Carborandum Co. v. CIT

108 ITR 335Supreme Court of India1977#1313 most cited
87

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2007 to 2025.

Also referred to as

Carborandum Co. v. CIT · 108 ITR 335 · Section 9(1)(i) · Section 5(2) · Section 163 · Section 194C · deputed employees · expatriate taxability · secondment agreement · non-resident income accrual · tax liability foreign company · lien employment foreign entity

Sections most often in play

Section 234BSection 5(2)Section 9(1)(i)Section 143(3)Section 144C(13)Section 144C(5)Section 194CSection 234C

Issues it is cited on

bright line testamp expendituresection 42comparable uncontrolled price methodsection 92(1)cost plus methodfunctional analysissection 80jjasection 80jjaasection 163section 92c(3)section 9(1)(i)

Judgments citing Carborandum Co. v. CIT

LG ELECTRONICS INDIA PRIVATE LIMITED,MATHURA ROAD, NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, DELHI

In the result, the appeal of the revenue in ITA No

ITA 433/DEL/2024[2005-06]Status: DisposedITAT Delhi15 Oct 2025AY 2005-06

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

LG ELECTRONICS INDIA PRIVATE LIMITED ,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, DELHI

In the result, the appeal of the revenue in ITA No

ITA 430/DEL/2024[2006-07]Status: DisposedITAT Delhi15 Oct 2025AY 2006-07

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

DCIT, CIRCLE-13(1), NEW DELHI vs. LG ELECTRONICS INDIA PVT. LTD., DELHI

In the result, the appeal of the revenue in ITA No

ITA 2035/DEL/2021[2007-08]Status: DisposedITAT Delhi15 Oct 2025AY 2007-08

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

DCIT, CIRCLE-15(2), NEW DELHI vs. LG ELECTRONICS INDIA PVT. LTD., NEW DELHI

In the result, the appeal of the revenue in ITA No

ITA 1267/DEL/2020[2007-08]Status: DisposedITAT Delhi15 Oct 2025AY 2007-08

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

LG ELECTRONICS INDIA PVT. LTD.,NEW DELHI vs. DCIT, CIRCLE-15(2), NEW DELHI

In the result, the appeal of the revenue in ITA No

ITA 9000/DEL/2019[2014-15]Status: DisposedITAT Delhi15 Oct 2025AY 2014-15

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

LG ELECTRONICS INDIA PVT. LTD.,NEW DELHI vs. ADDL. CIT, SPECIAL RANGE- 5, NEW DELHI

In the result, the appeal of the revenue in ITA No

ITA 7424/DEL/2018[2013-14]Status: DisposedITAT Delhi15 Oct 2025AY 2013-14

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

LG ELECTRONICS INDIA PVT. LTD.,NEW DELHI vs. ADDL. CIT, SPECIAL RANGE- 5, NEW DELHI

In the result, the appeal of the revenue in ITA No

ITA 6838/DEL/2017[2012-13]Status: DisposedITAT Delhi15 Oct 2025AY 2012-13

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

M/S LG ELECTRONICS INDIA PVT. LTD.,,NEW DELHI vs. DCIT, NOIDA

In the result, the appeal of the revenue in ITA No

ITA 991/DEL/2016[2011-12]Status: DisposedITAT Delhi15 Oct 2025AY 2011-12

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

DCIT, NOIDA vs. M/S. L.G. ELECTRONICS INDIA PVT. LTD., GREATER NOIDA

In the result, the appeal of the revenue in ITA No

ITA 1969/DEL/2016[2011-12]Status: DisposedITAT Delhi15 Oct 2025AY 2011-12

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Dharm Veer Singh, CIT(DR)

…ilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the ld. DR that expatriates continu…

MARUTI SUZUKI INDIA LTD.,NEW DELHI vs. DCIT, NEW DELHI

In the result, all the three appeals of the assessee are allowed as indicated above and the appeal of Revenue is partly allowed

ITA 901/DEL/2017[2012-13]Status: DisposedITAT Delhi08 Oct 2025AY 2012-13

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 32Section 35Section 43B

…to the Indian subsidiary and working under the direction, control and supervision of the Indian company do not constitute a PE of the foreign company in India. Reliance in this regard is placed on the following judicial precedents: - Carborandum Co. vs. CIT : 108 ITR 335 (SC) - HCL Infosys Systems Ltd vs. DCIT : 76 TTJ 505 (Del. ITAT) further affirmed by Hon'ble Delhi High Court in the case of Director of Income- tax vs. HCL Info Systems Ltd : 274 ITR 261. - IDS Software Solutions (India) (P.) Ltd. vs. Income-tax Officer: 32 SOT 25 (Bang.) In view of the aforesaid discussions regarding the role and duties of dire…

