Supplementary rent/Reserve rent paid for aircraft leasing whether taxable as royalty under Indo-Ireland DTAA - Article 12.

Facts:

Assessee had paid reserve rent/supplementary rent for aircrafts that were leased by it to an Irish entity. It was the case of the revenue that consequential to the removal of Section 10(15A) in the act, lease rent payable post 01-04-2007 would be taxable as royalty under Indo-Irish DTAA. Plea of the assessee was that the DTAA excluded lease rent from aircrafts in its scope specifically under Article 12. On higher appeal -

Held in favour of the assessee that the reserve lease rent/supplementary rent is not taxable as royalty under Indo-Ireland DTAA as the article excludes aircrafts in its scope. The said rent would be taxable in Ireland as per Article 8 of the DTAA.

Applied:

Inter Globe Aviation Ltd. (Indigo) v. Addl. CIT (2022) 191 ITD 1 (Del-Trib) : 2022 TaxPub(DT) 0799 (Del-Trib) Special bench Del ITAT

Case: Spice Jet Ltd. v. Addl. CIT 2023 TaxPub(DT) 4112 (Del-Trib)