section 9

Taxation of Non-Residents – Income deemed to accrue or arise in India

Income Tax - in the case of Ishikawajima-Harima (Supra) in Para 2 above. We wonder whether the proposed amendment is sufficient to provide the territorial nexus enunciated in the aforesaid decision and override the said decision of the Supreme Court. This amendment could lead to litigation. Further, the amendment is not clear as regards its applicabil...

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Summary of Important Income tax provisions: Union Budget 2010-11

Income Tax - Finance Minister Pranab Mukherjee took the first step towards implementation of the Direct Taxes Code (DTC) on Friday. While retaining the basic exemption limits for all income levels (as in the DTC), he increased the other slabs. For instance, while the basic exemption limit for individuals has been retained at Rs 1.6 lakh, the 10 per ce...

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TDS on purchase of software from non-residents – An unguided missile

Income Tax - THE much-awaited order of the Karnataka High Court on the question of liability to deduct tax at source on payments made to non-residents for the purchase of software to be used in business is finally out. The order passed on 24th September, 2009 was made available only on 17th November, 2009....

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Withdrawal of circular related to taxability of income accruing or arising through, or from, business connection in India to a non-resident

Income Tax - The Central Board of Direct Taxes had issued Circular No. 23 (hereinafter called "the Circular") on 23rd July 1969 regarding taxability of income accruing or arising through, or from, business connection in India to a non-resident, under section 9 of the Income-tax Act, 1961. 2. It is noticed that interpretation of the Circular by some ...

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Where the income is actually received or has accrued in India, the resort to deeming provision is not warranted

Income Tax - MUSTAQ AHMED VS. DIT (AAR) Where the income is actually received or has accrued in India, the resort to deeming provision is not warranted and s. 5(2) is sufficient to create a charge in respect of non-resident’s income. Clause (b) to Explanation 1 makes no difference to this position. ...

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Articles 7 of the Indo-Australia DTAA vs. Section 44D on FTS – Delhi High Court Reverses Law

DIT Vs Rio Tinto Technical Services (Delhi High Court) - DIT Vs. Rio Tinto Technical Services (HC Delhi) - The payment in the present case is for furnishing of evaluation report. The fee paid is for the said purpose. To collect and collate the information and furnish evaluation report, the assessee was required and it was necessary to undertake certain t...

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Income deemed to accrue or arise in India

Velankani Mauritius Ltd. & Ors. v. Dy. DIT - Income deemed to accrue or arise in India-Under section 9(1)(vi)-Income from supply of software to clients in India-Where assessee was engaged in sale of copyright software then income from such sale cannot be treated as royalty under section 9(1)(vi) particularly where assessee did not have any PE ...

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Payment made by a member to its stock exchange for VSAT/Lease line/BOLT/Demat charges is not fee for technical services u/s194J

DCIT Vs. Angel Broking Ltd. (ITAT Mumbai 'A' Bench) - For the purposes of this clause, fees for technical services means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration ...

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TDS on payment made for purchase of software from non-residents

CIT (Intl. Taxation) Vs Samsung Electronics Co. Ltd. (Karnataka High Court) - The fact involved in the present case is that the assessee is a branch of Samsung Electronics Co Company Limited, Korea, engaged in the development, manufacture and export of software for use by its parent company, i.e., Samsung Electronics Co., Ltd., Korea. The assessee develops various kinds of so...

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If certain activities are not really services but more in the nature of stewardship/shareholder activities, the amounts cannot be taxed in India in the absence of a permanent establishment (PE)

Invensys Systems Inc. Re (Authority for Advance Rulings) - The applicant is a US-based manufacturer engaged in manufacturing of engineering goods and is also an R&D-based service provider. It entered a cost al ocation agreement with its India-based group company. The applicant raises invoices on the Indian group company for services rendered based on the ...

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Delhi VAT Rate increased from 4% TO 5%

No.F.14(16)/LA-2009/LJ/10/lclaw/1 - (06/01/2010) - In the principal Act, in Section 10, after sub-section (4), the following subsection shall be inserted, namely:- “(5) Where the goods which have been purchased by a dealer are sold at a price lower than the price at which it was purchased by the dealer, the tax credit on such purchases shall be re...

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Withdrawal of circular related to taxability of income accruing or arising through, or from, business connection in India to a non-resident

Circular No. 7/2009-Income Tax - (22/10/2009) - The Central Board of Direct Taxes had issued Circular No. 23 (hereinafter called "the Circular") on 23rd July 1969 regarding taxability of income accruing or arising through, or from, business connection in India to a non-resident, under section 9 of the Income-tax Act, 1961. 2. It is noticed that...

