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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

Hari Krishna Exports Private Limited, Mumbai vs. Principal Commissioner of Income Tax -5, Mumbai

In the result, appeal of the assessee is allowed

ITA 1858/MUM/2025[2020-21]Status: DisposedITAT Mumbai08 Oct 2025AY 2020-21

Bench: Shri Saktijit Dey, Hon'Ble & Shri Narendra Kumar Billaiya, Hon'Ble

For Appellant: Shri Nitesh Joshi, A/RFor Respondent: Shri Ritesh Misra, CIT D/R
Section 143(3)Section 195Section 263Section 40

आयकर अपीलीय अधिकरण न्यायपीठ, मुंबई। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON'BLE

Huawei International Pte Ltd, Singapore vs. ACIT-Circle 2(1)(1), Intl. Tax, New Delhi

In the result, the appeal of the assessee is allowed and stay application of 7

ITA 2648/DEL/2025[2014-15]Status: DisposedITAT Delhi08 Oct 2025AY 2014-15

Bench: Shri Vikas Awasthy & Shri M. Balaganesh & Sa 298/Del/2025 (Assessment Year: 2014-15) Huawei International Pte. Ltd, Vs. Acit, 51, Change Business Park, Circle-2(1)(1), Central-2, #07-08, The International Signature, Singapore Taxation, New Delhi (Appellant) (Respondent) Pan: Aacch3694N Assessee By : Ms. Kavita Jha, Sr. Adv Shri Himanshu Aggarwal, Adv Shri Yash Nagar, Adv Revenue By: Shri M. S. Nethrapal, Cit Dr Date Of Hearing 01/10/2025 Date Of Pronouncement 08/10/2025

For Appellant: Ms. Kavita Jha, Sr. AdvFor Respondent: Shri M. s. Nethrapal, CIT DR
Section 144CSection 147Section 148Section 148ASection 149

offshore basis. The sales were made from outside India and payments were also received outside India. Accordingly, in the absence of Permanent Establishment / business connection in India, no income accrued or arose in India which can be subjected to tax in India under the provisions of the Act and/or beneficial ... basis ; that the sales were made from outside India and payments were also received outside India ; that it has no permanent establishment (PE) or business connection in India and that no income accrued or arose to it in India either under the provisions of the Act or under the beneficial

M/S Maruti Suzuki India Ltd., New Delhi vs. DCIT, New Delhi

In the result, all the three appeals of the assessee are allowed as indicated above and

ITA 287/DEL/2016[2011-12]Status: DisposedITAT Delhi08 Oct 2025AY 2011-12

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 35Section 43B

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I’: NEW DELHI BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI VIMAL KUMAR

Foods and Inns Limited, Mumbai vs. DCIT, Circle 2(1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4511/MUM/2025[2017-18]Status: DisposedITAT Mumbai30 Sept 2025AY 2017-18

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI PRABHASH SHANKAR (Accountant Member)

Section 143(3)Section 195Section 40Section 9(1)

that the income in the hands of the foreign agents is purely business income accruing outside India, taxable here only if they had a business connection or permanent establishment in India, which has not been demonstrated. He further argued that warehousing charges are simple commercial payments for storage abroad ... this case is clearly business income. Business income of a non-resident becomes taxable in India only if it is linked to a business connection or a permanent establishment within India. Neither the Assessing Officer nor the learned CIT(A) have shown any such presence. The foreign agents carried

Rangsons Schuster Technologies Private Limited, Mandya vs. DCIT, Circle-1(1)& Tps, Mysore

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

ITA 1490/BANG/2025[2018-19]Status: DisposedITAT Bangalore29 Sept 2025AY 2018-19

Bench: Shri. Laxmi Prasad Sahu & Shri. Soundararajan Kassessment Year : 2018-19 M/S. Rangsons Schuster Technologies Pvt. Ltd., Vs. Dcit, Plot No.9, Hebbal Ii Nd Phase Viadb Circle – 1(1) & Tps, Industrial Area, Survey No.36, Belagolahobli, Mysore. Srirangapatna, H.O. Shrirangapattana, Mandya– 571 438,Karnataka. Pan : Aafcr 4493 J Appellant Respondent Assessee By : Shri. V. Srinivasan, Advocate Revenue By : Shri. Subramanian S, Jcit(Dr)(Itat), Bangalore. Date Of Hearing : 23.09.2025 Date Of Pronouncement : 29.09.2025

