Law:

Section:

Section 9 of the Income-tax Act, 1961 [Corresponding to section 42(1) of the Indian Income-tax Act, 1922] - Income - Deemed to accrue or arise in India - Assessee was a resident of Indian State and was non resident for purposes of Act - He purchased in State of his residence tobacco for 'M' who was a resident in British India, for latter's 'bidi' business - 'M' paid commission to assessee on total value of goods purchased by assessee - Whether commission paid to non-resident had reference solely to purchases made outside British India and was in no way affected by business done in British India - Held, yes - Whether, therefore, commission earned by assessee did not accrue or arise to him through or from business connection in British India within meaning of section 42 of 1922 Act - Held, yes FACTS The assessee was a resident of the Indian State and was a non-resident for the purpose of the Act. He purchased in the Indian State tobacco for 'M' for the latter's 'bidi' business. 'M' was resident in British India 'M' paid to the assessee a commission on the total value of the goods purchased by the assessee for him. The Tribunal held that the commission so earned was from a business connection in British India and was, therefore, assessable to tax under section 42 of the 1922 Act. On reference: HELD There is no warrant for holding that purchase and supply of raw material to a resident manufacturer by a non-resident would render the commission earned by the latter liable to tax under section 42(1) of the 1922 Act in the absence of anything to show that there was any course of dealing between the resident and the non-resident or that the commission earned by the non-resident was made to depend on business done in British India. In the instant case the commission paid to the non-resident had reference solely to the purchases made outside British India and was in no way affected by the business done in British India. The principle is clear that something more than mere rendering services out of British India for remuneration to a resident businessman is necessary to establish a business connection within the meaning of that expression in section 42(1) of 1922 Act. Such…

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