Commission received by foreign company for assistance in arranging cargo transportation was taxable in India on account of ‘business connection’

Recently, ITAT Mumbai (the Tribunal) in case of ACIT Vs. ACM Shipping India Ltd (2011) ITA No. 5085/MUM/2009 held that the commission received by the UK company for assisting the taxpayer in arranging cargo transportation was taxable as business income by virtue of their business connection in India. The Tribunal observed that reliance cannot be placed on Circular No. 23 dated 23 July 1969 since it has been withdrawn. The circular was issued in the context of sale of goods and may not apply to the current case since it relates to rendering of services. Facts 1. The taxpayer is a wholly-owned ...