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 366,005 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.

Treadsdirect Limited, Coimbatore vs. JCIT, Coimbatore

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

ITA 2794/CHNY/2014[2010-2011]Status: DisposedITAT Chennai30 Dec 2015AY 2010-2011

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. Philip George, Advocate
Section 143(1)Section 143(2)Section 143(3)Section 36Section 36(1)

…ons covering the provisions of TDS applicability, residential status and also CBDT circulars and established that there is no business connection or foreign agent in India and relied on the Judicial decision of Apex Court in the case of CIT vs. Toshoku Ltd 125 ITR 525 wherein it was held that if selling agent outside India does not have business connection in India and such services rendered in India cannot be deemed or accrued received in India. The Supreme Court also considered the provisions of Section 5(2), 9(1) (i), 160 and 163 of the Act and also ITA Nos.2794 &2941/Mds/2014 :- 15 -: circulars and the…

ADIT (It) 1(1), Mumbai vs. Aon Global Insurance Service Ltd, Mumbai

In the result, all the three appeals of revenue are dismissed

ITA 5186/MUM/2009[2008-09]Status: DisposedITAT Mumbai30 Nov 2015AY 2008-09

Bench: Shri R.C.Sharma, Am & Shri Sanjay Garg, Jm आमकय अऩीर सं./Ita Nos.5184 To 5186/Mum/2009 (नििाारण वषा / Assessment Year :2006-2007 To 2008-09) Adit (International Taxation)- Vs. M/S Aon Global 1(1), Mumbai Insurance Service Limited, 302, Dalamal House, Jamnalal Bajaj Marg, Nariman Point, Mumbai-400021 स्थममी रेखम सं./ जीआइआय सं./ Pan/Gir No. : Aaeca 1565 H (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. यमजस्र् की ओर से /Revenue By : Ms. Vandana Sagar यनधमवरयती की ओर से /Assessee By : Shri Porus Kaka सुनर्मई की तमयीख / Date Of Hearing : 30/10/2015 घोषणम की तमयीख/Date Of Pronouncement 30/11/2015 आदेश / O R D E R Per R.C.Sharma (A.M): These Are The Appeals Filed By The Revenue Against The Order Of Cit(A), Mumbai, For The Assessment Years 2006-07 To 2008-09, In The Matter Of Order Passed U/S.201(1)/201(1A) Of The I.T.Act. 2. Common Grounds Have Been Taken In All The Three Assessment Years Under Consideration, Therefore All The Three Appeals Were Heard Together & Now Disposed Off By This Order For Convenience & Brevity. Grounds Taken For The Assessment Year 2006-07 Are As Under :- “1 . On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Holding That The Non-Resident Insurers From The Non Treaty Countries Have No Business Connection In 2

For Appellant: Shri Porus KakaFor Respondent: Ms. Vandana Sagar
Section 133ASection 192Section 195Section 201Section 201(1)

…9(1)(i) of the Act. Thus in absence of any operations being carried out by NRRs in India no income should be deemed to accrue or arise in India u/s.9(1) of the Act which is also fortified by a decision of Supreme Court in the case of CIT Vs. A.P.Toshoku Ltd. (125 ITR 525.). as 'relied by the appellant. 1.3.3 It is seen that the A.O himself has admitted in para 6 of his order passed u/s.201(1)/201(1A) that countries with which India has a DTA, the income of NRRs can be taxed in India only if the NRR has P.E. in India. However, the AO has treated the remittance made 'to AON London U.K. liable to withholding tax on…

