Business connection in India defines taxable income for non-residents; tax limited to profits attributable to Indian operations. Section 9 deems income accruing or arising through or from any business connection in India to be income accruing in India, bringing non-resident income into the Indian tax net to the extent such profit can reasonably be attributed to operations in India. The existence of a business connection is fact-specific; examples include branches, agents, factories, local subsidiaries and close financial associations. Where transactions are genuinely on a principal-to-principal basis at arm's length and the resident or subsidiary acts on its own account, profits of the non-resident are not attributable to India. If sales are channelled through an Indian agent, assessment is limited to profit attributable to the agent's services after allowable expenses.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Business connection in India defines taxable income for non-residents; tax limited to profits attributable to Indian operations.
Section 9 deems income accruing or arising through or from any business connection in India to be income accruing in India, bringing non-resident income into the Indian tax net to the extent such profit can reasonably be attributed to operations in India. The existence of a business connection is fact-specific; examples include branches, agents, factories, local subsidiaries and close financial associations. Where transactions are genuinely on a principal-to-principal basis at arm's length and the resident or subsidiary acts on its own account, profits of the non-resident are not attributable to India. If sales are channelled through an Indian agent, assessment is limited to profit attributable to the agent's services after allowable expenses.
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