CIT v. R.D. Aggarwal and Co.

56 ITR 20Supreme Court of India1965#631 most cited

What is CIT v. R.D. Aggarwal and Co. authority for?

A 'business connection' for non-residents requires a real and intimate relation between their trading activities outside India and activities within India, contributing directly or indirectly to their earnings. The Supreme Court assigned a wide meaning to this term.

156

judgments rely on this decision, according to BharatTax’s citation analysis of 366,469 Indian tax judgments — from 2007 to 2026.

Also referred to as

CIT v. R.D. Aggarwal and Co. · 56 ITR 20 · Section 9(1)(i) · Section 195 · business connection · non-resident income · income deemed to accrue · real and intimate relation · PE threshold

Sections most often in play

Section 143(3)Section 195Section 1961Section 9(1)(vii)Section 144C(13)Section 234BSection 9(1)(i)Section 115A
Read the full judgment

Issues it is cited on

section 44bbbdependent agent pesection 9(1)(i)agency peconstruction pefixed place pesection 44bbsection 5(2)business connectionsection 42section 44bsection 115a

Judgments citing CIT v. R.D. Aggarwal and Co.

DCIT (It) 4(2)(2), Mumbai vs. Star Cruise (India) Travel Services P.Ltd, Mumbai

In the result, these appeals by the Revenue stands dismissed

ITA 2426/MUM/2017[2015-16]Status: DisposedITAT Mumbai21 Aug 2018AY 2015-16

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwal

Section 201Section 5(2)(a)

…ing at his decision, the AO has reproduced the duties and obligations of the Indian counterpart i.e. SCITSPL as per the agreement and has relied on the Supreme M/s Star Cruise (India) Travel Services Pvt. Ltd. Court decision in the case of R D Aggarwal & Co. (56 ITR 20) and Anglo-French Textile Co Ltd (23 ITR 101). 7. Upon the assessee’s appeal, the ld. Commissioner of Income Tax (Appeals) decided the issue in favour of the assessee by placing reliance upon a series of ITAT decision in the assessee’s own case. 8. Against this order, the assessee is in appeal before us. 9. We have heard both the counsel and peruse…

DCIT (It) 4(2)(2), Mumbai vs. Star Cruise (India) Travel Services P.Ltd, Mumbai

In the result, these appeals by the Revenue stands dismissed

ITA 2425/MUM/2017[2014-15]Status: DisposedITAT Mumbai21 Aug 2018AY 2014-15

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwal

Section 201Section 5(2)(a)

…ing at his decision, the AO has reproduced the duties and obligations of the Indian counterpart i.e. SCITSPL as per the agreement and has relied on the Supreme M/s Star Cruise (India) Travel Services Pvt. Ltd. Court decision in the case of R D Aggarwal & Co. (56 ITR 20) and Anglo-French Textile Co Ltd (23 ITR 101). 7. Upon the assessee’s appeal, the ld. Commissioner of Income Tax (Appeals) decided the issue in favour of the assessee by placing reliance upon a series of ITAT decision in the assessee’s own case. 8. Against this order, the assessee is in appeal before us. 9. We have heard both the counsel and peruse…

Nokia Net Works Nokia Group Finland vs. JCIT, New Delhi

In the result, all the issues which have been remanded back by the Hon'ble High Court to this Tribunal stands decided in favour of the assessee and against the Revenue

ITA 1964/DEL/2001[1998-1999]Status: DisposedITAT Delhi05 Jun 2018AY 1998-1999

Bench: Shri N.K. Saini, Shri Pramod Kumar & Shri Amit Shukla

For Appellant: Shri Deepak Chopra, Amit SrivastavaFor Respondent: Shri T.M. Shiv Kumar, CIT-DR
Section 142(1)Section 3

…proposition highlighted before us in this regard. 54. Before us, regarding the existence of business connection, Mr. Deepak Chopra relied upon the judgment of Hon'ble Supreme Court in the case of CIT vs. R. D. Aggarwal and Co. and Another, reported in (1965) 56 ITR 20 (SC) and submitted that mere performance of some activities in the Indian Territory does not afford a business connection of foreign company in India. What is important to examine here is that the trading activities within the territories should be linked with the trading activities carried on outside the taxable territories. Here, in this case, he…

