CIT v. Toshoku Ltd.

125 ITR 525Supreme Court of India1980#295 most cited

What is CIT v. Toshoku Ltd. authority for?

A non-resident commission agent is not chargeable to tax in India on commission income if no business operations are carried out in India. Consequently, no TDS is required under Section 195 on such payments.

270

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2007 to 2026.

Also referred to as

CIT v. Toshoku Ltd. · Toshoku Ltd. · Section 9(1)(i) · Section 195 · Section 40(a)(i) · non-resident commission agent · sales commission taxable in India · business connection · TDS on non-residents · DTAA override · deemed to accrue or arise

Sections most often in play

Section 40(a)(i)Section 195Section 37(1)Section 143(3)Section 9(1)(i)Section 9(1)(vii)Section 115JBSection 1961

Issues it is cited on

section 5(2)(b)section 9(1)(i)section 195(1)section 195(2)section 5(2)business connectionsection 40(a)(i)permanent establishmentfees for included servicessection 195section 9(1)section 9(1)(vii)

Judgments citing CIT v. Toshoku Ltd.

Allseas Marine Contractors Sa, Mumbai vs. DDIT (It) 1(1), Mumbai

In the result, the appeal is partly allowed

ITA 4656/MUM/2015[2008-09]Status: DisposedITAT Mumbai07 Sept 2018AY 2008-09

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2008-09 Allseas Marine Contractors Dy. Director Of Income Sa C/O Nangia& Company Tax-(International) Vs. Unit No. 1101, 11Th Floor, B Taxation)-1(1) Wing, Peninsula Business Mumbai. Park, Ganpatraokadam Marg, Lower Parel, Mumbai-400013. Pan No. Aagca0967P Appellant Respondent Assessee By : Mr. Porus Kaka, Senior Advocate Revenue By : Mr. M.V. Raj Guru, Dr Date Of Hearing : 11/06/2018 Date Of Pronouncement : 07/09/2018

For Appellant: Mr. Porus Kaka, Senior AdvocateFor Respondent: Mr. M.V. Raj Guru, DR
Section 143(3)Section 44BSection 5Section 9

…a whole should be apportioned on a reasonable basis in the event of business being carried on both within and outside India, the appellant placed reliance on the decision in Corborandum Company v. CIT [1977] [108 ITR 355 (SC)], CIT v. Toshoku Limited [1980] [125 ITR 525 (SC)], Best and Company v. CIT (60ITR11), Anglo-French Textile Company Limited v. CIT [231ITR101]. Stating the above, the appellant submitted before the AO that the AO had issued a withholding tax order u/s 195(2), wherein he directed RIL “to withhold tax @ 2% on the value of Offshore supplies”. It was Allseas Marine 9 submitted by the appellant…

Asst CIT 19(3), Mumbai vs. S.K. Age Exports, Mumbai

The appeal of the Revenue is dismissed

ITA 2524/MUM/2017[2013-14]Status: DisposedITAT Mumbai21 Aug 2018AY 2013-14

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2013-14 Acit-19(3), M/S S.K. Age Exports, R. No.206M 2Nd Floor, 3-A, Shivsagar Estate, Dr. बनाम/ Matru Mandir, Annie Besant Road, Worli, Vs. Tardeo Raod, Mumbai-400018 Mumbai-400007 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaafs4534R

Section 143(3)Section 195

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ,‘जे’’,मुंबई। IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, ‘J’ MUMBAI "ी जो"ग"दर "संह, "या"यक सद"य एवं "ी मनोज कुमार अ"वाल, लेखा सद"य, के सम" Before Shri Joginder Singh, Judicial Member, and Shri Manoj Kumar Aggarwal, Accountant Member Assessment Year: 2013-14 ACIT-19(3), M/s S.K. Age Exports, R. No.206m 2nd Floor, 3-A, Shivsagar Estate, Dr. बनाम/ Matru Mandir, Annie Besant Road, Worli, Vs. Tardeo Raod, Mumbai-400018 Mumbai-400007 ("नधा"रती /Assessee) (राज"व /Revenue) PAN. No. AAAFS4534R राज"व क" ओर से / Revenue by Shri A. Mohan- DR "नधा"रती क" ओर से / Assessee by Shri…

M. K. Shah Exports Ltd., Kolkata vs. DCIT, Cir-4, Kolkata

In the result, appeal filed by the Revenue in ITA No

ITA 507/KOL/2016[2010-2011]Status: DisposedITAT Kolkata17 Aug 2018AY 2010-2011

Bench: Shri S. S. Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita Nos.506 & 507/Kol/2017 ("नधा"रणवष" / Assessment Years: 2009-10& 2010-11) M/S. M. K. Shah Exports Ltd. Vs. D.C.I.T, Circle-4, Kolkata

