TMI Blog2005 (7) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... as income earned in India, i.e., for services rendered in India under section 9(1)(ii). We would like to point out that in this case the assessment records show that from the income of the Indian operations the salary in its entirety (including salary for the off period) has been paid by the employer company. This conduct shows the intention of the contracting parties. Hence, the entire salary for both the periods was taxable in India under section 9(1)(ii) – Thus, we answer this question in the negative, i.e., in favour of the Department and against the assessee. - - - - - Dated:- 14-7-2005 - Judge(s) : P. C. VERMA., P. C. PANT. JUDGMENT This is an appeal preferred under section 260A of the Income-tax Act, 1961, filed by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed to accrue to him during such year. Section 9(1)(ii), inter alia, lays down that income which falls under the head "Salaries", if it is earned in India, shall be deemed to accrue to the non-resident during such year. Therefore, section 9 is a deeming section. It brings in certain types of incomes, which may not come under section 5, into the definition of "total income" under section 2(45). Section 9(1)(ii) read with the Explanation provides for an artificial place of accrual for income taxable under the head "Salaries". It enacts that income chargeable under the head "Salaries" is deemed to accrue in India if it is earned in India, i.e., if the services under the contract for employment are rendered in India. In such a case, the plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rest period. Hence, he had to undergo demonstrations and training but all that has a nexus with the services which he had to render in India. Hence, the payment which he received was for his services in India. In this connection it may be noted that the Explanation to section 9(1)(ii) introduced by the Finance Act of 1983 refers to what constitutes "income earned in India". This Explanation was introduced by the Finance Act of 1983 with effect from April 1,1979, to get over the judgment of the Gujarat High Court in CIT v. S.G. Pgnatale [1980] 124 ITR 391 in which it was held that in order to attract section 9(1)(ii) of the Act, liability to pay must arise in India. By the said Explanation, the original intention under section 9(1)(ii) has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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