Law: Income Tax Act, 1961

Section: 9

Income-tax----Non-resident---Income deemed to accrue or arise in India---Scope of S.9, Indian Income Tax Act, 1961---Fees for technical services---Business connection---Company formed for generation and sale of electricity--¬Agreement with non-resident company in Zurich for help in raising finances---Non-resident company giving advice regarding processing of loans---Success fees paid to non-resident---No business connection between Indian company and non-resident---However, success fee constituted fees for technical services---Success fees, therefore, assessable under S.9(1)(vii)(b)--¬Indian Income Tax Act, 1961, S.9. A plain reading of section 9(1) of the Income Tax Act, 1961, makes it clear that it enumerated various categories of income under subsection (1) and directs that income falling under each of the clauses and sub-clauses shall be deemed to accrue or arise in India. The income dealt with in each clause is distinct and independent of the other and the requirements to bring income within each clause, are separately noted. As such it is not necessary that income falling in one category under any one of the sub-clauses should also satisfy the requirements of the other sub-clauses to bring it within the ambit of the expression "income deemed to accrue or arise in India". If the clauses are so interpreted as to read the requirements of one into the other, it will lead to anomalous and absurd results and this obviously cannot be done. Clause (i) of subsection (1) of section 9 brings within its fold "all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India." The following principles are applicable with regard to "business connection": (i) whether there is a business connection between an Indian company and a non-resident company is a mixed question of fact and law, which has to be determined on the facts and circumstances of each case; (ii) the expression "business connection" is too wide to admit of any precise definition; however, it has some…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492