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MVAT – Electronic Filing of Audit Report in Form -704

Trade Circular No. 27 T of 2009 - (01/10/2009) - Any dealer who files Audit Report on or after 1st October 2009 for any period shall file the same in the new Form-704. Now, it is mandatory for all the dealers who are required to get their books of account audited as per the provisions of the section 61 of the MVAT Act, 2002 to file Audit Report in...

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Recent Posts in "section 9"

Articles 7 of the Indo-Australia DTAA vs. Section 44D on FTS – Delhi High Court Reverses Law

DIT Vs Rio Tinto Technical Services (Delhi High Court)

DIT Vs. Rio Tinto Technical Services (HC Delhi) - The payment in the present case is for furnishing of evaluation report. The fee paid is for the said purpose. To collect and collate the information and furnish evaluation report, the assessee was required and it was necessary to undertake certain tests, mapping and studies....

Read More

Income deemed to accrue or arise in India

Velankani Mauritius Ltd. & Ors. v. Dy. DIT

Income deemed to accrue or arise in India-Under section 9(1)(vi)-Income from supply of software to clients in India-Where assessee was engaged in sale of copyright software then income from such sale cannot be treated as royalty under section 9(1)(vi) particularly where assessee did not have any PE in India....

Read More

Taxation of Non-Residents – Income deemed to accrue or arise in India

in the case of Ishikawajima-Harima (Supra) in Para 2 above. We wonder whether the proposed amendment is sufficient to provide the territorial nexus enunciated in the aforesaid decision and override the said decision of the Supreme Court. This amendment could lead to litigation. Further, the amendment is not clear as regards its applicabil...

Read More

Summary of Important Income tax provisions: Union Budget 2010-11

Finance Minister Pranab Mukherjee took the first step towards implementation of the Direct Taxes Code (DTC) on Friday. While retaining the basic exemption limits for all income levels (as in the DTC), he increased the other slabs. For instance, while the basic exemption limit for individuals has been retained at Rs 1.6 lakh, the 10 per ce...

Read More

Payment made by a member to its stock exchange for VSAT/Lease line/BOLT/Demat charges is not fee for technical services u/s194J

DCIT Vs. Angel Broking Ltd. (ITAT Mumbai 'A' Bench)

For the purposes of this clause, fees for technical services means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly...

Read More

Delhi VAT Rate increased from 4% TO 5%

No.F.14(16)/LA-2009/LJ/10/lclaw/1 (06/01/2010)

In the principal Act, in Section 10, after sub-section (4), the following subsection shall be inserted, namely:- “(5) Where the goods which have been purchased by a dealer are sold at a price lower than the price at which it was purchased by the dealer, the tax credit on such purchases shall be reduced proportionately in the tax period ...

Read More

TDS on payment made for purchase of software from non-residents

CIT (Intl. Taxation) Vs Samsung Electronics Co. Ltd. (Karnataka High Court)

The fact involved in the present case is that the assessee is a branch of Samsung Electronics Co Company Limited, Korea, engaged in the development, manufacture and export of software for use by its parent company, i.e., Samsung Electronics Co., Ltd., Korea. The assessee develops various kinds of software for telecommunication system for ...

Read More

If certain activities are not really services but more in the nature of stewardship/shareholder activities, the amounts cannot be taxed in India in the absence of a permanent establishment (PE)

Invensys Systems Inc. Re (Authority for Advance Rulings)

The applicant is a US-based manufacturer engaged in manufacturing of engineering goods and is also an R&D-based service provider. It entered a cost al ocation agreement with its India-based group company. The applicant raises invoices on the Indian group company for services rendered based on the formula given in the agreement. The ques...

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Advance Ruling on taxability of an American company, having no PE in India, for technology transfer to an Indian company against consideration

International Tire Engineering Resources LLC, In re (Authority for Advance Rulings)

It cannot be doubted that the technology/know- how transfer that is contemplated by clause 2 of the `Technology Transfer Agreement' between the parties gets covered by more than one sub-clause of Explanation 2 to section 9(1)(vi) of the Income-tax Act, 1961 i.e., sub-clauses (i),(ii) and (iv); the services in the form of technical assista...

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TDS on purchase of software from non-residents – An unguided missile

THE much-awaited order of the Karnataka High Court on the question of liability to deduct tax at source on payments made to non-residents for the purchase of software to be used in business is finally out. The order passed on 24th September, 2009 was made available only on 17th November, 2009....

Read More
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