Nokia Net Works Nokia Gruop Finland vs. DCIT, New Delhi

In the result, all the issues which have been remanded back by the Hon'ble High Court to this Tribunal stands decided in favour of the assessee and against the Revenue

ITA 1963/DEL/2001[1997-1998]Status: DisposedITAT Delhi05 Jun 2018AY 1997-1998

Bench: Shri N.K. Saini, Shri Pramod Kumar & Shri Amit Shukla

For Appellant: Shri Deepak Chopra, Amit SrivastavaFor Respondent: Shri T.M. Shiv Kumar, CIT-DR
Section 142(1)Section 3

…proposition highlighted before us in this regard. 54. Before us, regarding the existence of business connection, Mr. Deepak Chopra relied upon the judgment of Hon'ble Supreme Court in the case of CIT vs. R. D. Aggarwal and Co. and Another, reported in (1965) 56 ITR 20 (SC) and submitted that mere performance of some activities in the Indian Territory does not afford a business connection of foreign company in India. What is important to examine here is that the trading activities within the territories should be linked with the trading activities carried on outside the taxable territories. Here, in this case, he…

DCIT, Chandigarh vs. M/S Winsome Textiles Industries Ltd., Chandigarh

In the result, all the appeals of the Revenue are dismissed

ITA 933/CHANDI/2017[2012-13]Status: DisposedITAT Chandigarh18 May 2018AY 2012-13

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumar

For Appellant: Shri. Tej Mohan SinghFor Respondent: Shri. D.S. Kalyan
Section 195Section 40Section 9

…payer cannot be made liable. The Hon'ble Supreme Court thus rejected the contention of the Department by holding that if the sum paid is not chargeable to tax, then no tax is required to be deducted. 3.2.3. As explained, in CIT v. R.D. Aggarwal & Co. [1965] 56 ITR 20 (SC), which stands referred to in CIT v. Toshoku Ltd. [1980] 125 ITR 525 (SC), and continues to govern the field, business connection involves the relationship between the business carried on by a non- resident (outside taxable territories), which yields profits or gains, and some activity in the taxable territories which contributes directly or in…

DCIT, Chandigarh vs. M/S Winsome Yarns Ltd., Chandigarh

In the result, all the appeals of the Revenue are dismissed

ITA 932/CHANDI/2017[2011-12]Status: DisposedITAT Chandigarh18 May 2018AY 2011-12

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumar

For Appellant: Shri. Tej Mohan SinghFor Respondent: Shri. D.S. Kalyan
Section 195Section 40Section 9

…payer cannot be made liable. The Hon'ble Supreme Court thus rejected the contention of the Department by holding that if the sum paid is not chargeable to tax, then no tax is required to be deducted. 3.2.3. As explained, in CIT v. R.D. Aggarwal & Co. [1965] 56 ITR 20 (SC), which stands referred to in CIT v. Toshoku Ltd. [1980] 125 ITR 525 (SC), and continues to govern the field, business connection involves the relationship between the business carried on by a non- resident (outside taxable territories), which yields profits or gains, and some activity in the taxable territories which contributes directly or in…

DCIT, Chandigarh vs. M/S Winsome Yarns Ltd., Chandigarh

In the result, all the appeals of the Revenue are dismissed

ITA 804/CHANDI/2017[2012-13]Status: DisposedITAT Chandigarh18 May 2018AY 2012-13

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumar

For Appellant: Shri. Tej Mohan SinghFor Respondent: Shri. D.S. Kalyan
Section 195Section 40Section 9

…payer cannot be made liable. The Hon'ble Supreme Court thus rejected the contention of the Department by holding that if the sum paid is not chargeable to tax, then no tax is required to be deducted. 3.2.3. As explained, in CIT v. R.D. Aggarwal & Co. [1965] 56 ITR 20 (SC), which stands referred to in CIT v. Toshoku Ltd. [1980] 125 ITR 525 (SC), and continues to govern the field, business connection involves the relationship between the business carried on by a non- resident (outside taxable territories), which yields profits or gains, and some activity in the taxable territories which contributes directly or in…

DCIT, C-4(1), Chandigarh vs. M/S Winsome Yarns Ltd, Chandigarh

In the result, all the appeals of the Revenue are dismissed

ITA 1321/CHANDI/2017[2013-14]Status: DisposedITAT Chandigarh18 May 2018AY 2013-14

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumar

For Appellant: Shri. Tej Mohan SinghFor Respondent: Shri. D.S. Kalyan
Section 195Section 40Section 9