ADIT (It) 1(1), Mumbai vs. Aon Global Insurance Service Ltd, Mumbai

In the result, all the three appeals of revenue are dismissed

ITA 5185/MUM/2009[2007-08]Status: DisposedITAT Mumbai30 Nov 2015AY 2007-08

Bench: Shri R.C.Sharma, Am & Shri Sanjay Garg, Jm आमकय अऩीर सं./Ita Nos.5184 To 5186/Mum/2009 (नििाारण वषा / Assessment Year :2006-2007 To 2008-09) Adit (International Taxation)- Vs. M/S Aon Global 1(1), Mumbai Insurance Service Limited, 302, Dalamal House, Jamnalal Bajaj Marg, Nariman Point, Mumbai-400021 स्थममी रेखम सं./ जीआइआय सं./ Pan/Gir No. : Aaeca 1565 H (अऩीरमथी /Appellant) (प्रत्मथी / Respondent) .. यमजस्र् की ओर से /Revenue By : Ms. Vandana Sagar यनधमवरयती की ओर से /Assessee By : Shri Porus Kaka सुनर्मई की तमयीख / Date Of Hearing : 30/10/2015 घोषणम की तमयीख/Date Of Pronouncement 30/11/2015 आदेश / O R D E R Per R.C.Sharma (A.M): These Are The Appeals Filed By The Revenue Against The Order Of Cit(A), Mumbai, For The Assessment Years 2006-07 To 2008-09, In The Matter Of Order Passed U/S.201(1)/201(1A) Of The I.T.Act. 2. Common Grounds Have Been Taken In All The Three Assessment Years Under Consideration, Therefore All The Three Appeals Were Heard Together & Now Disposed Off By This Order For Convenience & Brevity. Grounds Taken For The Assessment Year 2006-07 Are As Under :- “1 . On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Holding That The Non-Resident Insurers From The Non Treaty Countries Have No Business Connection In 2

For Appellant: Shri Porus KakaFor Respondent: Ms. Vandana Sagar
Section 133ASection 192Section 195Section 201Section 201(1)

…9(1)(i) of the Act. Thus in absence of any operations being carried out by NRRs in India no income should be deemed to accrue or arise in India u/s.9(1) of the Act which is also fortified by a decision of Supreme Court in the case of CIT Vs. A.P.Toshoku Ltd. (125 ITR 525.). as 'relied by the appellant. 1.3.3 It is seen that the A.O himself has admitted in para 6 of his order passed u/s.201(1)/201(1A) that countries with which India has a DTA, the income of NRRs can be taxed in India only if the NRR has P.E. in India. However, the AO has treated the remittance made 'to AON London U.K. liable to withholding tax on…

Elve Corporation, Mumbai vs. ACIT 12(3), Mumbai

In the result, the assessee’s appeals are partly allowed for statistical purposes, and the Revenue’s appeal is partly allowed

ITA 6279/MUM/2012[2009-10]Status: DisposedITAT Mumbai20 Nov 2015AY 2009-10

Bench: Shri Joginder Singh, Jm & Shri Sanjay Arora, Am आयकर अपील सं./I.T.A. Nos. 4108/Mum/2012 & 6279/Mum/2012 ("नधा"रण वष" / Assessment Years: 2008-09 & 2009-10) Elve Corporation Asst. Cit-12(3), बनाम/ Elve Chambers, Green Street, Aayakar Bhavan, Vs. Fort, Mumbai-400 001 Mumbai "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafe 4847 R ("नधा"रती/Assessee) (राज"व /Revenue) : & आयकर अपील सं./I.T.A. No. 6229/Mum/2012 ("नधा"रण वष" / Assessment Year: 2009-10) Asst. Cit-12(3), Elve Corporation बनाम/ Aayakar Bhavan, Elve Chambers, Green Street, Vs. Mumbai Fort, Mumbai-400 001 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafe 4847 R (राज"व /Revenue) ("नधा"रती/Assessee) : राज"व क" ओर से/Revenue By : Shri M. C. Naniwadekar "नधा"रती क" ओर से / Assessee By : Shri Vivek Anand Perapurna सुनवाई क" तार"ख / : 21.08.2015 Date Of Hearing घोषणा क" तार"ख / : 20.11.2015 Date Of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: These Are Set Of Three Appeals For Two Consecutive Years, Being Assessment Years (A.Ys.) 2008-09 & 2009-10, By The Assessee & The Revenue Respectively

For Appellant: Shri Vivek Anand PerapurnaFor Respondent: Shri M. C. Naniwadekar
Section 143(3)Section 172Section 195Section 195(2)Section 250(6)Section 40

…nt/s outside India. This, in fact, is a pre-requisite for the application of section 195, as clarified by the Hon’ble Apex Court in G. E. India Technology Centre (P.) Ltd. vs. CIT [2010] 327 ITR 456 (SC), with the Hon’ble Court per CIT vs. Toshoku Ltd. [1980] 125 ITR 525 (SC) having clearly held in the context of commission that income earned by a non-resident for services rendered outside India could not be deemed to accrue or arise in India. The withdrawal of its Circulars Nos. 23 (dated 23.7.1961) and 786 (dated 7.2.2000) by the CBDT vide Circular No. 9/2007 dated 22.10.2009 is not retrospective, even as held…

