TaxTMI 
TaxTMI 
2021 (4) TMI 182
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.... to the Income Tax Act by Finance Act 2010 to Section 9(1)? 3)Whether the amended explanation to 9(2) relating to the income of the non-resident shall be deemed to accrue or arise in India and shall be included in the total income of the non-resident whether or not he has a resident or place of business or business connection in India or has done services in India? 4)Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the deduction under Section 80-IA is to be done without setting off losses on optional basis inspite of clear provisions of Section 80-IA stipulating that the said undertaking should be considered as only source of income of the assessee for the purpose of determining eligible profit?" 3.When the appeal is taken up for hearing, Mr.M. Swaminathan, learned senior standing counsel appearing for the appellant - Revenue fairly submitted that the questions of law nos.1 to 3 are covered, against the Revenue, by a decision of the Hon'ble Division Bench of this Court reported in [2015] 57 taxmann.com 87 (Madras) [Commissioner of Income Tax, Chennai Vs. Fluidtherm Technology (P). Ltd.], ....
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.... payable to a person referred to in article 314 of the Constitution or to a person who, having been appointed before the 15th day of August, 1947, to be a Judge of the Federal Court or of a High Court within the meaning of the Government of India Act, 1935, continues to serve on or after the commencement of the Constitution as a Judge in India. Explanation.For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of subsection (1) and shall be included in the total income of the non-resident, whether or not, - (i) the non-resident has a residence or place of business or business connection in India ; or (ii) the non-resident has rendered services in India." 7. On a reading of section 9(1)(vii) of the Act, we are not inclined to accept the plea taken by the learned senior standing counsel appearing for the Revenue that commission paid by the assessee to the non-resident agent would come under the term "fees for technical services". In the case on hand, for procuring orders for leather business from over....
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....sees and the statutory agent. This contention overlooks the effect of clause (a) of the Explanation to clause (i) of sub-section (1) of section 9 of the Act which provides that in the case of a business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. If all such operations are carried out in India, the entire income accruing therefrom shall be deemed to have accrued in India. If, however, all the operations are not carried out in the taxable territories, the profits and gains of business deemed to accrue in India through and from business connection in India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. If no operations of business are carried out in the taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India (see CIT v. R. D. Aggarwal and Co. [ 1965] 56 ITR 20( S C) and Carborandum Co....
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.... squarely applicable to the facts of the present case. 9. In the result, this Court finds no reason to interfere with the order passed by the Tribunal. No question of law, much less substantial question of law arises for consideration in this appeal. Accordingly, the order passed by the Tribunal is confirmed and this appeal is dismissed. No costs." 4.Further, the learned senior standing counsel appearing for the appellant - Revenue submitted that the 4th question of law is covered by a decision of the Hon'ble Division Bench of this Court, against the Revenue, in the judgment reported in [2020] 114 taxmann.com 642 (Madras) [Commissioner of Income Tax, Salem VS. Chola Spinning Mills (P.) Ltd.] wherein the Hon'ble Division Bench held as follows: "... 3. The Division Bench of this court in Prabhu Spinning Mills (P.) Ltd. (supra) held as under:- "3. Even according to the learned Standing Counsel for the Department, this Court has consistently followed the decision in M/s.Velayudhaswamy Spinning Mills (P) Ltd. v. Asstt. CIT [2012] 21 taxmann.com 95/340 ITR 477, despite the Honourable Supreme Court ordering notice. 4.Interestingly, o....
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....ent/operation etc. itself as the first year for granting deduction, ignoring the clear mandate provided under Sub-Section (2) which allows a choice to the assessee for deciding the year from which it desires to claim deduction out of the applicable slab of fifteen (or twenty) years. The matter has been examined by the Board. It is abundantly clear from Sub-Section (2) that an assessee who is eligible to claim deduction u/s 80IA has the option to choose the initial/first year from which it may desire the claim of deduction for ten consecutive years, out of a slab of fifteen (or twenty) years, as prescribed under that Sub-Section. It is hereby clarified that once such initial assessment year has been opted for by the assessee, he shall be entitled to claim deduction u/s 80IA for ten consecutive years beginning from the year in respect of which he has exercised such option subject to the fulfillment of conditions prescribed in the section. Hence, the term 'initial assessment year' would mean the first year opted for by the assessee for claiming deduction u/s 801A. However, the total number of years for claiming deduction should not transgress the prescribed slab of fi....