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TMI Blog1978 (4) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... mption contained in the proviso to section 163(1) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that profits and gains could be deemed to have accrued or arisen to the non-residents by reason of business connection in India within the meaning of section 9(1)(i) of the Income-tax Act, 1961? 3. Whether, on the facts and in the circumstances of the case, and on a consideration of the terms of the contract, the Tribunal was justified in holding that the assessee-company was rightly treated by the Income-tax Officer as the agent of the non-resident under section 163(1) of the Income-tax Act, 1961 ? " The statement of the case relates to the assessment years 1968- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. In this behalf, the case of CIT v. R. D. Aggarwal & Co. [1965] 56 ITR 20 (SC) was cited. In view of the terms of the said contract under which the assessee-company had acted, the ITO held that there was a business connection between the assessee-company and M/s. Invest Export and from the said business connection the income arose or accrued to the non-resident, M/s. Invest Export. He, accordingly, attributed that part of the business income which accrued in India and was reasonably attributable to the said operation carried out in India and passed an order under s. 163(1) of the Act treating the assessee-company as the agent of the said non-resident. The appeals filed by the assessee were dismissed by the AAC. Further appeals we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit those territories at regular intervals for increasing the sale of the products of M/s. Invest Export and also shall acquaint itself with the solvency of the customers. Under art. 5 the assessee-company undertook to assist M/s. Invest Export and its customers in every respect in their dealings with the authorities of the agency districts and in obtaining necessary licences. Clause 3 of art. 6 authorised the assessee-company to appoint sub-agents in the said territories. Clause 4 of art.10 provides that it shall be the duty of the assessee-company to submit to M/s. Invest Export information, proposals and plans for the advertising measures to be taken by the assessee-company in the agency districts for a period of one year. Under cl. 6 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of continuity between the business of the non-resident and the activity in the taxable territories ; a stray or isolated transaction is normally not to be regarded as a business connection. Business connection may take several forms; it may include carrying on a part of the main business or activity incidental to the main business of the non-resident through an agent, or it may merely be a relation between the business of the non-resident and the activity in the taxable territories, which facilitates or assists the carrying on of that business. In each case the question whether there is business connection from or through which income, profits or gains arise or accrue to a non-resident must be determined upon the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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