ACIT Cir 12(3), Mumbai vs. Elve Corporation, Mumbai

In the result, the assessee’s appeals are partly allowed for statistical purposes, and the Revenue’s appeal is partly allowed

ITA 6229/MUM/2012[2009-10]Status: DisposedITAT Mumbai20 Nov 2015AY 2009-10

Bench: Shri Joginder Singh, Jm & Shri Sanjay Arora, Am आयकर अपील सं./I.T.A. Nos. 4108/Mum/2012 & 6279/Mum/2012 ("नधा"रण वष" / Assessment Years: 2008-09 & 2009-10) Elve Corporation Asst. Cit-12(3), बनाम/ Elve Chambers, Green Street, Aayakar Bhavan, Vs. Fort, Mumbai-400 001 Mumbai "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafe 4847 R ("नधा"रती/Assessee) (राज"व /Revenue) : & आयकर अपील सं./I.T.A. No. 6229/Mum/2012 ("नधा"रण वष" / Assessment Year: 2009-10) Asst. Cit-12(3), Elve Corporation बनाम/ Aayakar Bhavan, Elve Chambers, Green Street, Vs. Mumbai Fort, Mumbai-400 001 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafe 4847 R (राज"व /Revenue) ("नधा"रती/Assessee) : राज"व क" ओर से/Revenue By : Shri M. C. Naniwadekar "नधा"रती क" ओर से / Assessee By : Shri Vivek Anand Perapurna सुनवाई क" तार"ख / : 21.08.2015 Date Of Hearing घोषणा क" तार"ख / : 20.11.2015 Date Of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: These Are Set Of Three Appeals For Two Consecutive Years, Being Assessment Years (A.Ys.) 2008-09 & 2009-10, By The Assessee & The Revenue Respectively

For Appellant: Shri Vivek Anand PerapurnaFor Respondent: Shri M. C. Naniwadekar
Section 143(3)Section 172Section 195Section 195(2)Section 250(6)Section 40

…nt/s outside India. This, in fact, is a pre-requisite for the application of section 195, as clarified by the Hon’ble Apex Court in G. E. India Technology Centre (P.) Ltd. vs. CIT [2010] 327 ITR 456 (SC), with the Hon’ble Court per CIT vs. Toshoku Ltd. [1980] 125 ITR 525 (SC) having clearly held in the context of commission that income earned by a non-resident for services rendered outside India could not be deemed to accrue or arise in India. The withdrawal of its Circulars Nos. 23 (dated 23.7.1961) and 786 (dated 7.2.2000) by the CBDT vide Circular No. 9/2007 dated 22.10.2009 is not retrospective, even as held…

Elve Corporation, Mumbai vs. ACIT 12(3), Mumbai

In the result, the assessee’s appeals are partly allowed for statistical purposes, and the Revenue’s appeal is partly allowed

ITA 4108/MUM/2012[2008-09]Status: DisposedITAT Mumbai20 Nov 2015AY 2008-09

Bench: Shri Joginder Singh, Jm & Shri Sanjay Arora, Am आयकर अपील सं./I.T.A. Nos. 4108/Mum/2012 & 6279/Mum/2012 ("नधा"रण वष" / Assessment Years: 2008-09 & 2009-10) Elve Corporation Asst. Cit-12(3), बनाम/ Elve Chambers, Green Street, Aayakar Bhavan, Vs. Fort, Mumbai-400 001 Mumbai "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafe 4847 R ("नधा"रती/Assessee) (राज"व /Revenue) : & आयकर अपील सं./I.T.A. No. 6229/Mum/2012 ("नधा"रण वष" / Assessment Year: 2009-10) Asst. Cit-12(3), Elve Corporation बनाम/ Aayakar Bhavan, Elve Chambers, Green Street, Vs. Mumbai Fort, Mumbai-400 001 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafe 4847 R (राज"व /Revenue) ("नधा"रती/Assessee) : राज"व क" ओर से/Revenue By : Shri M. C. Naniwadekar "नधा"रती क" ओर से / Assessee By : Shri Vivek Anand Perapurna सुनवाई क" तार"ख / : 21.08.2015 Date Of Hearing घोषणा क" तार"ख / : 20.11.2015 Date Of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: These Are Set Of Three Appeals For Two Consecutive Years, Being Assessment Years (A.Ys.) 2008-09 & 2009-10, By The Assessee & The Revenue Respectively

