Dismissing the appeal of the Revenue the Court held that, though assessee had entered into a contract with MRVC for the supply of equipment and services, offshore as well as onshore, the terms of the contract distinctly set out the quantum of offshore supplies to be made by the assessee to MRVC and also the quantum of payment to be received by the assessee from MRVC outside India. The composite contract specifically records the quantum of goods to be supplied outside India, the property in the plant and machinery got transferred to MRVC once they were loaded on the mode of transport from the country of origin to India and even the payment is made outside India. Therefore the income arising from offshore supplies is not taxable in India. (AY. 2012-13)
CIT (IT) v. Iljin Electric Co. Ltd (2024) 296 Taxman 516 (Bom)(HC)
S. 9(1)(i): Income deemed to accrue or arise in India-Business connection-Business profits-Composite contract-Service rendered and payment received outside India-Income earned on account of offshore supplies was not taxable-DTAA-India-South Korea.[S. 234B,260A, Art. 7]