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June 2025

Article 8 of India-Mauritius DTAA – Shipping Company is not entitled to benefit under Article 8 if its place of effective management is located in a third country; on facts, booking agent did not constitute DAPE.

By Geeta Jani | Dhishat B Mehta | K. Prasanna, Chartered Accountants
Reading Time 3 mins

4. [2025] 172 taxmann.com 857 (Mumbai - Trib.)

DCIT (IT) vs. Bay Lines (Mauritius)

IT Appeal Nos. 4858 and 4859 (Mum.) of 2018

CO Nos. 185 and 186 (Mum.) OF 2019

A.Y.: 2013-14 & 2024-15 Dated: 28th March, 2025

Article 8 of India-Mauritius DTAA – Shipping Company is not entitled to benefit under Article 8 if its place of effective management is located in a third country; on facts, booking agent did not constitute DAPE.

FACTS

The Assessee was a shipping company incorporated in Mauritius. Mauritius Tax Authorities had issued a tax residency certificate to the Assessee. The Assessee contended that the freight income received by it was exempt from tax in India under Article 8 of India-Mauritius treaty. The AO observed that the Place of Effective Management (‘POEM’) of the Assessee was in UAE (i.e. neither in Mauritius nor in India). Hence, the Assessee did not qualify for benefit under Article 8. Accordingly, the AO held that such income would be subject to provisions of Article 7 of India-Mauritius DTAA. The AO further observed that the booking agent in I

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