Dismissing the appeal of the assessee the Court held that ; the India-UK DTAA does not define the term ‘gross amount’. Likewise the word ‘income’ has not been defined in the treaty and therefore, one has to be guided by the definition of ‘income’ as defined under section 2(24), which includes, payments net of taxes. The tax which has been borne by the assessee, is also the income of the U.K. University and since such income is covered by the words ‘gross amount’, as mentioned in the treaty, the revenue was justified in grossing up by applying section 195A, as the provisions of the treaty do not provide a mechanism for computation of income, it prescribes only the rate of tax. Thus, to apply the correct rate of tax, the first requirement would be to determine the income on which tax is payable. This mechanism having not been provided under the treaty essentially, the assessee has to compute his income on such transaction in terms of the provisions of the Act and on such computation, if the rate of tax as applicable to such transactions under the DTAA is beneficial to the assessee, then the assessee would be entitled to avail such beneficial provision in terms of section 90. Thus, the contentions advanced by the assessee to state that no grossing up is provided for under article 13 of the DTAA and therefore, they are liable to pay tax at the rate of 15 per cent on the amounts specified in the agreement is a submission, which is liable to be rejected.(AY. 2002-03 , 2003-04)