…payer cannot be made liable. The Hon'ble Supreme Court thus rejected the contention of the Department by holding that if the sum paid is not chargeable to tax, then no tax is required to be deducted. 3.2.3. As explained, in CIT v. R.D. Aggarwal & Co. [1965] 56 ITR 20 (SC), which stands referred to in CIT v. Toshoku Ltd. [1980] 125 ITR 525 (SC), and continues to govern the field, business connection involves the relationship between the business carried on by a non- resident (outside taxable territories), which yields profits or gains, and some activity in the taxable territories which contributes directly or in…

DCIT(It)4(2)(2), Mumbai vs. Star Cruise Management Limited, Mumbai

In the result, these appeals by the Revenue stands dismissed

ITA 2632/MUM/2016[2010-11]Status: DisposedITAT Mumbai02 May 2018AY 2010-11

Bench: Shri Shamim Yahya, Am & Shri Ravish Sood, Jm आयकर अपील सं./I.T.A. Nos.2632 & 2633/Mum/2016 ("नधा"रण वष" / Assessment Years: 2010-11 & 2011-12) Dy. Cit(It)-4(2)(2), M/S. Star Cruise Management Limited बनाम/ Scindia House, Ballard Pier, C/O. Kanodia Chauhan & Co., Cas., G- N.M. Road, Mumbai-400 038 15, Everest, Tardeo Road, Vs. Mumbai-400 034 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aahcs 0352 F (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Shri M. V. Rajguru ""यथ" क" ओर से/Respondent By : Shri Vipul Joshi सुनवाई क" तार"ख / : 19.04.2018 Date Of Hearing घोषणा क" तार"ख / : 02.05.2018 Date Of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: These Are Appeals By The Revenue Against The Respective Orders Of The Ld. Commissioner Of Income Tax (Appeals), Pertaining To The Assessment Years 2010-11 & 2011-12. Since The Issues Are Common & Connected & The Appeals Were Heard Together These Have Been Disposed Of By This Common Order.

For Appellant: Shri M. V. RajguruFor Respondent: Shri Vipul Joshi
Section 5(2)(a)Section 9(1)

…nover of the non-resident from India. For arriving at his decision, the AO has reproduced the duties and obligations of the Indian counterpart i.e. SCITSPL as per the agreement and has relied on the Supreme Court decision in the case of R D Aggarwal & Co. (56 ITR 20) and Anglo-French Textile Co Ltd (23 ITR 101). 7. Upon the assessee’s appeal, the ld. Commissioner of Income Tax (Appeals) decided the issue in favour of the assessee by placing reliance upon a series of ITAT decision in the assessee’s own case. 8. Against this order, the assessee is in appeal before us. 9. We have heard both the counsel and p…

Paradeep Phosphates Ltd., Bhubaneswar vs. JCIT, Range-1, Bhubaneswar

In the result, appeal of the assessee is allowed for statistical purposes and appeal of Revenue is dismissed

ITA 560/CTK/2013[2009-10]Status: DisposedITAT Cuttack27 Apr 2018AY 2009-10
For Appellant: Shri B.K.Mahapatra/A.K.Sabat, ARFor Respondent: Shri Saad Kidwai, CITDR

…cipal basis. Assessee has not entered into any contract with foreign parties rather assessee has procured the goods at its own cost like payment of customs duty, freight, handling charges etc. i.e. on CIF basis. 3. In case of CIT vs, R.D, Agrawal & Co. (1965) 56 ITR 20(SC), Hon'ble Apex Court has stated that 'In the case of assessee company the purchases are made by placing the purchase order and delivery are made on CIF basis, payment is remitted to foreign sellers in advance, hence, question the taxing the foreign exporters do not arise in India'. Thus, in the case of the assessee, when the sum paid to foreign…

Nagase & Co.Ltd, Mumbai vs. DCIT (It) 4(2), Mumbai

The appeals of the Revenue are dismissed

ITA 8598/MUM/2011[2006-07]Status: DisposedITAT Mumbai27 Apr 2018AY 2006-07

Bench: Shri G.S. Pannu & Shri Ram Lal Negi: (A.Y : 2005-06)

For Appellant: Shri Nitesh JoshiFor Respondent: Shri M.V. Rajguru
Section 133ASection 148

