SKY HIGH II LEASING COMPANY LIMITED ,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAX) CIRCLE 4(2)(1), MUMBAI

ITA 1550/MUM/2025Status: DisposedITAT Mumbai06 October 2025AY 2022-23Bench: SHRI AMIT SHUKLA (Judicial Member), MS PADMAVATHY S (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the lease rentals are not taxable in India as per Article 8 of the India-Ireland DTAA, as the assessee does not have a PE in India. The penal interest for delayed payments is also not taxable in India as it is an integral part of the lease income taxable under Article 8.

What were the facts?

The assessee, an Irish company, leased aircraft to Indian airlines and earned rental income. The Assessing Officer treated this income as taxable in India, citing failure to meet the Principal Purpose Test (PPT) under the MLI and the existence of a Permanent Establishment (PE). The assessee also received penal interest for delayed lease payments.

What were the issues?

Whether aircraft lease rentals earned by an Irish company are taxable in India, and if penal interest for delayed payments is also taxable in India.

Which sections of the Income-tax Act were involved?

Section 9(1)(vi)

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Cases cited in this judgment(12)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Heard together (3 matters)

I.T.A. No. 1546/Mum/2025
I.T.A. No. 1547/Mum/2025
I.T.A. No. 1548/Mum/2025

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IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & MS PADMAVATHY S, AM Sky High Lxxix Leasing Co. Ltd., The ACIT (IT), Circle-4(2)(1), Ireland, State outside India-D02 A342. Bandra Kurla Complex, PAN: ABFCS0570G Bandra (East), Mumbai-400051. Appellant) : Respondent)

Sky High XC Leasing Co. Ltd., The ACIT (IT), Circle-4(2)(1), Ireland, State outside India-D02 A342. Bandra Kurla Complex, PAN: ABFCS0570G Bandra (East), Mumbai-400051. Appellant) : Respondent)

Sky High LXXVIII Leasing Co.

The ACIT (IT), Circle-4(2)(1), Ireland, State outside India-D02 A342. Bandra (East), Mumbai-400051. PAN: ABFCS0570G Appellant) : Respondent

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