NDLI: Commissioner of Income Tax, Calcutta Vs. T.i. & M. Sales Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Indian Income-tax Act, 1922 (11 of 1922) Income Tax Act, 1961 (43 of 1961)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Income Tax Act, 1961/Income Tax Act, 1922-Section 163(1)(b)/ Section 43-'Business Connection'-What amounts to-Dependent upon a set of facts in a particular case. The assessee-respondent was assessed to income tax as a representative assessee of ten non-resident companies. The companies were grouped under three heads-six in Group-A, three in Group-B and one in Group-C. In regard to the companies under Group-A, the assessee had no direct agreement but had dealings by virtue of its agreement with the exporting company; as regards the three companies under Group-B, the assessee had no business connection with them; and so far as the only company under Group-C was concerned, the assessee's stand was that it had an agreement dated December 16, 1948 with the export company, but no liability accrued under the law in respect of the transactions. The Income-tax Officer referred specifically to the agreement of 1948 and refuted the stand of the company. He held that the agreement was a clear authority that the non-resident had employed the Indian Company for selling its goods in India on commission and that it brings into existence a business connection between the two companies. He also held that the Group-A companies were connected with the Indian Company through the export company. Appeals were filed by the assessee challenging the assessments before the Appellate Assistant Commissioner. The assessee tried to establish the actual course of dealing between the Indian Company and the ten non-residents and contended that no liability under the Act accrued. The Appellate Authority dismissed the contentions of the assessee by holding that the assessee had produced no proof of its assertions and on the contrary had blocked the inquiry. Before the Tribunal, an appeal was filed by the assessee. Along with the grounds, an affidavit dated December 27, 1965 of the Secretary of the assessee was also filed and it was stated therein that there was no obstruction to the proceedings before the Appellate Assistant Commissioner with regard to the attempted probe by the Appellate Authority and that several documents were made available before the Appellate Authority and were actually placed before him, and in case the Appellate Authority wanted any information or further documents to be produced, the Secretary was prepared to do so. The Tribunal did not deal with the aforesaid affidavit on the ground that it was not necessary for the purpose of determining whether the Indian Company could be appointed agent under Section 163 of the Act. It upheld the assessments and referred to the High Court the questions whether the non-resident companies had business connection with the Indian Company and whether the Indian Company was correctly treated as an agent of the said non-resident companies under Section 163 of Income-tax Act, 1961. The High Court held that the Indian assessee had no business connections with the non-resident companies within the meaning of Section 9 of the Act.
Judge	Honble Mr. Justice Ranganath Misra
Neutral Citation	1987 INSC 101
Petitioner	Commissioner Of Income Tax, Calcutta
Respondent	T.i. & M. Sales Ltd.
SCR	[1987] 2 S.C.R. 883
Judgement Date	1987-04-10
Case Number	1449-1456

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