Calcutta High Court sets aside income tax notices issued to partners in UK and Netherlands

22nd December, 2015 : Calcutta High Court sets aside the Income Tax notice issued to the petitionerĀ  in Maersk Line U.K. LtdĀ  Vs Dy Director of Income Tax :

Two income tax notices issued to partners of the company in UK and Netherland were challenged before Bombay HC. The petitioners pointed out the the assessment order which concluded that under DTAA income earned from ships on international traffic was not liable to tax in the hands of the partners. They also contended that the "partners" and the "partnership" cannot be distinguished only for the purpose of taxation in India.

The High Court agreed with these contentions and set aside the notices stating "this Court is of the view that the noticee is a person covered under the treaty and being an enterprise of the UK, the same has fiscal domicile in the UK where it is based. Its income from operation of ships in international traffic is not exigible to tax under domestic law. Consequently the impugned notices are set aside and the writ petitions disposed of."