The assessee had earned a profit on account of transactions in foreign exchange but claimed same as exempt under article 14 of India-Spain DTAA. The AO held that   the assessee, as a FII in India, was permitted to invest in shares or trade in derivatives only, and that assessee was not permitted to invest in foreign exchange.  Accordingly the AO held that  as an investor, assessee could not carry out any business activity” and accordingly, it was held that receipt on account of foreign exchange transactions were in nature of income from other sources, or other income, which was taxable in India as per Article 23(3) of India-Spain DTAA. CIT(A)  held that Article 23 would not come into play for taxation of income which had not been taxed under Articles 6-22, even though it could have been taxed under one of those articles but for non-satisfaction of conditions precedents for taxability under related article.  If a Spanish tax resident was to make gains by entering into forward exchange contracts in India, and such a Spanish tax resident had a PE in India from which such activities were to be carried out, profits of such an adventure would have been taxable in India under Article 7. While taxability of such gains, i.e., capital gains, was covered by Article 14, gains were not taxable in source jurisdiction, as conditions precedents to taxability in source jurisdiction, i.e., coverage by Article 14(1) to 14(5), were not satisfied.  Dismissing the appeal of the revenue the Tribunal held that  taxation of business profits was expressly dealt with by article, those business profits could not be taxed in source jurisdiction for want of satisfying fundamental condition precedent for its taxability, i.e., existence of a PE in source jurisdiction.   Tribunal also held that the sale of shares in only such companies are covered as hold, directly or indirectly, at least fifty percent of the aggregate assets consisting of immovable property. Just because a company is dealing in real estate development does not imply, or even suggest, that over fifty percent of its aggregate assets consist of immovable properties. It is not the case that predominant part, or fifty percent, of aggregate of assets of these companies consist of immovable properties. The AO has made no efforts whatsoever to demonstrate, or even indicate, that the assets held by these companies constituted “principally” the immovable properties. The AO has apparently proceeded on the presumption that just because these companies are dealing in real estate development, the assets of these companies “principally” consist of immovable properties. Such an approach cannot get any judicial approval. (AY. 2013 -14)