For Appellant: Shri. V. Srinivasan, AdvocateFor Respondent: Shri. Subramanian S, JCIT(DR)(ITAT), Bangalore
Section 143(2)Section 144Section 147Section 148Section 148ASection 195Section 195BSection 40

section 195 of the Act is not applicable to the assessee since the entire works were carried out outside India and there is no business connection and permanent establishment in India. Therefore, the income received out of India towards rendering of services is not taxable in India. Therefore, the said ... being in the nature of technical or managerial services were rendered outside India and the vendor does not have any permanent-establishment or business connection in India. The profits of the services rendered outside India cannot be taxed in India unless the non-resident has permanent establishment/or business connection

Swiss Re Asia Pte Ltd, Mumbai vs. Deputy Commissioner of Income Tax (International Taxation) Circle-4(2)(2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 1995/MUM/2022[2019-20]Status: DisposedITAT Mumbai25 Sept 2025AY 2019-20

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Sandeep Singh Karhail, Hon’Ble

For Appellant: Shri Anish Thacker & Pranay Gandhi, A/RsFor Respondent: Shri Satya Pal Kumar, CIT D/R
Section 143(2)Section 143(3)Section 144C(13)Section 9(1)(i)

relation to the reinsurance premium amounting to INR 7,034,646,504 earned by the Appellant from its Indian cedents, the Appellant has a business connection in India as per the provisions of section 9(1)(i) of the Act and a Permanent Establishment (PE) in India as per Article ... learned AO has, on the facts and circumstances of the case and in law, erred in holding that the Appellant has a business connection in India as per the provisions of section 9(1)(i) of the Act and PE in India as per Article 5 of the IS treaty

Celestial Vision Limited, Bvi vs. Assisstant Commissioner of Income Tax Int Tax Circle 2(1)(1), Mumbai

Appeal is allowed for statistical purposes

ITA 1625/MUM/2025[2022-23]Status: DisposedITAT Mumbai24 Sept 2025AY 2022-23

Bench: Smt. Beena Pillai & Smt. Renu Jauhriआयकर अपील सं./Ita No.1625/Mum/2025 (निर्धारण वर्ा/Assessment Year: 2022-23) Celestial Vision V/S. Assistant Commissioner Of Limited बिधम Income Tax Circle 2(1)(1) Po Box No. 146, Road 604, Kautilya Bhawan, G Block, Town, Tortola, British Bandra Kurla Complex, Bandra Virgin Islands (East)400051. 111000. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No: Aaicc1160A Appellant/अपीलधथी .. Respondent/प्रनिवधदी निर्धाररिी की ओर से /Assessee By: Shri. Vipul J. Shah-Adv. रधजस्व की ओर से /Revenue By: Shri Krishna Kumar Sr Dr सुिवधई की िधरीख / Date Of Hearing 05.08.2025 घोर्णध की िधरीख/Date Of Pronouncement 24.09.2025

For Appellant: Shri. Vipul J. Shah-AdvFor Respondent: Shri Krishna Kumar SR DR
Section 115ASection 144C(5)Section 44BSection 9(1)(vi)

Income Tax Act provides that income will be deemed to accrue or arise in India if it is received from any source or business connection or property in India. The AO has established a territorial nexus between the income and Indian operations. Income attributable to economic activities undertaken in India