For Appellant: Shri S. Jhajharia, ARFor Respondent: ShriSanjay Paul & Saurabh Kumar, Addl. CIT (Sr.DR)
Section 143(3)Section 14A

…applicable in case of export commission paid by assessee, especially when the foreign agent has rendered services outside India. For that we rely on the judgment of the Hon’ble Supreme Court in the case of Commissioner of Income Tax vs Toshoku Limited (1980) 125 ITR 525 (SC), wherein it was held that since the commission income earned by the foreign agent for operations carried outside the territory of India cannot be taxed in India and as such the assessee is not duty bound to deduct income tax at source on such income and as such M/s. M. K. Shah Exports Ltd. Revenue-ITA Nos.1274 & 1275/Kol/2016,andAssessee- 50…

M. K. Shah Exports Ltd., Kolkata vs. DCIT, Cir-4, Kolkata

In the result, appeal filed by the Revenue in ITA No

ITA 506/KOL/2016[2009-2010]Status: DisposedITAT Kolkata17 Aug 2018AY 2009-2010

Bench: Shri S. S. Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita Nos.506 & 507/Kol/2017 ("नधा"रणवष" / Assessment Years: 2009-10& 2010-11) M/S. M. K. Shah Exports Ltd. Vs. D.C.I.T, Circle-4, Kolkata

For Appellant: Shri S. Jhajharia, ARFor Respondent: ShriSanjay Paul & Saurabh Kumar, Addl. CIT (Sr.DR)
Section 143(3)Section 14A

…applicable in case of export commission paid by assessee, especially when the foreign agent has rendered services outside India. For that we rely on the judgment of the Hon’ble Supreme Court in the case of Commissioner of Income Tax vs Toshoku Limited (1980) 125 ITR 525 (SC), wherein it was held that since the commission income earned by the foreign agent for operations carried outside the territory of India cannot be taxed in India and as such the assessee is not duty bound to deduct income tax at source on such income and as such M/s. M. K. Shah Exports Ltd. Revenue-ITA Nos.1274 & 1275/Kol/2016,andAssessee- 50…

ACIT, Circle-4(1), Kolkata vs. M/S. Goodrick Group Ltd., Kolkata

ITA 2088/KOL/2016[2011-12]Status: DisposedITAT Kolkata17 Aug 2018AY 2011-12

Bench: Shri S.S.Godara & Dr. A.L. Saini

Section 143(3)Section 40

…ntly possible in the given facts and circumstances do not raise any substantial question of law and accordingly dismissed the appeal. The A.Rs of the appellant also referred to the decision of the Hon 'ble Supreme Court in the Case of CIT Vs. Toshoku Limited (125 ITR 525) and emphasized the observations of the Court at page 531 which is as under: "In the instant case, the non-resident assessee did not carry on any business operation in the taxable territories. They act as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchaser from abro…

ACIT, Circle-4(1), Kolkata vs. M/S. Goodrick Group Ltd., Kolkata

ITA 2087/KOL/2016[2010-11]Status: DisposedITAT Kolkata17 Aug 2018AY 2010-11

Bench: Shri S.S.Godara & Dr. A.L. Saini

Section 143(3)Section 40

…ntly possible in the given facts and circumstances do not raise any substantial question of law and accordingly dismissed the appeal. The A.Rs of the appellant also referred to the decision of the Hon 'ble Supreme Court in the Case of CIT Vs. Toshoku Limited (125 ITR 525) and emphasized the observations of the Court at page 531 which is as under: "In the instant case, the non-resident assessee did not carry on any business operation in the taxable territories. They act as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchaser from abro…

JCIT, (OSD), Cir-4(1), Kolkata vs. M/S M. K. Shah Exports Ltd., Kolkata

In the result, appeal filed by the Revenue in ITA No

ITA 1275/KOL/2016[2010-2011]Status: DisposedITAT Kolkata17 Aug 2018AY 2010-2011

Bench: Shri S. S. Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita Nos.506 & 507/Kol/2017 ("नधा"रणवष" / Assessment Years: 2009-10& 2010-11) M/S. M. K. Shah Exports Ltd. Vs. D.C.I.T, Circle-4, Kolkata

