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2017 (11) TMI 709 - AT - Income TaxTaxability of income - accrual of income in India - Direction of the DRP to exclude the income received from off–shore supplies of equipments from taxation - Held that:- Material brought on record clearly reveal that the P.E. has no role to play as far as it relates to off–shore supply of equipments and materials which is evident from the fact that not only the goods were supplied from Sweden and other countries on CIF/CIP basis but payments have been made directly to the assessee outside India in foreign currency and in the bank account of the assessee in Sweden. Therefore, the P.E. has no connection with the off–shore supply of goods. Therefore, only because the contracts entered into by the assessee are single composite contracts it cannot be said they are indivisible. The reading of contract as a whole clearly demonstrates that the scope of work as per the contract is divisible in nature and has been segregated to supply portion and erection and commissioning portion. Therefore, the off–shore supply of equipments having been effected from outside the territory of India and the sale having been completed outside territory of India, the ratio laid down by the Hon'ble Supreme Court in Ishikawajma-Harima Heavy Industries Ltd. (2007 (1) TMI 91 - SUPREME COURT ) squarely applies to the facts of the present case. Thus the income received from off–shore supply of equipments in case of a divisible contract is not taxable in India - Decided against revenue
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