ITO, Ward- 44(2), New Delhi vs. Threepence Craft, New Delhi

ITA 5995/DEL/2019[2011-12]Status: DisposedITAT Delhi24 Sept 2025AY 2011-12

Bench: Shri Challa Nagendra Prasad & Shri M Balaganesh

Section 143(3)Section 195(2)Section 263

Impex General Trading LLC, Dubai which is a partnership firm in Dubai with two partners. Assessee also explained that they do not have any business connection in India. The assessee allowed 12% on the order received from the buyer which is in the nature of trade discount given ... Impex General Trading LLC, Dubai. The kuyer is a partnership Firm, in Dubai. Both the partners are from Dusai. They don't have any Business connection in India. Also it is further submitted that there is no Man Commission agent appointed in India for interaction between the and the Buyer

Threepence Craft, New Delhi vs. ITO, Ward- 44(2), New Delhi

ITA 5410/DEL/2019[2011-12]Status: DisposedITAT Delhi24 Sept 2025AY 2011-12

Bench: Shri Challa Nagendra Prasad & Shri M Balaganesh

Section 143(3)Section 195(2)Section 263Section 40

Impex General Trading LLC, Dubai which is a partnership firm in Dubai with two partners. Assessee also explained that they do not have any business connection in India. The assessee allowed 12% on the order received from the buyer which is in the nature of trade discount given

Threepence Craft, New Delhi vs. CIT- IX, New Delhi

ITA 2234/DEL/2015[2011-12]Status: DisposedITAT Delhi24 Sept 2025AY 2011-12

Bench: Shri Challa Nagendra Prasad & Shri M Balaganesh

Section 143(3)Section 195(2)Section 263

Impex General Trading LLC, Dubai which is a partnership firm in Dubai with two partners. Assessee also explained that they do not have any business connection in India. The assessee allowed 12% on the order received from the buyer which is in the nature of trade discount given ... General Trading LLC, Dubai. The Buyer is a partnership Firm, registered in Dubai. Both the partners are from Dubai. They don't have any business connection in India. Also it is further submitted that there is no commission agent appointed in India for interaction between the Assessee and the Buyer

Cochin International Airport Limited, Cochin vs. DCIT Corporate Circle 1(1), Cochin

In the result, all the appeals filed by the assessee are allowed

ITA 724/COCH/2023[2009-10]Status: DisposedITAT Cochin23 Sept 2025AY 2009-10

Bench: Shri Inturi Rama Rao & Shri Soundararajan K.

For Appellant: Shri Gopi K, CAFor Respondent: Shri Omanakuttan, Snr. AR
Section 195Section 201Section 9(1)(i)Section 9(1)(vii)

against the payments made to the said two entities on the ground that the said non residents have business connection in India. The assessee’s appeal was also dismissed by the Ld.CIT(A). Thereafter the assessee filed an appeal before the Tribunal and the Tribunal also vide its order dated ... 12/01/2016 in ITA Nos. 311 to 315/Coch/2014 had held that the non-residents are not having any business connection in India. The Tribunal also questioned the finding of the Ld.CIT(A) that the two entities have PE in India as per the DTAA. The Tribunal also considered the arguments that

Cochin International Airport Limited, Cochin vs. DCIT Corporate Circle 1(1), Cochin

In the result, all the appeals filed by the assessee are allowed

ITA 723/COCH/2023[2008-09]Status: DisposedITAT Cochin23 Sept 2025AY 2008-09

Bench: Shri Inturi Rama Rao & Shri Soundararajan K.

For Appellant: Shri Gopi K, CAFor Respondent: Shri Omanakuttan, Snr. AR
Section 195Section 201Section 9(1)(i)Section 9(1)(vii)

against the payments made to the said two entities on the ground that the said non residents have business connection in India. The assessee’s appeal was also dismissed by the Ld.CIT(A). Thereafter the assessee filed an appeal before the Tribunal and the Tribunal also vide its order dated ... 12/01/2016 in ITA Nos. 311 to 315/Coch/2014 had held that the non-residents are not having any business connection in India. The Tribunal also questioned the finding of the Ld.CIT(A) that the two entities have PE in India as per the DTAA. The Tribunal also considered the arguments that

Cochin International Airport Limited, Cochin vs. DCIT Corporate Circle 1(1), Cochin

ITA 722/COCH/2023[2007-08]Status: DisposedITAT Cochin23 Sept 2025AY 2007-08

Bench: Shri Inturi Rama Rao & Shri Soundararajan K.