For Appellant: Shri S. Jhajharia, ARFor Respondent: ShriSanjay Paul & Saurabh Kumar, Addl. CIT (Sr.DR)
Section 143(3)Section 14A

…applicable in case of export commission paid by assessee, especially when the foreign agent has rendered services outside India. For that we rely on the judgment of the Hon’ble Supreme Court in the case of Commissioner of Income Tax vs Toshoku Limited (1980) 125 ITR 525 (SC), wherein it was held that since the commission income earned by the foreign agent for operations carried outside the territory of India cannot be taxed in India and as such the assessee is not duty bound to deduct income tax at source on such income and as such M/s. M. K. Shah Exports Ltd. Revenue-ITA Nos.1274 & 1275/Kol/2016,andAssessee- 50…

JCIT, (OSD), Cir-4(1), Kolkata vs. M/S M. K. Shah Exports Ltd., Kolkata

In the result, appeal filed by the Revenue in ITA No

ITA 1274/KOL/2016[2009-2010]Status: DisposedITAT Kolkata17 Aug 2018AY 2009-2010

Bench: Shri S. S. Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita Nos.506 & 507/Kol/2017 ("नधा"रणवष" / Assessment Years: 2009-10& 2010-11) M/S. M. K. Shah Exports Ltd. Vs. D.C.I.T, Circle-4, Kolkata

For Appellant: Shri S. Jhajharia, ARFor Respondent: ShriSanjay Paul & Saurabh Kumar, Addl. CIT (Sr.DR)
Section 143(3)Section 14A

…applicable in case of export commission paid by assessee, especially when the foreign agent has rendered services outside India. For that we rely on the judgment of the Hon’ble Supreme Court in the case of Commissioner of Income Tax vs Toshoku Limited (1980) 125 ITR 525 (SC), wherein it was held that since the commission income earned by the foreign agent for operations carried outside the territory of India cannot be taxed in India and as such the assessee is not duty bound to deduct income tax at source on such income and as such M/s. M. K. Shah Exports Ltd. Revenue-ITA Nos.1274 & 1275/Kol/2016,andAssessee- 50…

ACIT, New Delhi vs. M/S. Maharani Enterprises, Delhi

The appeal of the Revenue is dismissed and Cross- Objection of the assessee is allowed

ITA 5806/DEL/2014[2011-12]Status: DisposedITAT Delhi24 Jul 2018AY 2011-12

Bench: Shri R. K. Panda & Ms Suchitra Kamble

Section 142(1)Section 143(1)Section 143(2)Section 194CSection 40

…n’ in the above 8 section. The above finding is contrary to the decision of the Hon'ble Delhi High Court in EON Technologies P Ltd 343 ITR 366 (Case Law Compilation pages 1-6). It may also be noted that the decision of the Supreme Court in CIT Vs Toshoku Ltd 125 ITR 525 still holds ground where such payments were held to non-toxable in India in the absence of T&) business connection of the payee agent in India and no activities are done by such agent in India. The relevance of the ruling by the AR have been considered in the past to show whether such ruling have binding effect on the judicial authorities in the…

Ananth Technologies Limited., Hyderabad vs. Dy. Commissioner of Income Tax, Circle-1(1)., Hyderabad

In the result, the appeal of assessee is allowed

ITA 1246/HYD/2017[2013-14]Status: DisposedITAT Hyderabad20 Jul 2018AY 2013-14

Bench: Shri B. Ramakotaiah & Shri Challa Nagendra Prasad

For Appellant: Shri A.V. Raghuram, ARFor Respondent: Smt. N. Swapna, DR
Section 195Section 40Section 9Section 9(1)(i)

…in the case of Sri Ram Refregeration Industries Vs. ITO [361 ITR 119] (AP). Further, the Hon'ble :- 6 -: I.T.A. No. 1246/Hyd/2017 High Court also held that following the principles laid down by the Hon'ble Supreme Court in the case of CIT Vs. Toshoku Ltd., [125 ITR 525] (SC) that making up of the entries in the books of account of assessee cannot be taken into be receipt actual or constructive by the non-resident sales agents. In view of that, prima-facie, the amounts paid from India does not establish that income has accrued or arisen in India as the services are not rendered in India at all and assessee has n…

DCIT, Circle-5(1), Kolkata vs. M/S. Somany Ceramics Ltd. ( Formerly Known As Spl Ltd.), Kolkata

