no portion of receipts from sale of equipment can be taxed in India both under the provisions of the Act and DTAA since all the activities relating to designing, fabrication and manufacturing took place outside India, the sale of equipment also took place outside India on principal to principal basis. - the sale of equipment is concluded outside India because all work relating to manufacturing, designing, fabrication etc. of equipment is done outside India and sold to the assessee directly on export sale basis. The contract provides for delivery of equipment on FOB Foreign Port of Shipment majority of payments i.e. 80-85% for each and every part of shipment becomes payable upon delivery of equipment on FOB foreign Port of Shipment the above payments are through irrevocable letter of credit which makes it clear that even if the ship does not sail or deliver the goods to the destination, the assessee receives payment out of Letter of Credit guaranteed by bank upon FOB delivery. Even the customer’s inspection for equipment is outside India

PwC filed its return of income in the capacity of non-resident AOP  at a total income of Rs.85,35,230/- under the head “income from business & profession”. - AO held that sum of Rs.1,95,35,270/- was taxable in India @ 30%. Since the payment was received net of tax, the same was grossed up u/s 195A and added at Rs.2,79,07,529/-. He also held that assessee was liable for interest u/s. 234B and 234C of the Act as the assessee was liable to pay advance tax. - CIT(A) held that the impugned amount is to be taxed as per Article 15(1)(b) and not under Article 15(1)(a).

Special Bench: where claim of damages and interest thereon is disputed by the assessee in the court of law, deduction can’t be allowed for the interest claimed on such damages in the computation of business income