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“business connection”

International TaxSection 9(1)(i)Section 9(1)(i)833 judgments

The decision most relied on for business connection is Ishikawajima Harima Heavy Industries Ltd. v. DIT (288 ITR 408), cited in 394 judgments on BharatTax.

Leading authorities on business connection

Ishikawajima Harima Heavy Industries Ltd. v. DIT
288 ITR 408 · 2007 · Supreme Court
394
citing judgments

Income from offshore supply of goods and services is not taxable in India if the entire transaction, including transfer of ownership and payments, occurs outside India.

CIT v. Toshoku Ltd.
125 ITR 525 · 1980 · Supreme Court
270
citing judgments

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.

Transmission Corporation of Andhra Pradesh v. CIT
239 ITR 587 · 1999 · Supreme Court
243
citing judgments

The Supreme Court lays down principles for deducting tax at source (TDS) under Section 195 on payments to non-residents, including aspects of income deemed taxable in India and the application of Double Taxation Avoidance Agreements (DTAAs) under Section 90.

Motorola Inc. v. Dy. CIT
95 ITD 269 · 2005 · High Court
213
citing judgments

Revenue must demonstrate the existence of a Permanent Establishment (PE) of a foreign enterprise in India, including establishing that transactions underlying a Dependent Agent PE were not at arm's length. Income from the sale of goods is not taxable in India if title and risk in the goods pass outside India.

CIT v. R.D. Aggarwal and Co.
56 ITR 20 · 1965 · Supreme Court
156
citing judgments

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.

CIT v. Faizan Shoes (P.) Ltd.
367 ITR 155 · 2014 · High Court
139
citing judgments

Disallowance under section 40(a)(i) for non-deduction of tax at source on export agency commission paid to a non-resident does not apply if the non-resident's income is not taxable in India under section 9(1), such as when the agent operates outside India without a permanent establishment or business connection in India.

Set Satellite Pte Ltd. v. CIT
307 ITR 205 · 2008 · High Court
96
citing judgments

If a Dependent Agency Permanent Establishment (DAPE) is remunerated at arm's length based on transfer pricing principles, no further profits can be attributed to the foreign enterprise. The principles of profit attribution under DTAA Article 7 are pari-materia to Section 9(1)(i) of the Income Tax Act.

IT Solution Inc. v. ADIT
86 Taxmann.com 240 · 2017 · Supreme Court
73
citing judgments

Once the arm's length principle has been satisfied under transfer pricing provisions, no further profit can be attributed to a person even if they have a permanent establishment in India. A reassessment notice based solely on the allegation of a permanent establishment is unsustainable if the arm's length price procedure has been followed.

Judgments citing business connection

Western Digital Technologies Inc., United States of America vs. Deputy Commissioner of Income-Tax, (International Taxation), Circle-2(1), Bangalore

In the result, the appeal filed by the assessee stands allowed

ITA 343/BANG/2024[2016-17]Status: DisposedITAT Bangalore31 Jul 2024AY 2016-17

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahu

For Appellant: Shri Ajay Rotti, CAFor Respondent: Shri Sunil Kumar Agarwal
Section 234ASection 234BSection 271(1)(c)

case shear non-application of mind by the revenue authorities. 3.7 It is noted that, the authorities have tried to make out a business connection between assessee and SanDisk India for the year under consideration by concluding that the marketing support services rendered by SanDisk India constitutes an agency

Avana Global Fzco, Mumbai vs. Commissioner of Income Tax (International Tax)-1, Mumbai

ITA 2731/MUM/2024[2018-19]Status: DisposedITAT Mumbai30 Jul 2024AY 2018-19

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Smt. Kavitha Rajagopal, Hon'Bleι.Τ.Α. No. 2731/Mum/2024

For Appellant: Shri Dhanesh Bafna, Shri Hardik Nirmal & Ms. HinalFor Respondent: Smt. Shaileja Rai, CIT, D/R
Section 143(3)Section 144C(3)Section 263

held that the assessee is having permanent establishments in India, both fixed and in the form of agent/front office. Having established the business connection, the AO treated the amount of Rs.2,95,36,19,876/- and Rs.13,81,77,981/- as income of the assessee ... opinion that the actual amount of the income accruing or arising to any non-resident person 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

