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‘FOX international’ not liable to pay tax on agency commission in absence of territorial nexus with India

March 1, 2019[2019] 103 taxmann.com 1 (Mumbai - Trib.)
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IT/ILT : As per Explanation 1 to section 9(1)(i) , in case of an assessee a tax resident of Hongkong whose business operations are not exclusively carried out in India, amount of income which will be deemed to accrue or arise in India shall be only such part of income as is reasonably attributable to operations carried out in India. Therefore, income which is deemed to accrue or arise in India must have a territorial nexus. It is well settled position of law that agency / marketing commission paid to non–residents agent outside India and for services rendered outside India is not taxable in India. Moreover, as per provision contained in Explanation below section 9(2), it will be very much clear that it will not be applicable to agency commission earned by assessee

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