DCIT, NEW DELHI vs. M/S. MARUTI SUZUKI INDIA LTD., NEW DELHI

In the result, all the three appeals of the assessee are allowed as indicated above and the appeal of Revenue is partly allowed

ITA 1024/DEL/2016[2011-12]Status: DisposedITAT Delhi08 Oct 2025AY 2011-12

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 32Section 35Section 43B

…to the Indian subsidiary and working under the direction, control and supervision of the Indian company do not constitute a PE of the foreign company in India. Reliance in this regard is placed on the following judicial precedents: - Carborandum Co. vs. CIT : 108 ITR 335 (SC) - HCL Infosys Systems Ltd vs. DCIT : 76 TTJ 505 (Del. ITAT) further affirmed by Hon'ble Delhi High Court in the case of Director of Income- tax vs. HCL Info Systems Ltd : 274 ITR 261. - IDS Software Solutions (India) (P.) Ltd. vs. Income-tax Officer: 32 SOT 25 (Bang.) In view of the aforesaid discussions regarding the role and duties of dire…

METSO OYJ,FINLAND vs. ASSISTANT COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), CIRCLE-1(2), KOLKATA

In the result, the appeal filed by the assessee is dismissed and the order of the Ld

ITA 616/KOL/2025[2022-23]Status: DisposedITAT Kolkata25 Aug 2025AY 2022-23

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 143(3)Section 144C(13)Section 144C(5)Section 234BSection 270ASection 56Section 9

…rned by the Appellant can be deemed to have accrued or arisen only if the Assessee has a business connection in India. In this regard, it may be noted that the term “business connection” is not defined in the Act. However, in the case of Carborandum Co v. CIT 108 ITR 335, the Hon’ble Supreme Court of India has held that carrying of activities in India is essential to make non-residents have business connection in India. 29. Furthermore, it should be noted that as per Explanation 1(a) to Section 9(i)(i) of the Act, in case of a business of which all operations are not carried out in India, only such part of income…

ASST. COMMISSIONER OF INCOME TAX (IT)- 2(1)(1), MUMBAI, MUMBAI vs. CREDIT SUISSE (SINGAPORE) LIMITED, SINGAPORE

In the result, appeal by the Revenue for assessment year 2014-15 is dismissed

ITA 1700/MUM/2024[2018-19]Status: DisposedITAT Mumbai23 Sept 2024AY 2018-19

Bench: Smt. Beena Pillai & Shri Ratnesh Nandan Sahay

Section 5(2)Section 9Section 9(1)(i)

…taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India (See CIT v. R.D. Aggarwal and Co. [1965] 56 ITR 20 (SC) and Carborundum Co. v. CIT (1977] 108 ITR 335 (SC) which are decided on the basis of s. 42 of the indian I.T. Act, 1922, which corresponds to s. 9(1)(i) of the Act). In the instant case, the non-resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or ca…

THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. TELSTRA SINGAPORE PTE LTD.

ITA/334/2022HC Delhi24 Jul 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 9

…nce Act, 1976 [Act 66 of 1976, (w.e.f. 1-6-1976).] was to introduce source-based taxation for income in the hands of a non-resident by way of interest, royalty and fees for technical services. In Carborandum & Co. v. CIT [Carborandum & Co. v. CIT, (1977) 2 SCC 862 : 1977 SCC (Tax) 391] , this Court, applying residence- based rules of taxation, held that the technical service fees received by the non-resident assessee (relatable to Assessment Year 1957- 1958) could only be deemed to accrue in India if such income could be attributed to a business connection in India. In the facts of that case, since no par…

THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. TELSTRA SINGAPORE PTE LTD.