Deputy Commissioner of Income-Tax, Circle-6(1)(1) Bangalore, Koramangala, Bengaluru vs. Shri Bommai Sommappa Basavaraj, Bangalore

In the result, Appeal of the Revenue is dismissed and CO filed by the assessee is dismissed, as not pressed

ITA 922/BANG/2024[2010-11]Status: DisposedITAT Bangalore29 Jul 2024AY 2010-11

Bench: Chandra Poojari & Shri Prakash Chand Yadav

For Appellant: Shri. Sandeep Chalapathy, CAFor Respondent: Shri
Section 147Section 148Section 148(2)Section 250Section 250(4)

RNSIL? Answer: I know Sri. Basavaraj Bommai for more than 15 years in personal capacity. Neither I nor the company has the business connection what so ever with him. Question No.16 While allotting contract work for upperbhadra project, your company/you paid any money to Basavaraj Bommai for getting the contract ... From the above statements of Sri. Naveen R Shetty, it is clear that, the assessee Sri. Basavaraj S Bommai is not having any business connection with M/s. RNS Infrastructure Limited nor has received any amounts as alleged by the assessing officer. (x) The assessee relied on the decision

Deputy Commissioner of Income-Tax, Circle-6(1)(1) Bangalore, Koramangala, Bengaluru vs. Shri Bommai Sommappa Basavaraj, Bangalore

In the result, Appeal of the Revenue is dismissed and CO filed by the assessee is dismissed, as not pressed

ITA 914/BANG/2024[2009-10]Status: DisposedITAT Bangalore29 Jul 2024AY 2009-10

Bench: Chandra Poojari & Shri Prakash Chand Yadav

For Appellant: Shri. Sandeep Chalapathy, CAFor Respondent: Shri
Section 147Section 148Section 148(2)Section 250Section 250(4)

RNSIL? Answer: I know Sri. Basavaraj Bommai for more than 15 years in personal capacity. Neither I nor the company has the business connection what so ever with him. Question No.16 While allotting contract work for upperbhadra project, your company/you paid any money to Basavaraj Bommai for getting the contract ... From the above statements of Sri. Naveen R Shetty, it is clear that, the assessee Sri. Basavaraj S Bommai is not having any business connection with M/s. RNS Infrastructure Limited nor has received any amounts as alleged by the assessing officer. (x) The assessee relied on the decision

Ncr Global Solutions Limited, Ireland vs. Deputy Commissioner of Income-Tax, Circle 2(2)(2), International Tax, New Delhi

In the result, the grounds are sustained and the appeal filed by the Assessee is allowed

ITA 3230/DEL/2023[2021-22]Status: DisposedITAT Delhi26 Jul 2024AY 2021-22

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2021-22 Ncr Global Solutions Limited, Vs Dcit, Lakeview Drive, Circle 2(2)(2), Airside Business Park, International Taxation, Swords, Co. Dublin, K67 N2N9, New Delhi. Ireland. Pan: Aadcn5762E (Appellant) (Respondent) Assessee By : Shri Nageshwar Rao & Ms Viyushti Rawat, Advocate Revenue By : Shri Vizay B. Vasanta, Cit-Dr Date Of Hearing : 25.07.2024 Date Of Pronouncement : 26.07.2024 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 09.08.2023 Of The Dispute Resolution Panel-2, New Delhi (Hereinafter Referred To As ‘The Ld. Drp’) In Objection No.220 Dated 20.01.2023 Arising Out Of The Objection Before It Against The Order Passed U/S 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’), By The Dcit, Circle International Taxation 2(2)(2), New Delhi (Hereinafter Referred To As The Ld. Ao).