For Appellant: Shri Gopi K, САFor Respondent: Shri Omanakuttan, Snr. AR
Section 195Section 201Section 9(1)(i)Section 9(1)(vii)

against the payments made to the said two entities on the ground that the said non residents have business connection in India. The assessee's appeal was also dismissed by the Ld.CIT(A). Thereafter the assessee filed an appeal before the Tribunal and the Tribunal also vide its order dated ... 12/01/2016 in ITA Nos. 311 to 315/Coch/2014 had held that the non-residents are not having any business connection in India. The Tribunal also questioned the finding of the Ld.CIT(A) that the two entities have PE in India as per the DTAA. The Tribunal also considered the arguments that

Cochin International Airport Limited, Cochin vs. DCIT Corporate Circle 1(1), Cochin

In the result, all the appeals filed by the assessee are allowed

ITA 721/COCH/2023[2006-07]Status: DisposedITAT Cochin23 Sept 2025AY 2006-07

Bench: Shri Inturi Rama Rao & Shri Soundararajan K.

For Appellant: Shri Gopi K, CAFor Respondent: Shri Omanakuttan, Snr. AR
Section 195Section 201Section 9(1)(i)Section 9(1)(vii)

against the payments made to the said two entities on the ground that the said non residents have business connection in India. The assessee’s appeal was also dismissed by the Ld.CIT(A). Thereafter the assessee filed an appeal before the Tribunal and the Tribunal also vide its order dated ... 12/01/2016 in ITA Nos. 311 to 315/Coch/2014 had held that the non-residents are not having any business connection in India. The Tribunal also questioned the finding of the Ld.CIT(A) that the two entities have PE in India as per the DTAA. The Tribunal also considered the arguments that

Cochin International Airport Limited, Cochin vs. DCIT Corporate Circle 1(1), Cochin

ITA 720/COCH/2023[2005-06]Status: DisposedITAT Cochin23 Sept 2025AY 2005-06

Bench: Shri Inturi Rama Rao & Shri Soundararajan K.

For Appellant: Shri Gopi K, CAFor Respondent: Shri Omanakuttan, Snr. AR
Section 195Section 201Section 9(1)(i)Section 9(1)(vii)

against the payments made to the said two entities on the ground that the said non residents have business connection in India. The assessee's appeal was also dismissed by the Ld.CIT(A). Thereafter the assessee filed an appeal before the Tribunal and the Tribunal also vide its order dated ... 12/01/2016 in ITA Nos. 311 to 315/Coch/2014 had held that the non-residents are not having any business connection in India. The Tribunal also questioned the finding of the Ld.CIT(A) that the two entities have PE in India as per the DTAA. The Tribunal also considered the arguments that

Isat Africa Limited Fzc, United Arab Emirates vs. Deputy Commissioner of Income Tax, Mumbai

In the result, the final assessment order passed by AO is set aside and the appeal of the assessee is accordingly allowed in above terms

ITA 832/MUM/2024[2018-19]Status: DisposedITAT Mumbai22 Sept 2025AY 2018-19

Bench: Ms. Padmavathy S & Shri Raj Kumar Chauhanisat Africa Limited Fzc Vs. The Deputy Commissioner Office No. 5 Pre-Fab, C Phase Ii, Of Income Tax Fujairah Free Zone Fujairah, Dubai, International Tax Circle- United Arab Emirates, Dubai - 2(2)(2) 999999 Mumbai, Maharashtra. Pan – Aagci8661Q (Appellant) (Respondent)

Section 143(3)Section 144C(5)Section 148Section 148ASection 195Section 201Section 9(1)Section 9(1)(vi)

classified as Fees for Technical services or Royalty either under Act or India-Singapore DTAA and further, in absence of Singapore AE's business connection or a PE in India, the business profits would not be taxable in India. This view taken by the Ld. CIT(A) was upheld

