Assessee, a tax-resident of Singapore, which is operating ships in international traffic. It had three types of shipping income in year under consideration, viz. , income from coastal shipping which was offered to tax under section 44B, income from inward freight and income from outward freight which was claimed as exempt under article 8 of India-Singapore DTAA. Assessing Officer completed assessment under section 143(3) accepting return of income. Commissioner under revision proceedings held that there is no commercial rationale for incorporation of assessee in Singapore and assessee had been interposed as a company in Singapore to derive maximum tax benefit under India-Singapore DTAA, hence assessee was not entitled to benefits of India-Singapore DTAA. Accordingly, he held that impugned assessment order was erroneous and prejudicial to interest of revenue. On appeal the Tribunal held that allegations made by Commissioner were without any corroborative evidence. It was also observed that Commissioner had restricted his directions only to inward freight income, thereby, accepting assessee’s claim under section 44B in respect of income from coastal shipping and claim of exemption under article 8 of DTAA in respect of income from outward freight, revealed that he himself was not sure about nature and character of shipping income earned by assessee. Tribunal held that when the assessee is holding a valid tax resident certificate (TRC) issued by Singapore tax authorities, Assessing Officer was justified in granting treaty benefits to assessee. Since invoices raised by assessee demonstrated that assessee charged fee for transportation of goods and not towards leasing of vessels, therefore, said receipts could not be treated as royalty. Therefore Commissioner is not justified in assuming jurisdiction under section 263 to revise assessment order as same could not be considered to be erroneous and prejudicial to interest of revenue. (AY. 2016-17)