For Appellant: Shri Nageshwar Rao &For Respondent: Shri Vizay B. Vasanta, CIT-DR
Section 142(1)Section 143(3)

other business sites in India and detail of agents in India. Also to give a note on why the above do not constitute a ‘business connection’ and a ‘Permanent Establishment’ in India? 7. The assessee submitted that it does not have any branch office / project office / liaison office / godown / warehouse ... Agency PE, Installation PE, Construction PE or Service PE in India in accordance with Article 5 of the India-lreland Tax Treaty or a business connection. 8. Further; the assessee has provided the details of revenue received during the FY 2020-21. The details of the revenue as under- Nature

Itochu Corporation, Japan vs. ACIT (International Taxation), Circle-2(1)(1), New Delhi

The appeal is allowed

ITA 760/DEL/2021[2017-18]Status: DisposedITAT Delhi26 Jul 2024AY 2017-18

Bench: Shri Gs Pannu & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Vizay B. Vasanta, CIT( DR)
Section 143(2)Section 143(3)Section 144C

Itochu India were in relation to purchase functions and not sale functions. It is further submitted that purchase activity is incapable of creating a business connection in India, much less a PE in India. Reliance in this regard was placed on Explanation 1(b) of section

Alan Moses Mozes, Mumbai vs. The Income Tax Officer, Ward-1, Intl. Taxn., Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 542/AHD/2024[2018-19]Status: DisposedITAT Ahmedabad24 Jul 2024AY 2018-19

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Rakesh Kapoor, A.RFor Respondent: Shri Ankit Jain, Sr. DR
Section 10Section 10(4)(ii)Section 5(2)Section 6(1)Section 69A

basic condition per provision of Sec. 6(1). He carries the business of tiles, ceramics in I Hong Kong. He has no business connection with India. He had opened bank accounts in India with HDFC Bank, One NRE Account No 50100221413770 with HDFC Malad Orlem Branch, and other NRO Account ... submitted before us that the assessee was carrying on business in Hong Kong and there is no allegation that he was having any business connection with India and hence no part of the income was taxable in India. During the year under consideration the assessee opened two bank account with

Bticino S.P.A, Italy vs. ACIT Intl. Taxation-1(1)(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 2294/DEL/2023[2020-21]Status: DisposedITAT Delhi24 Jul 2024AY 2020-21

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. S. K. Aggarwal, CAFor Respondent: Sh. Vizay B. Vasanta, CIT-DR
Section 143(3)Section 144C(13)Section 153Section 234ASection 270A

Supreme Court decision on the above case has been considerably overturned with the amendment of Finance Act 2010 where substantial emphasis is given to business connection of the non-residents rather than the situs of business activity of the non-residents regarding taxability of income arising or accruing from India ... included in the total income of the non-resident, regardless of whether the non-resident has a residence or place of business or business connection in India. However, the Karnataka High Court, in a recent judgement in the case of Jindal Thermal Power Company Ltd. vs. DCIT (TDS), has held

Honda Trading Asia Co. Ltd., Thailand vs. DCIT, Intl. Taxation Circle, Noida

ITA 7276/DEL/2018[2015-16]Status: DisposedITAT Delhi23 Jul 2024AY 2015-16

Bench: Shri G.S.Pannu, Hon’Ble & Shri Anubhav Sharma

Section 12Section 143(2)Section 143(3)Section 144CSection 144C(1)Section 234ASection 234D

appeals of the assessee 6 Without prejudice 2. That the AO/DRP grossly erred in law and facts in alleging that the Appellant has a business connection and Permanent Establishment (PE) in India, basis the alleged facts and relationship of Honda Cars India Limited (HCIL) and Honda Motor Co., Ltd. Japan ... AO/DRP grossly erred in law and facts in taxing offshore supplies (by merely relying on TPO order) when Appellant does not have any business connection or PE in India and the supplies made by the Appellant to HCIL are concluded outside India (i.e. title and risk is transferred outside India

