Law:

Section:

Section 163(1), read with section 9(1), of the Income-tax Act, 1961 - Representative assessee - Liability Of - Appellants were acting as solicitors of a German corporation - Solicitors of the same corporation in London, am & co., instructed appellants to retain BW, a UK resident - AM & co., obtained briefs, etc., from appellants and handed the same over to BW - BW appeared in Indian courts to argue case of appellants' client - Whether there was any business connection between BW and appellants - Held, on facts, yes - Whether appellants could be held liable under section 163(1) for fees accrued to BW in India - Held, on facts, yes Words and phrases - "Business" and "business connection" occurring under section 9(1) FACTS The appellants were acting as solicitors of a German Corporation in two suits filed on the original side of the Calcutta High Court. By a cable dated 31-5-1965, the solicitors of the said German Corporation in London, AM & Co., instructed appellants to retain BW, a resident of UK, in the said suits. By virtue of further correspondence, AM & Co. obtained briefs of suits and other necessary documents from the appellants and handed over the same to BW. The appellants, accordingly, retained BW, who along with other Indian counsels, being appointed by the appellants, argued the case of appellants' client. The hearing of one of the said suit commenced from 27-1-1970 and concluded on 16-2-1970. BW left India on 17-2-1970 without making any arrangement regarding the payment of income-tax on the fees earned by him in India. In response to the ITO's notice received by the appellants on 19-2-1970, the appellants denied their liability under section 195(2) on the grounds that (i) they had not briefed the case to BW, ( ii) they had not incurred any liability to pay any fees to him, and (iii) they did not know as to how much fees was payable to BW. Thereupon, by a letter dated 27-2-1970, the ITO proposed to proceed against the appellants under section 163(1). The appellants also denied their liability under section 163(1), on the grounds, inter alia, (i) that they had no business connection with BW. and even if there was any connection it was just a casual…

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