Law:

Section:

Section 9 of the Income-tax Act, 1961 - Income - Deemed to accrue or arise in India - Where employees of non-resident company were seconded to assessee, an Indian company, reimbursement of salaries of seconded employees by assessee to non-resident company would be income of non-resident company which would be taxable in India [In favour of revenue] Assessee was a wholly owned subsidiary of an American company 'V'. As per practice followed by 'V' group, all group companies seconded their own employees to other legal entities within the group, who were in need of individuals, for discharge of certain immediate functions. As per agreement entered into between assessee and a non-resident group company, namely GTE three employee of that group company were seconded to the assessee. As per terms of agreement employees seconded would, at all times, remain the employees of GTE salaries of the employee would be paid by GTE; and the assessee would reimburse the American company the amount of such salary paid. The assessee sought advance ruling in respect of taxability of such reimbursement in hands of GTEE going by the terms of the agreement, the Advance Rulings Authority held that the amount paid by the assessee to GTE represented income in the hands of GTE. On writ: Held that it was seen from the order of the Advance Rulings Authority that it went into the relevant clauses in the agreement between the assessee and the US company only to come to a conclusion that the receipts by the American company were to be held as income and, hence, amenable to the provisions of the Act. Going by the reasons given, which were on the basis of the interpretation of the various clauses therein, there could be no ground for the Court to substitute its view on the reasoning of the Advance Rulings Authority. Case review : Verizon Data Services India (P.) Ltd., In re [2011] 337 ITR 192/199 Taxman 242/11 taxmann.com 177 (AAR - New Delhi)partly set aside. Section 245S of the Income-tax Act, 1961 - Advance Ruling - Applicability of - Writ petition is maintainable against order of advance ruling authority [In favour of assessee] Even though the Act may attach a finality to the order passed in…

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