For Appellant: Shri Vivek Anand PerapurnaFor Respondent: Shri M. C. Naniwadekar
Section 143(3)Section 172Section 195Section 195(2)Section 250(6)Section 40

…nt/s outside India. This, in fact, is a pre-requisite for the application of section 195, as clarified by the Hon’ble Apex Court in G. E. India Technology Centre (P.) Ltd. vs. CIT [2010] 327 ITR 456 (SC), with the Hon’ble Court per CIT vs. Toshoku Ltd. [1980] 125 ITR 525 (SC) having clearly held in the context of commission that income earned by a non-resident for services rendered outside India could not be deemed to accrue or arise in India. The withdrawal of its Circulars Nos. 23 (dated 23.7.1961) and 786 (dated 7.2.2000) by the CBDT vide Circular No. 9/2007 dated 22.10.2009 is not retrospective, even as held…

Director of Income Tax vs. E Funds It Solution

The appeals are disposed of

ITA - 735 / 2011HC Delhi05 Feb 2014

…, but keeping in view the mandate and the ratio of the decisions of the Supreme Court in Commissioner of Income Tax, Punjab Vs. R.D. Aggarwal and Company [1965] 56 ITR 20, Commissioner of Income Tax, Andhra Pradesh Vs. Toshoku Ltd., Guntur and Ors. (1980) 125 ITR 525, Ishikawajma-Harima Heavy 2014:DHC:702-DB ITA No. 735/2011+connected appeals Page 77 of 102 Industries Ltd. Vs. Director of Income Tax, Mumbai [2007] 288 ITR 408 and the amendments incorporated and made to Section 9 (1)(i), it has to be held that busi…

Director of Income Tax vs. M/S E Funds It Solution

The appeals are disposed of

ITA/735/2011HC Delhi05 Feb 2014

…, but keeping in view the mandate and the ratio of the decisions of the Supreme Court in Commissioner of Income Tax, Punjab Vs. R.D. Aggarwal and Company [1965] 56 ITR 20, Commissioner of Income Tax, Andhra Pradesh Vs. Toshoku Ltd., Guntur and Ors. (1980) 125 ITR 525, Ishikawajma-Harima Heavy 2014:DHC:702-DB ITA No. 735/2011+connected appeals Page 77 of 102 Industries Ltd. Vs. Director of Income Tax, Mumbai [2007] 288 ITR 408 and the amendments incorporated and made to Section 9 (1)(i), it has to be held that busi…

Commissioner of Income Tax-I vs. Angelique International Ltd

ITA/280/2013HC Delhi23 Sept 2013
Section 260ASection 40Section 5Section 5(2)Section 9Section 9(1)(i)Section 9(1)(vii)

…rence was made to 2013:DHC:4849-DB ITA Nos. 280/2012 & 454/2013 Page 3 of 8 decision of the Supreme Court in CIT versus Toshoku Limited, (1980) 125 ITR 525 (SC). This case relates to Assessment Year 1962-63 and the Indian assessee had paid commission to foreign companies through whom they had procured export orders. Two questions arose; firstly what was the effect of entries in the books of accounts of the Indian assessee and payment to the foreign companies; and secondly whether procurement…

Ishikawajma-Harima Heavy Industries Ltd vs. Director of Income Tax, Mumbai

The appeal is allowed in part and to

C.A. No.-000009-000009 - 2007Supreme Court04 Jan 2007
For Respondent: Director of Income Tax, Mumbai
Section 241

…http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 27 CASE NO.: Appeal (civil) 9 of 2007 PETITIONER: Ishikawajma-Harima Heavy Industries Ltd RESPONDENT: Director of Income Tax, Mumbai DATE OF JUDGMENT: 04/01/2007 BENCH: S.B. Sinha & Dalveer Bhandari JUDGMENT: J U D G M E N T [Arising out of SLP (Civil) No.5318 of 2005] S.B. SINHA, J : Leave granted. Appellant herein is a company incorporated in Japan. It is a resident of the said country. It pays its taxes in Japan. It is engaged, inter alia, in the business of construction of storage tanks as also engineering etc. It formed a co…