Offshore supply receipts performed outside India are not deemed to accrue in India, and section 44BBB applies to project receipts.

Offshore supply receipts under project contracts performed and concluded outside India are treated as income not deemed to accrue or arise in India, because the receipts lack an Indian accrual nexus. The analysis also states that the Tribunal applied section 44BBB to the project receipts as the special computation regime, consistent with its earlier view in the assessee's own case and connected project litigation.

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Issues: Whether the assessee's receipts under the offshore supply and related project contracts were liable to be excluded from Indian tax by treating them as income not deemed to accrue or arise in India, and whether section 44BBB of the Income-tax Act, 1961 applied to the project receipts.

Analysis: The assessee's project contracts were examined in the light of their nature and place of performance. The offshore supply contracts were found to have been carried out and concluded outside India, and therefore the receipts from such supplies could not be treated as income deemed to accrue or arise in India. Since those receipts did not have an Indian accrual nexus, they could not be excluded from the scope of section 44BBB by the Revenue's approach. The Tribunal also followed its earlier view in the assessee's own case and the connected project litigation that the contractual receipts were covered by the special computation regime under section 44BBB.

Conclusion: The issue was decided in favour of the assessee. The receipts from the project were held to fall within section 44BBB, and the Revenue's appeal challenging that treatment failed.

Ratio Decidendi: Receipts from offshore supply contracts performed and concluded outside India are not income deemed to accrue or arise in India and are to be dealt with according to the applicable special computation provision only to the extent they form part of taxable Indian business receipts.

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