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TMI Blogwhole 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 X X X X Extracts X X X X ..... DT Dated : September 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnel necessary for operation 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 com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny having rendered at last some services 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:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een the non-resident and the Indian Party. (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 questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 9(1)(i) of the Income-tax Act and to tax all receipts. 6. Accordingly, the existing departmental practice of taxing the non-resident only on that portion of the profits which can reasonably be attributed to the operations carried out in India may continue to be followed, until revised instructions in this regard are issued by the Board. In determining the income reasonably attributable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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