ITA/206/2023HC Delhi24 Jul 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 9

…nce Act, 1976 [Act 66 of 1976, (w.e.f. 1-6-1976).] was to introduce source-based taxation for income in the hands of a non-resident by way of interest, royalty and fees for technical services. In Carborandum & Co. v. CIT [Carborandum & Co. v. CIT, (1977) 2 SCC 862 : 1977 SCC (Tax) 391] , this Court, applying residence- based rules of taxation, held that the technical service fees received by the non-resident assessee (relatable to Assessment Year 1957- 1958) could only be deemed to accrue in India if such income could be attributed to a business connection in India. In the facts of that case, since no par…

THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. TELSTRA SINGAPORE PTE LTD.

ITA/61/2023HC Delhi24 Jul 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 9

…nce Act, 1976 [Act 66 of 1976, (w.e.f. 1-6-1976).] was to introduce source-based taxation for income in the hands of a non-resident by way of interest, royalty and fees for technical services. In Carborandum & Co. v. CIT [Carborandum & Co. v. CIT, (1977) 2 SCC 862 : 1977 SCC (Tax) 391] , this Court, applying residence- based rules of taxation, held that the technical service fees received by the non-resident assessee (relatable to Assessment Year 1957- 1958) could only be deemed to accrue in India if such income could be attributed to a business connection in India. In the facts of that case, since no par…

THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. TELSTRA SINGAPORE PTE LTD.

ITA/55/2023HC Delhi24 Jul 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 9

…nce Act, 1976 [Act 66 of 1976, (w.e.f. 1-6-1976).] was to introduce source-based taxation for income in the hands of a non-resident by way of interest, royalty and fees for technical services. In Carborandum & Co. v. CIT [Carborandum & Co. v. CIT, (1977) 2 SCC 862 : 1977 SCC (Tax) 391] , this Court, applying residence- based rules of taxation, held that the technical service fees received by the non-resident assessee (relatable to Assessment Year 1957- 1958) could only be deemed to accrue in India if such income could be attributed to a business connection in India. In the facts of that case, since no par…

GLOBE TEXTILES (INDIA) P. LTD.,AHMEDABAD vs. THE DY.CIT, CIRCLE-2(1)(1), AHMEDABAD

In the result, all the appeals of the assessee are allowed

ITA 455/AHD/2022[2017-18]Status: DisposedITAT Ahmedabad24 Jan 2024AY 2017-18

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumar

For Respondent: Shri Sanjay Kumar, Sr.DR
Section 195Section 250(6)Section 40

…taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India (See CIT v. R.D. Aggarwal and Co. [1965] 56 ITR 20 (SC) and Carborundum Co. v. CIT [1977] 108 ITR 335 (SC) which are decided on the basis of s. 42 of the Indian I.T. Act, 1922, which corresponds to s. 9(1)(i ) of the Act). In the instant case, the non-resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or c…

GLOBE TEXTILES (INDIA) P. LTD.,AHMEDABAD vs. THE DY.CIT, CIRCLE-2(1)(1), AHMEDABAD

In the result, all the appeals of the assessee are allowed

ITA 454/AHD/2022[2014-15]Status: DisposedITAT Ahmedabad24 Jan 2024AY 2014-15

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumar

For Respondent: Shri Sanjay Kumar, Sr.DR
Section 195Section 250(6)Section 40

…taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India (See CIT v. R.D. Aggarwal and Co. [1965] 56 ITR 20 (SC) and Carborundum Co. v. CIT [1977] 108 ITR 335 (SC) which are decided on the basis of s. 42 of the Indian I.T. Act, 1922, which corresponds to s. 9(1)(i ) of the Act). In the instant case, the non-resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or c…

GLOBE TEXTILES (INDIA) P. LTD.,AHMEDABAD vs. THE DY.CIT, CIRCLE-2(1)(1), AHMEDABAD

In the result, all the appeals of the assessee are allowed

ITA 453/AHD/2022[2013-14]Status: DisposedITAT Ahmedabad24 Jan 2024AY 2013-14

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumar

For Respondent: Shri Sanjay Kumar, Sr.DR
Section 195Section 250(6)Section 40

…taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India (See CIT v. R.D. Aggarwal and Co. [1965] 56 ITR 20 (SC) and Carborundum Co. v. CIT [1977] 108 ITR 335 (SC) which are decided on the basis of s. 42 of the Indian I.T. Act, 1922, which corresponds to s. 9(1)(i ) of the Act). In the instant case, the non-resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or c…

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Carborandum Co. v. CIT (108 ITR 335) — Cited in 87 Judgments | BharatTax