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March 2025

Article 8 of India-USA DTAA – Whether code sharing revenue falls under the scope of ‘operations of aircraft’ and is entitled to relief under the DTAA.

By Geeta Jani | Dhishat B Mehta | K. Prasanna, Chartered Accountants
Reading Time 5 mins

14. [2024] 169 taxmann.com 8 (Mumbai - Trib.)

Delta Air Lines, Inc. vs. ACIT (International Taxation)

ITA No: 235 (Mum.) of 2022

A.Y.: 2018-19

Dated: 7th November 2024

Article 8 of India-USA DTAA – Whether code sharing revenue falls under the scope of 'operations of aircraft' and is entitled to relief under the DTAA.

FACTS

The Assessee, a tax resident of the USA, was engaged in the business of aircraft operations in international traffic. It had established a branch office in India, a permanent establishment that was admitted to facilitate the booking of air passenger tickets and freights. The Assessee had three streams of international journey income, namely (i) transportation using their own aircraft, (ii) transportation with a combination of own aircraft and third-party carriers vide code sharing arrangements for one or more parts of the journey, and (iii) entire transportation using third party carriers under code-sharing arrangements.

The Assessee filed NIL return of income claiming benefits under Article 8 of the DTAA.

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