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2020 (6) TMI 137 - AT - Income TaxTDS u/s 195 - Default for making the above payments to NRI without deducting tax at Source - Whether the activity carried out by BIPL falls under the definition of “business connection” provided in explanation 2 to Section 9(1) of the Act which deals with the “Income accrued and derived in India” ? - HELD THAT:- BIPL leaves no confusion that BIPL being subsidiary/group company of Buhler AG, Switzerland is having regular business activity in India and apart from the trading business it also regularly providing marketing services to Buhler AG, Switzerland. The activities carried out by B/s BIPL for Buhler AG, Switzerland squarely falls in activity (a), (b) & (c). Since “Business connection” of Buhler AG, Switzerland in India and “M/s BIPL, Bangalore” is established beyond doubt, the income portion in the transaction between the Buhler AG, Switzerland and the assessee is subject to tax and the same has been rightly carried out by Ld. A.O. Since the non resident supplier Buhler AG, Switzerland has carried out the transaction of sale of goods to the assessee company through its subsidiary/group company BIPL, Bangalore “business connection” is established and therefore Section 9 of the Act dealing with “Income deemed to accrue or arise in India” comes into operation and thus the transaction needs to pass through Section 195 - Decided against assessee.
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