ISHIKAWAJMA-HARIMA HEAVY INDUSTRIES LTD. vs DIRECTOR OF INCOME TAX, MUMBAI

The Supreme Court addressed the tax liability of a Japanese company under the Income Tax Act, 1961, specifically Section 241(Q)(1), concerning amounts received for offshore supply and services related to a LNG project in India. The Court held that the determination of tax liability depends on the applicability of the India-Japan tax treaty and the extent of operations carried out in India. The ruling clarified that the amounts received for offshore services may be chargeable to tax in India, subject to the provisions of the Act and the treaty.