Set 413 to win a world record 17th Test in succession, the Australians were dismissed for 340 to allow the spirited visitors to reduce the margin to 2-1 in the four match series with one full day to spare.

Not many had given the Indians any hope at the WACA, regarded as the fastest pitch in the world, but Anil Kumble and his men came out firing on all cylinders to not only pull off a sensational victory but raise hopes of levelling the series.

The Indians celebrated wildly and hugged each other after R P Singh castled last man Shaun Tait, bringing an end to a dramatic Test which saw fortune fluctuating from one team to the other on the four days.

It was a remarkable show of character by the Indians who did not allow the acrimonious events of the Sydney Test to affect them as they went about plotting the demolition of the champion team.

Michael Clarke, who has struggled to find his peak form in the series, was the highest scorer for the Australians with 81 while Michael Hussey (46) and captain Ricky Ponting (45) were the other notable performers.

With the hosts reeling at 253 for eight, tailenders Mitchell Johnson (50 not out) and Stuart Clark (32) used the long handle to good effect to give the Indians some anxious moments.

The lusty hitting of the tailenders prompted captain to take the second new ball but the Indians had to wait for a while before the moment of glory came.

The two teams will now travel to Adelaide for the fourth and final Test beginning from January 24 but the Australians have already ensured that the Gavaskar-Border Trophy remained with them by winning the first two Tests.

The last time India defeated Australia in a Test was in Mumbai in 2004 when they had beaten them by 13 runs.

Resuming at the overnight score of 65 for two, the Australians had to defy history as only once has a bigger total been successfully chased in the fourth innings of a Test, when the West Indies made 418 for seven against Australia in Antigua in 2003.

The previous best chase at the WACA was Australia's 342 for eight against India in 1977, in the first Test between the two countries at the venue.

Australia have not been beaten since losing to England at Trent Bridge in August, 2005, and they have not lost a home Test since going down to India in Adelaide in December 2003.

Interestingly, it was also India who broke Australia's previous record 16-Test winning streak when they notched up a memorable victory in Kolkata in 2001.

For the Indians, man-of-the-match Irfan Pathan was the pick of the bowlers with 3/54 while R P Singh, Anil Kumble and Virender Sehwag chipped in with two wickets apiece.

Ponting's men began the day on 65 for 2 and kept losing wickets at regular intervals with only Michael Clarke offering any real resistance.

The ninth wicket pair Johnson and Clark put on 73 runs and delayed the inevitable before Pathan broke through, having Clark caught behind by Dhoni.

Spinners Kumble and Sehwag hogged the limelight on the final day but no less remarkable was the heart and intelligence which the three-pronged medium-fast bowlers exhibited.

Ishant Sharma (1 for 63) might have picked up just one scalp but it was the one who is widely considered the heart and soul of Australian batting, Ricky Ponting.

Pathan picked up a single wicket during the day but his two victims on third evening were the left-handed openers which straightaway put the world champions on the backfoot.

India were successful in taming Australia at a venue which has been their fortress since a long time and out of 34 matches only seven have ever resulted in a defeat for them.

Australia fielded four fast bowlers for this match to keep their reputation intact but have now suffered their first defeat in WACA for over 10 years, the last one coming against the West Indies in 1997.

Australia lost just one wicket in the morning session but it was an inspiring spell of fast bowling by young Ishant Sharma, which perked up the visitors in their quest.

Sharma bowled nine overs at a stretch and removed Ponting after troubling him endlessly in a remarkable spell of 9-0-31-1.

Australia took the lunch at 142 for three but the real damage was done in the middle session when the world champions lost four wickets.

Hussey, after a fighting knock, fell leg before wicket to R P Singh and same was the fate of Andrew Symonds (12) though the latter appeared to have hit the ball with his bat first.

Australia still appeared to be in a recovery mode as Michael Clarke and Adam Gilchrist (15) put on 50 runs for the sixth wicket before Sehwag's golden arm did the trick.

Sehwag removed Gilchrist and Brett Lee (0) off successive overs, which snuffed the fight out of the world champions.

Gilchrist fell for his propensity to sweep spinners while Lee could not keep a forward push away from VVS Laxman at silly point.

Australia took the tea at 243 for seven which quickly worsened once Kumble dragged Clarke out of his crease and had him stumped by an alert Dhoni.