…ified in clauses (a) to (c), referred to above, within the fold of the expression business connection which has to be understood in its ordinary meaning. We would like to refer to the judgment of the Hon’ble Supreme Court in the case of R. D. Aggarwal and Co.(56 ITR 20). The expression business connection has been defined as under: “The expression business connection postulates a real and intimate relation between the trading activity carried on outside the tax able territories and the trading activities within the territories, the relation between the two contributing to the earning of income by the non- reside…

DDIT (It) 4(2), Mumbai vs. Nagase & Co. Ltd, Mumbai

The appeals of the Revenue are dismissed

ITA 8205/MUM/2011[2006-07]Status: DisposedITAT Mumbai27 Apr 2018AY 2006-07

Bench: Shri G.S. Pannu & Shri Ram Lal Negi: (A.Y : 2005-06)

For Appellant: Shri Nitesh JoshiFor Respondent: Shri M.V. Rajguru
Section 133ASection 148

…ified in clauses (a) to (c), referred to above, within the fold of the expression business connection which has to be understood in its ordinary meaning. We would like to refer to the judgment of the Hon’ble Supreme Court in the case of R. D. Aggarwal and Co.(56 ITR 20). The expression business connection has been defined as under: “The expression business connection postulates a real and intimate relation between the trading activity carried on outside the tax able territories and the trading activities within the territories, the relation between the two contributing to the earning of income by the non- reside…

ACIT, New Delhi vs. Smt. Sangeeta Khanna, New Delhi

ITA 1522/DEL/2014[2010-11]Status: DisposedITAT Delhi23 Apr 2018AY 2010-11

Bench: Shri N.K. Saini & Shri Kuldip Singh

For Appellant: Shri U.S. Kochar, AdvocateFor Respondent: Shri Amit Jain, Senior DR
Section 195Section 40Section 40(1)(i)

…and some activities in India, which contributes directly or indirectly to the earning of those profits or gains. It predicates an element of continuity between the business of the non-resident and the activity in India [CIT Vs. R.D. Aggarwal and Company(1965) 56 ITR 20 (SC), Carborandum & Co. Vs. CIT(1977) 2 SCC 862 and Ishikawajma-Harima Heavy Industries ltd. Vs. Director of income Tax, Mumbai(2007) 3 SCC 481]. The test which is to be applied is to examine the activities in India and whether the said activities have contributed to the business income earned by the non-resident, which has accrued, arisen or recei…

DCIT, Bhubaneswar vs. M/S. Paradeep Phosphates Limited, Bhubaneswar

In the result, both appeals of the assessee and revenue are dismissed

ITA 331/CTK/2015[2008-09]Status: DisposedITAT Cuttack09 Nov 2017AY 2008-09
For Appellant: Shri B.K.Mahapatra, ARFor Respondent: Shri A.K.Mohapatra, CITDR
Section 142(1)Section 143(3)Section 144ASection 147Section 148Section 40

…cipal basis. Assessee has not entered into any contract with foreign parties rather assessee has procured the goods at its own cost like payment of customs duty, freight, handling charges etc. i.e. on CIF basis. 3. In case of CIT vs. R.D. Agrawal & Co. (1965) 56 ITR 20(SC), Hon'ble Apex Court has stated that 'In the case of assessee company the purchases are made by placing the purchase order and delivery are made on CAF basis, payment is remitted to foreign sellers in advance, hence, question the taxing the foreign exporters do not arise in India. Thus, in the case of the assessee, when the sum paid to foreign c…

Paradeep Phosphates Limited, Bhubaneswar vs. ACIT, Bhubaneswar

In the result, both appeals of the assessee and revenue are dismissed

ITA 315/CTK/2015[2008-09]Status: DisposedITAT Cuttack09 Nov 2017AY 2008-09
For Appellant: Shri B.K.Mahapatra, ARFor Respondent: Shri A.K.Mohapatra, CITDR
Section 142(1)Section 143(3)Section 144ASection 147Section 148Section 40

…cipal basis. Assessee has not entered into any contract with foreign parties rather assessee has procured the goods at its own cost like payment of customs duty, freight, handling charges etc. i.e. on CIF basis. 3. In case of CIT vs. R.D. Agrawal & Co. (1965) 56 ITR 20(SC), Hon'ble Apex Court has stated that 'In the case of assessee company the purchases are made by placing the purchase order and delivery are made on CAF basis, payment is remitted to foreign sellers in advance, hence, question the taxing the foreign exporters do not arise in India. Thus, in the case of the assessee, when the sum paid to foreign c…

