TaxTMI 
TaxTMI 
2015 (2) TMI 1353
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....r has earned in law and on facts incoming to the conclusion that assessee has a 'business connection' in India u/s 9(1)(i) in the form of subsidiary UPS, SCS (India) Pvt. Ltd ('USIPL'), and therefore, profits are attributable to India. In Ground No. 2, the assessee has challenged the merits of the attribution of taxable income to the so called 'business connection' in India; In Ground No. 3 the assessee has challenged the disallowance u.s 40(a)(ia) of Rs. 16,29,50,324/- being payment made to USIPL, due to alleged information with holding of tax u/s 194C; Besides this, the assessee has also raised additional ground for challenging the AO's action for adopting net global profitability percentage for calculating the income attributable to t....
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....ndia Pvt. Ltd. (USIPL) an Indian Company for providing freight and logistics services to each others. Under the said agreement, the UPS Asia, i.e. assessee, performs freight and logistic services outside India and has appointed USIPL to perform freight and logistic services within India for customers in respect of import and export of consignment. The compensation as per the agreement for the local services rendered by USIPL was at cost plus 5.5%. Similar compensation was agreed for services rendered by the assessee outside India where the transportation fee is payable by USIPL. The agreement provides that relationship between the assessee and USIPL shall be that of independent contractor and no party has any authority to bind or enter into....
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....009-10, the same is clarificatory in nature and should apply for A Y 2009-10 as well. 8.13 In view of the above, it is clear that the assessee has a business connection in India and therefore is liable to tax in respect: f income accruing under the transportation agreement with USIPL." 6. The Tribunal in assessee's own case vide order dated 22.02.2012 in ITA No. 2426/Mum/2010, after considering the entire facts of the case, held that, there is no business connection in India under the deeming provision of section 9(1)(i). The relevant observation and the conclusion of the Tribunal is as under:- "18. Section 4 provides that the income tax shall be charged on the total income of any assessee of the previous year for any assessment year a....
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....-resident earns any income from India by means of operations carried on outside India, that will not fall within the scope of section 9(1))(i). Even Explanation below section 9(2) as, relied on by the Ld. DR, requiring inclusion of income in the total income of the non- resident whether or not the non-resident has a residence or place of business or business-connection in India or the non-resident has rendered services in India, is applicable only in respect of clauses (v) to (vii). Clause (i) of section 9 has not been included by the legislature within the ambit of this Explanation. It shows that unless a non-resident earns income from business operations earned out in India, such income cannot be deemed assuring or arising in India. Rever....