Tax U/s. 195 not deductible on consideration for live broadcasting

In the case of CIT Vs. R.D.Agarwal & Co. & Anr. [(1965) 56 ITR 20 (SC)] the Hon’ble Supreme Court has held that the expression “business connection” undoubtedly mean some thing more than “business”. A business connection has been held to be involving a relation between the business carried on by a non­resident yielding profits or gains and some activity in the taxable territories which provides directly or indirectly to the earning of those profits or gains. A stray or isolated transaction has been held to be not constituting a business connection. In this case the assessee procured orders in taxable territories for non-resident for which he was not duly authorized and contracted for the sale of goods. The orders were accepted by the non-resident. Price was received and delivery was given outside India. No operation such as procuring of material or manufacture of finished goods took place within India. The Honourable Supreme Court held that there was no business connection of the non-resident.