Law:

Section:

[2009] 178 Taxman 100 (AAR)/[2009] 309 ITR 356 (AAR)/[2009] 221 CTR 721 (AAR) [2009] 178 TAXMAN 100 (AAR - NEW DELHI) AUTHORITY FOR ADVANCE RULINGS (INCOME-TAX), NEW DELHI Cholamandalam MS General Insurance Co. Ltd., In re* P.V. REDDI, CHAIRMAN A. SINHA AND RAO RANVIJAY SINGH, MEMBER AAR NO. 752 OF 2007 JANUARY 29, 2009 Section 9 of the Income-tax Act, 1961, read with article 13.4 of the Double Taxation Avoidance Agreement between India and Korea - Income - Deemed to accrue or arise in India - Applicant is engaged in business of non-life insurance and is interested in building up business relationship with Indian companies which are subsidiaries/joint ventures of certain foreign companies - It has entered into a secondment agreement with Korean insurance company (HMFICL), pursuant to which an employee of HMFICL (secondee) has been seconded to be engaged in certain specified activities under supervision and control of applicant in matters relating to Korean insurance business for a period of two years - Applicant directly reimburses HMFICL a part of salary and other benefits payable to seconded employee as provided in agreement - HMFICL continues to be employer of secondee and to pay salary to him - It has been deducting tax from salary payable to secondee and such tax has been deposited with Income-tax Department in India - Whether amount paid or payable by applicant to HMFICL under terms of secondment agreement is in nature of income accruing to HMFICL in terms of section 9(1)(vii), read with article 13.4, of DTAA between India and Korea - Held, no FACTS The applicant-company is engaged in the business of non-life insurance and is interested in building up business relationship with the Indian companies which are subsidiaries/joint ventures of certain foreign companies. It has two divisions - each dealing with the Korean and Japanese segments in India. In this regard, it is in need of persons from the respective jurisdictions abroad who are well-versed with the insurance business practices, foreign language and other related information that would be of use of the applicant in the expansion of its business activities. In pursuing the above objective, a…

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