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2022 (7) TMI 839 - AT - Income TaxIncome accrued in India - income on account of sale of goods is taxable in India or not - CIT(A) held that the receipts on account of supply of equipment Taurus 60 and other accessories cannot be taxed in India as all the activities in relation to manufacturing of the equipment took place outside India - HELD THAT:- The purchase order in regard to supply of Taurus 60 and other accessories do not mention about any services in regard to installation and commissioning to be provided by the appellant company. No separate price for such services is quoted in the purchase order. The only basis for the assessing officer for concluding that the sale of equipment is concluded in India is that the appellant has admitted that it has supervised the turbine change out in India. As it is held in paragraphs above that the receipts on account of supply of equipment Taurus 60 and other accessories cannot be taxed in India as all the activities in relation to manufacturing of the equipment took place outside India and sale was carried out on a principle to principle basis. The transaction was at arm’s length and the consideration is also received outside India in foreign currency. As in ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES LTD. VERSUS DIRECTOR OF INCOME-TAX [2007 (1) TMI 91 - SUPREME COURT] where income arises out of operations performed in more than one jurisdiction, then it has a nexus with each of the jurisdictions and no one state can exercise its right to tax the income which has not arisen in that state. Accordingly, only that part of the work which is attributable to business operations carried out by the Appellant in India is taxable in India. In the present case, therefore, at the most the supervisory services for installation and commissioning etc., provided in India at the premises of the buyer, can be considered to be taxed in India. The appellant had submitted during the assessment proceeding that it had offered tax on such services (Installation, commissioning and supervision) on gross basis at the rate of 10.506% u/s 115A of the Act. The assessing officer has not disputed this fact in the assessment order. He has not made any separate addition on this account. The only addition made by the assessing officer on account of sale of the machine to SI Group-India Ltd. As held that the receipts on account of supply/sale of equipment Taurus 60 and other accessories cannot be taxed in India as all the activities in relation to manufacturing of the equipment took place outside India. The services rendered by the personnel of the appellant company for the purpose of installation and commissioning of the turbine has accrued in India and therefore taxable in India. - Decided in favour of assessee.
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