Honda Trading Asia Co. Ltd., New Delhi vs. DCIT, Noida

ITA 1160/DEL/2015[2010-11]Status: DisposedITAT Delhi23 Jul 2024AY 2010-11

Bench: Shri G.S.Pannu, Hon’Ble & Shri Anubhav Sharma

Section 12Section 143(2)Section 143(3)Section 144CSection 144C(1)Section 234ASection 234D

appeals of the assessee 6 Without prejudice 2. That the AO/DRP grossly erred in law and facts in alleging that the Appellant has a business connection and Permanent Establishment (PE) in India, basis the alleged facts and relationship of Honda Cars India Limited (HCIL) and Honda Motor Co., Ltd. Japan ... AO/DRP grossly erred in law and facts in taxing offshore supplies (by merely relying on TPO order) when Appellant does not have any business connection or PE in India and the supplies made by the Appellant to HCIL are concluded outside India (i.e. title and risk is transferred outside India

United Inida Insurance Co. Limited, Chennai vs. DCIT, Corporate Circle-3(1), Chennai

In the result, the appeals of the assessee and Revenue are

ITA 42/CHNY/2023[2019-20]Status: DisposedITAT Chennai19 Jul 2024AY 2019-20

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

Acitcorporate Circle-3(1), Chennai vs. M/S. United India Insurance Co. Ltd., Chennai

In the result, the appeals of the assessee and Revenue are

ITA 130/CHNY/2023[2019-20]Status: DisposedITAT Chennai19 Jul 2024AY 2019-20

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

United Inida Insurance Co. Limited, Chennai vs. DCIT, Corporate Circle-3(1), Chennai

In the result, the appeals of the assessee and Revenue are

ITA 13/CHNY/2023[2017-18]Status: DisposedITAT Chennai19 Jul 2024AY 2017-18

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

Acitcorporate Circle-3(1), Chennai vs. M/S. United India Insurance Co. Ltd., Chennai

In the result, the appeals of the assessee and Revenue are

ITA 129/CHNY/2023[2018-19]Status: DisposedITAT Chennai19 Jul 2024AY 2018-19

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

Acitcorporate Circle-3(1), Chennai vs. M/S. United India Insurance Co. Ltd., Chennai

In the result, the appeals of the assessee and Revenue are

ITA 128/CHNY/2023[2017-18]Status: DisposedITAT Chennai19 Jul 2024AY 2017-18

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

ACIT, Chennai vs. United India Insurance Co Ltd, Chennai

In the result, the appeals of the assessee and Revenue are

ITA 426/CHNY/2021[2016-17]Status: DisposedITAT Chennai19 Jul 2024AY 2016-17

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

United India Insurance Co.Ltd, Chennai vs. ACIT Corporate Circle-3(2), Chennai

In the result, the appeals of the assessee and Revenue are

ITA 639/CHNY/2020[2016-17]Status: DisposedITAT Chennai19 Jul 2024AY 2016-17

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

DCIT Corporate Circle 3(2), Chennai vs. United India Insurance Company Ltd., Chennai

In the result, the appeals of the assessee and Revenue are

ITA 1671/CHNY/2019[2015-16]Status: DisposedITAT Chennai19 Jul 2024AY 2015-16

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

DCIT Corporate Circle 3(2), Chennai vs. United India Insurance Company Ltd., Chennai

In the result, the appeals of the assessee and Revenue are

ITA 1670/CHNY/2019[2014-15]Status: DisposedITAT Chennai19 Jul 2024AY 2014-15

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which

United India Insurance Co. Ltd., Chennai vs. DCIT Corporate Circle 3(2), Chennai

In the result, the appeals of the assessee and Revenue are

ITA 1585/CHNY/2019[2014-15]Status: DisposedITAT Chennai19 Jul 2024AY 2014-15

Bench: Shri Mahavir Singh, Vice- & Shri Amitabh Shukla

For Appellant: Ms. V.Pushpa, Sr.Standing
Section 14ASection 195Section 40

Acton account of the fact that said commission has arisen and accrued to non-residents only in India and there is also there is business connection between the assessee and non-resident insurance companies. However, on appeal, the Ld.CIT(A) by following decision of the Tribunal in assessee ... damage or claim, surveyors examined the insured property and estimated damages and entire services were outside India and the non-residents have no business connection in India. Further, the income of the surveyors is not liable for taxation in India, thus, the assessee is not liable to deduct tax, which