The Central Board of Direct Taxes (CBDT) had earlier issued a circular (Circular No. 23 dated July 23, 1969) clarifying the India tax liability of non-residents in respect of income accruing or arising through or from, a business connection in India. As per the aforesaid Circular 23, even if a business connection existed under section 9 of the Income-tax Act, 1961 (“the Act”), only so much of the profit which can be reasonably attributed to the operations of the busi..
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