In the result, the appeal filed by the revenue is dismissed

ITA 80/KOL/2015[2004-2005]Status: DisposedITAT Kolkata19 Jul 2018AY 2004-2005

Bench: : Shri J. Sudhakar Reddy & Shri S.S.Viswanethra Ravia.Y 2004-05

For Respondent: Shri Saurabh Kumar, Addl. CIT, ld. Sr.DR
Section 143Section 143(3)

…Ishikawajma­Harima Heavy Industries Ltd Vs DIT (288 ITR 408) and CIT Vs M/s. Hyundal Heavy Industries Co Ltd (291 ITR 482) On the issue of commission to foreign based agent, similar view has been taken by the Apex court in the case of CIT vs M/s.Toshoku Ltd (125 ITR 525 (SC). Similar view has been taken by Delhi High Court in the case of CIT Vs M/s. EON Technology (P) Ltd (15 Taxmann.com 391). Even the CBDT's Circular No. 163 dated 29.05.1975 and Circular No.786 dated 07.02.2000 make it clear that when no activity is carried out by non­resident commission agent in India, no income is arisen in India. This princi…

DCIT (It) - 3(1)(2), Mumbai vs. Kotak Securities Ltd., Mumbai

In the result, all the three appeals filed by the revenue for assessment year 2015-16 are dismissed

ITA 2726/MUM/2016[2015-16 ]Status: DisposedITAT Mumbai12 Jul 2018

Bench: Shri B.R. Baskaran (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2015-16 Assessment Year: 2015-16 & Assessment Year: 2015-16 The Dcit (It)-3(1)(2), M/S Kotak Securities Ltd., Plot No. C-27, Bkc, Room No. 113, 1St Floor, Bandra Kurla Complex, Scindia House, Ballard Estate, Vs. Bandra (East), Mumbai - 400038 Mumbai – 400051 Pan : Aaack3436F (Appellant) (Respondent)

For Respondent: Shri M.V. Rajguru (Sr. DR)
Section 248

…ued or arose in India or could be deemed to accrue or arise in India under Section 9 of the Act and thus, is not taxable in India. Assessment Year: 2015-16 b) Reliance is placed on the Hon’ble Supreme Court of India in the case of CIT v. Toshoku Ltd. (1980] 125 ITR 525 (Refer combined Paper Book Pg. Nos. 43 to 47) where It has held that it no operations of business are carried out in the 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. In view of the above, it is submitted that amount receiv…

The DCIT, Panchmahal Circle, Panchmahal vs. The Panchmahal Steel Ltd., Panchmahal

In the result, appeal of the Revenue is dismissed

ITA 634/AHD/2017[2013-14]Status: DisposedITAT Ahmedabad09 Jul 2018AY 2013-14

Bench: Shri Rajpal Yadav & Shri Amarjit Singhआयकर अपील सं./ Ita No.634/Ahd/2017 "नधा"रण वष"/Asstt. Year: 2013-2014 Dcit, Panchmahal Circle Vs. The Panchmahal Steel Ltd. Godhra 389 001. Gidc, Kalol Dist: Panchmahal,Gujarat.

For Appellant: Shri M.J. Shah, ARFor Respondent: Shri V.K. Singh, Sr.DR
Section 143(2)Section 195Section 40

…oceeds remitted by the purchasers from abroad did not amount to an operation carried out by the non-resident commission agent in India as contemplated by clause (a) of the Explanation to 9(1) of the Act. The Apex Court in the case of CIT Vs Toshoku Ltd [1980] 125 ITR 525(SC) has categorically held that the commission amounts which were earned by the non-resident for services rendered outside India could not be deemed to be income which had either accrued or arisen in India. Further, in the case of Authority for advance rulings in the case Ind Telesoft(P) Ltd [2004] 267 ITR 725 (AAR) it is held that no tax was ded…

DCIT, New Delhi vs. M/S. Sterling Ornaments (P) Ltd., New Delhi

In the result, the Appeal filed by the Revenue

ITA 4395/DEL/2014[2011-12]Status: DisposedITAT Delhi27 Jun 2018AY 2011-12

Bench: Shri H.S. Sidhu & Shri N.K. Billaiya

For Appellant: Sh. Piyush Kaushik, AdvFor Respondent: Sh. K. Tewari, Sr. DR
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 195Section 195(2)Section 40