Income Tax Officer, Mumbai vs. Haresh Kumar Manjibhai Patel, Gujarat

In the result, the appeal of the Revenue fails and is dismissed in its entirety

ITA 3633/MUM/2024[2018-19]Status: DisposedITAT Mumbai11 Sept 2025AY 2018-19

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 10(38)Section 144Section 147Section 68Section 69C

Question No.39 of the same statement also omitted the assessee altogether. 12.2. The learned Counsel emphasised that the assessee had no personal or business connection with Shri Dipan Patel, 13 ITA No.3633/Mum/2024 & CO No.147/Mum/2025 Hareshkumar Manjibhai Patel and had never dealt with him. Other statements of third parties such

Rotomag Motors & Controls (P) Ltd., Anand vs. The Dy.CIT, Anand Circle, Anand

Appeal is allowed

ITA 796/AHD/2025[2014-15]Status: DisposedITAT Ahmedabad09 Sept 2025AY 2014-15

Bench: S/Shri T.R. Senthil Kumar & Makarand V.Mahadeokar

For Appellant: Shri Tushar Hemani, Sr.Advocate, &For Respondent: Shri Abhijit, Sr.DR
Section 143(3)Section 14ASection 195Section 271(1)(c)Section 36(1)(va)Section 37(1)Section 40

Before the AO, the assessee contended that the commission was paid for services rendered outside India, that the foreign agents had no business connection or permanent establishment in India, and that under the Double Tax Avoidance Agreement, the commission was not taxable in India. The AO rejected the plea ... that the assessee had not furnished satisfactory evidence to establish that the services were rendered wholly outside India or that the recipients had no business connection in India. The plea regarding DTAA was also rejected for want of proper documentation. 6.1.3 Before us, the learned AR reiterated that the commission

Gemological Institute of America, Inc., United States vs. The Assistant Commissioner of Income-Ta (International Taxation) - Circle 2(3)(2), Mumbai

In the result, appeals of the assesse are allowed partly for statistical

ITA 1293/MUM/2025[2022-23]Status: DisposedITAT Mumbai09 Sept 2025AY 2022-23

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Anikesh Banerjee, Hon'Ble

For Appellant: Shri J.D. Mistry, Sr. Adv. & Shri Niraj Sheth, A/RsFor Respondent: Shri Satya Pal Kumar, CIT D/R a/w Shri Krishna Kumar, Sr. D/R
Section 144C(13)Section 147Section 148

Officer/the Dispute Resolution Panel's stand that the Appellant has a PE in India be struck down. Re.; Holding that the Appellant ha* a business connection In India: The Assessing Officer / the Dispute Resolution Panel have erred in holding that the Appellant has a 'business connection' in India. The Appellant ... submits that considering the facts and circumstances of its case and the law prevailing on the subject, It has no business connection in India and the stand taken by the Assessing Officer/the Dispute Resolution Panel In this regard is erroneous, misconceived and not In accordance with law. The Appellant submits

Gemological Institute of America, Inc., United States vs. The Assistant Commissioner of Income-Tax (International Taxation), Circle 2(3)(2) - Mumbai, Mumbai

In the result, appeals of the assesse are allowed partly for statistical

ITA 1292/MUM/2025[2019-20]Status: DisposedITAT Mumbai09 Sept 2025AY 2019-20

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Anikesh Banerjee, Hon'Ble

For Appellant: Shri J.D. Mistry, Sr. Adv. & Shri Niraj Sheth, A/RsFor Respondent: Shri Satya Pal Kumar, CIT D/R a/w Shri Krishna Kumar, Sr. D/R
Section 147Section 148

Officer/the Dispute Resolution Panel's stand that the Appellant has a PE in India be struck down. Re.; Holding that the Appellant ha* a business connection In India: The Assessing Officer / the Dispute Resolution Panel have erred in holding that the Appellant has a 'business connection' in India. The Appellant ... submits that considering the facts and circumstances of its case and the law prevailing on the subject, It has no business connection in India and the stand taken by the Assessing Officer/the Dispute Resolution Panel In this regard is erroneous, misconceived and not In accordance with law. The Appellant submits