JUDGMENT

Shah, J.-These appeals are filed by the Assessee against the judgment and order dated 2nd July, 1984 passed by the Andhra Pradesh High Court in deciding three income tax references partly in favour of the revenue. (Re : CIT v. Superintending Engineer, Upper Sileru1). The Court held that provisions of Section 195 relating to deduction of tax at source come into operation in respect of sums paid to a non-resident, whether or not such sum represents only income or profits if such sums are paid to non-residents during the course of regular trading operation. That finding is challenged in these appeals.

2. Before deciding the question involved, we would refer to a few facts of the matter:

The appellant-the Andhra Pradesh State Electricity Board (hereinafter referred to as "the Board") made certain payments to non-residents against the purchase of machinery and equipment and also against the work executed by the non-residents in India of erecting and commissioning the machinery and equipment. The Board entered into two separate agreements with M/s. Charmilles Engineering Works Ltd., Geneva, Switzerland, one for the purchase of Nos. 95,000 BHP Francis Turbines and another for purcha