH IS C LEARLY CONTRARY TO THE LAW LAID DOWN BY THESE BINDING JUDICIAL PRECEDENTS. FOR ALL THESE REASONS TAKEN TOGETHER AS ALSO INDEPENDENT OF EACH OTHER THE VIEWS OF THE COORDIN ATE BENCH DO NOT APPEAL TO US AND WE DO NOT THINK IT APPROPRIATE TO UPHOLD THIS P LEA OF THE ASSESSEE. NOTWITHSTANDING OUR INABILITY TO CONCUR WITH THE VI EWS OF THE COORDINATE BENCH HOWEVER WE SEE NO NEED TO REFER THE MATTER TO A LA RGER BENCH AS THE EARLIER BINDING JUDICIAL PRECEDENTS SUCH AS HINDALCO INDUSTRIES (SUPRA) ON THE ROLE OF CONTEXT IN INTERPRETATION OF A TREATY TERM WERE NOT BROUGHT TO THE NOTICE OF THE BENCH AND TO THAT EXTENT THIS DECISION DOES NOT CONSTITUTE A BI NDING JUDICIAL PRECEDENT IN THE LIGHT OF LAW LAID DOWN BY HONBLE AP HIGH COURTS FULL BE NCH DECISION IN THE CASE OF CIT VS B R CONSTRUCTIONS [(2002) 202 ITR 222 (AP)]. THAT APART FOR THE REASONS WE WILL SET OUT IN A SHORT WHILE WE ARE NOT ADJUDICAT ING THE MATTER ON MERITS ANYWAY AND THEREFORE THERE CANNOT BE ANY OCCASION TO REF ER THIS ISSUE WHICH IS PURELY ACADEMIC AS ON NOW TO A LARGER BENCH. 10. WE HAVE NOTED THAT THE ADDITIONAL EVIDENCE SUBM ITTED BY THE ASSESSEE WAS ADMITTED BY US AND THIS ADDITIONAL EVIDENCE HAS NOT BEEN CONSIDERED BY ANY OF THE AUTHORITIES BELOW AND THAT CERTAIN FACTUAL ASPECTS OF THE MATTER HAVE COME TO LIGHT ONLY AS A RESULT OF QUESTIONS PUT BY THE BENCH AND THE AUTHORITIES BELOW THEREFORE DID NOT HAVE ANY OCCASION TO DEAL WITH THESE ASPECT S IN SUFFICIENT DETAIL. AS A RESULT OF THESE FACTUAL ASPECTS COMING TO LIGHT THERE ARE SOME INTERESTING LEGAL PROPOSITIONS HAVE ALSO COME TO THE CENTRE STAGE. IT IS AN ASPECT TO BE CONSIDERED WHETHER EVEN IF THE INCOME IS ACTUALLY EXEMPT FROM TAX IN THE RESID ENCE JURISDICTION GIVEN THE UNAMBIGUOUS THRUST OF THE TREATY ON INCOME BEING SU BJECTED TO TAX IN ONE CONTRACTING STATE TO BE ABLE TO CLAIM TREATY PROTECTION IN THE OTHER CONTRACTING STATE AND AVOIDANCE OF DOUBLE NON-TAXATION IS A CLEAR OBJECTI VE OF THE INDO SINGAPORE TAX TREATY SUCH AN EXEMPT INCOME WILL ALSO BE LIABLE T O GET TREATY PROTECTION IN THE SOURCE STATE. WE DID NOT HAVE THE BENEFIT OF HEARIN G PARTIES IN SUFFICIENT DETAIL ON THESE ISSUES NOR IS IT REASONABLE TO EXPECT THAT SU CH ISSUES COMING UP FOR THE FIRST TIME BEFORE US CAN BE ADDRESSED SUITABLY ON SUCH S HORT NOTICE. LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO MADE A SPECIFIC REQUEST FOR D ETAILED HEARING ON THE NEW ISSUES THAT HAVE COME TO THE LIGHT DURING THE COURS E OF HEARING OF THIS APPEAL. LEARNED DEPARTMENTAL REPRESENTATIVE WHO HAD SOUGHT LIBERTY TO FILE WRITTEN ITA NO. 409/RJT/2016 SEAWORLD SHIPPING & LOGISTICS PVT LTD VS. ITO ASSESSMENT YEAR: 2015-16 PAGE 11 OF 11 SUBMISSIONS IN THE LIGHT OF INPUTS FROM THE DIRECTO RATE OF INTERNATIONAL TAXATION HAS ALSO NOT BEEN ABLE TO FILE THE WRITTEN SUBMISSIONS TILL NOW AND WE DO NOT HAVE THE BENEFIT OF DEPARTMENTAL STAND ON THESE ISSUES EITHE R. IN ANY EVENT AS ADDITIONAL EVIDENCE IS SUBMITTED AT THE STAGE OF PROCEEDINGS B EFORE US AND AS THE NEW FACTS HAVE COME TO LIGHT AT THE STAGE OF HEARING BEFORE U S THE PARTIES ALSO SHOULD HAVE A FULL OPPORTUNITY OF PRESENTING THEIR CASE IN THE LI GHT OF THESE FACTS EVEN THOUGH THIS SITUATION HAS ARISEN DUE TO THEIR EVASIVE AND NOT S O TRANSPARENT CONDUCT. LET ALL THE RELEVANT ASPECTS BE EXAMINED AFRESH IN THIS LIGHT A ND THE PERSPECTIVES OF BOTH THE PARTIES BE TAKEN TO THE RECORD AND BE ANALYSED PROP ERLY PARTICULARLY AS THIS ISSUE CONCERNS A LARGE NUMBER OF SINGAPOREAN COMPANIES OP ERATING INDIA. IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF T HE CASE WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE LEARNED CIT( A) FOR ADJUDICATION DE NOVO IN THE LIGHT OF THE NEW FACTS EMERGING AS ABOVE IN ACCORD ANCE WITH THE LAW AND BY WAY OF A SPEAKING ORDER. ALL THE ISSUES ARE LEFT OPEN. WE D IRECT SO. 11. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON THE 28 TH DAY OF NOVEMBER 2017. SD/- SD/- RAJPAL YADAV PRA MOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 28 TH TH DAY OF NOVEMBER 2017 **AM**BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT FIT FOR PUBLICATION (JM) (AM) 1. DATE OF DICTATION: ..27.11.2017- PREPARED BY HO NBLE AM ON HIS OWN COMPUTER-...... ... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: ....27.11.2017....... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: .28.11.2017...... . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 28.11.2017.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : 28.11.2017.. 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: ..