…xation), Ahmedabad vs. Welspun Corporation Ltd. (2017) 77 taxmann.com 165. ii) Decision of Hon’ble Jurisdictional High Court (Allahabad High Court) in the case of CIT vs. Model Exims (2014) 363 ITR 66 (All.) iii) Decision of the Hon’ble Supreme Court of 125 ITR 525 SC. iv) Decision of Hon’ble Madras High Court in Ltd. (2014) 369 ITR 96. v) Decision of the Hon’ble Madras High Court Ltd. (2014) 367 ITR 155. vi) Decision of Hon’ble Delhi High Court in the case of CIT vs. EON Technology P. Ltd. 343 ITR 366 (Del.) vii) Decision of Delhi ITAT in the case of Divya Creation vs. ACIT (2017) 86 taxmann.com 276…

ACIT, Circle - 8(2), Kolkata vs. M/S. Unimark International Pvt. Ltd., Kolkata

In the result, appeal of revenue is dismissed

ITA 1490/KOL/2017[2010-11]Status: DisposedITAT Kolkata22 Jun 2018AY 2010-11

Bench: "ी ऐ. ट". वक", "यायीक सद"य एवं/And "ी एम .बालागणेश, लेखा सद"य) [Before Shri A. T. Varkey, Jm & Shri M.Balaganesh, Am]

Section 40

…ssee Mr. Satish C. Manaktala for services rendered outside India. The question was whether the commission earned by the non- resident sales agents could be taxed in India. On an identical issue, Hon’ble Supreme Court in the case of CIT Vs. Toshoku Ltd. (1980) 125 ITR 525 has held as under: “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 caused to be remitted by the purchasers from abroad does not amount to an operation carried out by th…

DCIT, Corporate Circle 2(1), Chennai vs. Gkk Exports Pvt.Ltd., Chennai

In the result, the appeal filed by the Revenue is partly allowed

ITA 2146/CHNY/2017[2009-10]Status: DisposedITAT Chennai25 May 2018AY 2009-10

Bench: Shri George Mathan & Shri S. Jayaramanआयकर अपील सं./Ita No.2146/Chny/2017 "नधा"रण वष" /Assessment Year: 2009-10

For Appellant: NoneFor Respondent: Mrs.Sumathi Venkataraman
Section 195Section 2(22)(e)Section 40Section 9(1)(vii)

…d his commission is shown to be remitted directly to him and not received by him on his behalf in India, such an agent is not liable to income tax in India on the commission. This position is also upheld by the Supreme Court in the case of Toshoku Ltd. (1980) 125 ITR 525. However, the above said circular was withdrawn by CBDT vide circular no.7/2009 dated 22.10.2009. As stated by the appellant, the said circular will have effect only from 22.10.2009 and therefore effect of withdrawal of such circular, if any, will not have any bearing for the Assessment Year 2009-10. In view of the above, no TDS is required to be…

The Dy. CIT, Circle-2(1)(1), Ahmedabad vs. M/S. Gujarat Microwax Ltd., Ahmedabad

In the result, Revenue’s appeal stands dismissed

ITA 2503/AHD/2016[2013-14]Status: DisposedITAT Ahmedabad24 May 2018AY 2013-14

Bench: Shri Waseem Ahmed & Shri Mahavir Prasadआयकर अपील सं./I.T.A. No.2503/Ahd/2016 ("नधा"रण वष" / Assessment Year : 2013-14) Dcit, M/S. Gujarat Microwax बनाम/ Cir – 2(1)(1), Pvt. Ltd., Vs. Ahmedabad. 401 & 02, Sarthik Square, Sarkhej Gandhinagar Highway, Bodakdev, Ahmedabad – 380 054 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacg 5593 P .. (अपीलाथ" /Appellant) (""यथ" / Respondent) अपीलाथ" ओर से / Appellant By : Dr. Jayant Jhveri, Sr.D.R. ""यथ" क" ओर से/Respondent By : Shri G.C. Pipara, C.A.

For Appellant: Dr. Jayant Jhveri, Sr.D.RFor Respondent: Shri G.C. Pipara, C.A
Section 195Section 40

…India and the foreign agents did not have any business connection/permanent establishment in India. Some of such judgements are briefly discussed in the subsequent paras. 2.13. The judgment of honourable Supreme Court in the case of CIT vs. Toshoku Limited [125 ITR 525 (SC)] is important on the issue, whereby it has been held that commission earned by the non-resident for acting as the selling agent for the Indian exporter, wherein such non-resident was rendering services from outside India does not accrue in India. In the present case before me also, the foreign selling commission agents are resident of foreig…

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

…he 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 indirectly to the earning of those profits and gains. It predicates an el…

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

…he 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 indirectly to the earning of those profits and gains. It predicates an el…

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

…he 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 indirectly to the earning of those profits and gains. It predicates an el…