M/S. Nortel Networks India International Inc., Gurgaon vs. DDIT, New Delhi

ITA 1087/DEL/2014[2010-11]Status: DisposedITAT Delhi26 Sept 2017AY 2010-11

Bench: Sh. N.K.Saini & Sh.K.N.Charry

Section 143(3)

…t then examined the taxability of the transaction under the Act, in the light of the provisions of section 9(1) of the Act and the phrase “business connection” as has been discussed by the Hon’ble Supreme Court in the case of CIT v. R.D. Aggarwal &Co. (1965) 56 ITR 20 (SC), inasmuch as the provisions of section 9(1) of the Act clearly provide that 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…

M/S Nortal Networks India International Inc., Gurgaon vs. ADIT, New Delhi

ITA 3315/DEL/2012[2009-10]Status: DisposedITAT Delhi26 Sept 2017AY 2009-10

Bench: Sh. N.K.Saini & Sh.K.N.Charry

Section 143(3)

…t then examined the taxability of the transaction under the Act, in the light of the provisions of section 9(1) of the Act and the phrase “business connection” as has been discussed by the Hon’ble Supreme Court in the case of CIT v. R.D. Aggarwal &Co. (1965) 56 ITR 20 (SC), inasmuch as the provisions of section 9(1) of the Act clearly provide that 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…

M/S Nortal Networks India International Inc., Gurgaon vs. ADIT, New Delhi

ITA 3313/DEL/2012[2006-07]Status: DisposedITAT Delhi26 Sept 2017AY 2006-07

Bench: Sh. N.K.Saini & Sh.K.N.Charry

Section 143(3)

…t then examined the taxability of the transaction under the Act, in the light of the provisions of section 9(1) of the Act and the phrase “business connection” as has been discussed by the Hon’ble Supreme Court in the case of CIT v. R.D. Aggarwal &Co. (1965) 56 ITR 20 (SC), inasmuch as the provisions of section 9(1) of the Act clearly provide that 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…

Mitsubishi Corporation India Pvt. Ltd., New Delhi vs. DCIT, Circle- 16(2), New Delhi

ITA 5184/DEL/2017[2013-14]Status: DisposedITAT Delhi22 Sept 2017AY 2013-14

Bench: Shri R.K. Panda & Shri Kuldip Singh

For Appellant: Shri Tarandeep Singh, AdvocateFor Respondent: Shri H.K. Choudhary, CIT DR
Section 143Section 144CSection 40

…any business connection in India, that income shall not be deemed to accrue or arise to him in India in terms of section 9(1)(i) of the Act and will get immunity from Indian taxation. The Hon’ble Supreme Court in CIT vs. R.D. Aggarwal & Co. and Another (1965) 56 ITR 20 (SC) considered a case in which the assessee obtained orders from dealers in Amritsar. Such orders were accepted by non-resident. Price was received and delivery was given outside India. No operations, such as, procuring of material or manufacture of finished goods, took place within India. It was held that no business connection was there and, in…

DCIT, Circle-1(1), Bhubaneswar vs. M/S. Paradeep Phosphates Limited, Bhubaneswar

In the result, appeal filed by the revenue is dismissed and that of

ITA 289/CTK/2014[2010-11]Status: DisposedITAT Cuttack04 Aug 2017AY 2010-11

Bench: S/Shri N.S Saini & Pavan Kumar Gadaleassessment Year : 2010-2011

For Appellant: Shri B.K.MohapatraFor Respondent: Shri Kunal Singh, CIT DR
Section 195Section 195(1)Section 195(2)Section 197Section 263Section 40Section 92

…ipal basis. Assessee has not entered into any contract with foreign parties rather assessee has procured the goods at its own cost like payment of customs duty, freight, handling charges etc. i.e. on CIF basis. 3. In case of CIT vs. R.D. Agrawal & Co. (1965) 56 ITR 20(SC), Hon'ble Apex Court has stated that 'In the case of assessee company the purchases are made by placing the purchase order and delivery are made on CIF basis, payment is remitted to foreign sellers in advance, hence, question the taxing the foreign exporters do not arise in India'. Thus, in the case of the assessee, when the sum paid to foreign…