Treaty Provisions Prevails Over Income Tax Act – Receipts From Aircraft Leasing Is Not Taxable As Royalty: Delhi High Court

In a pivotal ruling, the Delhi High Court held that receipts from aircraft leasing under an international treaty cannot be taxed as royalty under the Income Tax Act. The court found that the treaty provisions, in this case, took precedence over domestic tax laws, providing relief to the leasing company. This decision reinforces the principle that international treaty provisions supersede conflicting provisions in the Income Tax Act, offering clarity for cross-border leasing transactions.