Section 9(1)(i) of the Income Tax Act

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.

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.

Payments to a non-resident agent for services rendered outside India, where the agent has no permanent establishment (PE) or business connection in India, are not chargeable to tax in India. Consequently, there is no obligation to deduct tax at source under Section 195, and no disallowance under Section 40(a)(i) can be made.

A 'business connection' for a non-resident requires continuity of activity or operations and a real, intimate relation between the non-resident's business outside India and its activities in India, rather than merely isolated or stray transactions.

If the income attributable to a Permanent Establishment (PE) in India is less than the remuneration paid to a dependent agent, the assessment is extinguished and no further computation of income is required.

Payments for advice on management, financial, or legal services, offered on a factual basis without transferring technical know-how, are not taxable in India as fees for technical services.

Payments for market surveys conducted for the purpose of procuring orders on a commission basis are not fees for technical services under section 9(1)(vii) of the Income Tax Act, 1961, as they are incidental to the business activity and do not involve the 'make available' clause.

The Special Bench decision in ACIT vs. Clough Engineering Ltd. interprets treaty provisions and the expression 'in connection with PE' for taxability. It is not applicable when income is offered under domestic provisions and not disputed.

Income accrues at the place where title to goods passes to the buyer upon payment of the price. For offshore supply of equipment, if the transaction is completed outside India, no income accrues to the assessee in India.