“Section 209(3)”
The decision most relied on for Section 209(3) is CIT v. Purshottamdas T. Patel (209 ITR 52), cited in 69 judgments on BharatTax.
Leading authorities on Section 209(3)
Assessment is an integrated process that encompasses the determination of both income and tax. Therefore, any statutory approval required for an assessment, such as under Section 153D, must cover both the income computation and the tax computation, not merely one aspect.
An Indian agent providing marketing services, without the authority to conclude contracts on behalf of a foreign company, does not constitute a Dependent Agent Permanent Establishment (DAPE) for the foreign company in India under DTAA provisions.
The proviso to section 209(1) of the Income-tax Act, 1961, inserted by the Finance Act, 2012, which clarified the liability of non-residents to pay advance tax, has prospective effect only. Consequently, non-residents are not liable to pay interest under section 234B for assessment years prior to AY 2012-13.
When contractual obligations are for an entire project, only the income reasonably attributable to operations carried on in India is deemed to accrue or arise in India and falls within the tax net. This principle applies even in consortium arrangements where members have broader contractual roles, and income from supply of equipment should be characterized appropriately.
A non-resident entity's activities in India are assessed for Permanent Establishment (PE) under Double Taxation Avoidance Agreements, considering types like fixed place, construction, and agency PE, and the applicability of presumptive taxation under sections such as 44BBB.
Deductions under section 80IA are to be computed with reference to the profits of each eligible unit independently, without considering the profits or losses of other units. Each eligible unit is treated as a standalone entity for the purpose of calculating this deduction.
Payments received separately for drawings and documents related to electrical portions of a mill supply contract are considered fees for technical services when they are not linked to the supply contract.
Disallowance under Section 40A(2)(b) is not maintainable when both the payer and payee are assessed at the maximum marginal rate, as it results in a revenue-neutral situation.
