whole of the profits of a non-resident, accruing or arising from a business connection in India is not deemed to accrue or arise in India, and it is only that portion of the profits which can reasonably be attributed to the operations of business carried out in India, which is liable to income-tax.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....eptember 27, 1975 Section(s) Referred: 9 Statute: Income - Tax Act, 1961 In para 3(7) of Boards Circular No. 23* of 1969 dated 23rd July 1969, it was explained that the whole of the profits of a non-resident, accruing or arising from a business connection in India is not deemed to accrue or arise in India, and it is only that portion of the profits which can reasonably be attributed to the ope....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the plant; and (c) training in India and abroad the Indian personnel to replace the foreign technical personnel as rapidly as possible. The salary and other emoluments of the foreign technical personnel were to be paid by the Indian Company under separate agreements entered into between such personnel and the Indian Company. Under the agreement, the foreign company was to receive from the In....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....vices in India which amounts to business activity, the entire technical fee received by it should be taken to have accrued through or from its business connection in India and, therefore taxable, and there is no question of any apportionment as the foreign company did not carry on any business. 5. The judgment of the High Court has laid down two principles:- (i) In so for as making available of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rty. (ii) The assessee having rendered at least some services in India which amounts to a business activity the technical fee should be taken to have accrued through or from its business connection in India. Hence the entire receipts by the assessee company have to be taken to have accrued or arisen in India, as a result of its business connection, No question therefore, arises of any apportionme....