Non-Residents—Income Accruing or Arising through or from Business connection in India—Liability to Tax—Section 9 of the Income-tax Act, 1961

Business connection via purchasing agent: purchases in India solely for export are exempt from tax under the statutory exemption.

Where a non-resident's agency in India exists solely to purchase goods or raw materials for export, the mere existence of that agency does not create a taxable business connection; income or profits attributable to such purchase operations are excluded from being deemed to accrue or arise in India by the purchase-for-export exemption in the Explanation to the operative provision, and any apportionment of profits for taxation is subject to that exemption.