JUDGMENT
Prakash Krishna, J.
1. The Tribunal, New Delhi has referred the following identical question of law involved in all the above cases under Section 256(1) of the IT Act, 1961 (hereinafter referred to as ‘the Act’) for opinion to this Court :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right to hold that the expenditure in question on payment of salaries was not borne by the permanent establishment in India and so the employee in question would not be exigible to Indian taxation laws in terms of Article 16(2)(c) of the DTAA?”
2. Briefly stated, the facts giving rise to the present reference are as under:
The reference relates to the asst. yr. 1987-88. The assessee-respondent claimed total exemption from tax on the perquisites under the DTAA between India and Italy. There was an agreement dt. 25th April, 1985 between the Oil & Natural Gas Commission (ONGC) (the charterer) and M/s Elitos S.P.A., the Italian company (the contractor). The agreement was to take effect from 14th March, 1985. The agreement was for providing helicopter services to ONGC for operations of exploration and exploitation of oil and natural gas in off-shore and on-shore areas in India. In terms of the agreement, one PUMA helicopter with pilots and engineers to operate and maintain the helicopter, was provided by the contractor to the charterer. The agreement was terminated on 31st Dec., 1986.
3. The AO has held that the payments made to the assessee-respondents were not covered under the DTAA and further that the income was taxable under the IT Act, 1961. The said order was confirmed in appeal by the CIT(A). However, the Tribunal has held that no tax was payable by the assessee-respondents under the DTAA between India and Italy, being a special provision made pursuant to Section 90 of the Act and has, therefore, overriding effect over the other provisions of the IT Act.
4. Heard the learned standing counsel for the Revenue. Nobody has appeared on behalf of the respondent-assessees. The finding of the Tribunal is as follows :
“As all the conditions contained in Article 16(2) of the DTAA are satisfied in these cases, there was no question of subjecting the remuneration paid to. the pilots/engineers under the Indian taxation laws. We, therefore, hold that the assessees in question would not he exigible under the Indian taxation laws in view of Article 16(2)(c) of the DTAA.”
5. The learned standing counsel could not point out any error in the aforesaid finding of the Tribunal to persuade us to hold that any of the conditions contained in Article 16(2) of the DTAA is not fulfilled.
6. In the result, we answer the question referred to us in affirmative, i.e., against the Revenue and in favour of the assessee. There shall be no order as to costs.