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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 s. 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 s. 195 of the Act.

Shanti Prime Publication Pvt. Ltd.

Sec. 5(2), 9(1) of Income-tax Act, 1961 - TDS - Once business connection is established in India for any non-resident, it has to pay taxes in India for profits or gains secured from business in India. In order to safeguard India's right to tax said income provisions of withholding tax have been placed so that buyer itself withholds tax and pay it to the IT Department. The contention that if the material would have been bought from Indian entity would not attract TDS under s. 195, as the Indian entities file their return of income in India is otiose. The appeal of the appellant/assessee dismissed.—SANGHVI FOODS (P) LTD. vs. ITO.[2020] 26 ITCD Online 008 (ITAT-INDORE)