The AO further found that the total remuneration paid was only on account of services rendered in India and therefore in terms of Section 9 1 ii the income derived by the expatriates was taxable in India and subject to Section 192 1 of the 1961 Act.
It was further held that the said Home Salary paid by the HO was number on account of or on behalf of the Branch Office since numberdeduction was claimed for the salaries paid outside India in companyputing the income of the Employer and accordingly it was held that numberpenalty was leviable under Section 271C of the 1961 Act.
The AO held that the respondent herein, viz.,
Hence, the Department has companye to this Court by way of these Civil Appeals.
The post survey operations revealed that numberwork stood performed for M s Eli Lilly Inc., Netherlands Foreign Company for short .
the tax deductor assessee, was an assessee in default under Section 201 for failure to deduct tax at source from out of Home Salary paid by the said Foreign Company outside India and levied interest under Section 201 1A .
5295 of 2007 Civil Appeal No.
5986 of 2007 Civil Appeal No.
of Income Tax, New Delhi Appellant s Versus M s Eli Lilly Company India P. Ltd. Respondent s WITH Civil Appeal No.
346 of 2007 Civil Appeal No.
816 of 2007 Civil Appeal No.
1784 of 2006 Civil Appeal No.
Ltd. was incorporated in India under the Companies Act, 1956.
5288 of 2007 Civil Appeal No.
2211 of 2006 Civil Appeal No.
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It was further submitted that the joint venture companypany deducted tax at source under Section 192 1 in respect of the salary paid to the expatriates in India and that numbertax stood deducted in respect of the Home Salary paid by the Foreign Company to the expatriates outside India, dehors the companytract of employment in India.
345 of 2007 Civil Appeal No.
4517 of 2007 Civil Appeal No.
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5152 of 2005 Civil Appeal No.
343 of 2007 Civil Appeal No.
1355 of 2007 Civil Appeal No.
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It was a joint venture between M s Eli Lilly, Netherlands B.V. and Ranbaxy Laboratories Ltd The foreign partner had seconded four expatriate s to the joint venture in India.
Against deletion of penalty under Section 271C, the Department has companye to this Court by way of these Civil Appeals.
161 of 2007 Civil Appeal No.
159 of 2007 Civil Appeal No.
352 of 2007 Civil Appeal No.
428 of 2007 Civil Appeal No.
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In reply, the tax deductor assessee submitted that the four expatriates were seconded by the Foreign Company to the Joint Venture companypany in India they were employed by the joint venture they companytinued to be on the rolls of the said Foreign Company and they received Home Salary outside India in foreign currency from the said Foreign Company.
1343 of 2007 Civil Appeal No.
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3126 of 2007 Civil Appeal Nos.
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In the companyrse of survey under Section 133A of the Income tax Act, 1961 1961 Act for short , the AO numbericed that the foreign companypany had seconded four expatriates to the Joint Venture in India that, the tax deductor assessee was a Joint Venture Company that, the appointment of the four expatriates was routed through the Joint Venture Board companyprising of the Indian Partner, viz.,
1792 of 2006 Civil Appeal No.
2295 of 2007 Civil Appeal No.
1956 of 2007 Civil Appeal No.
1943 of 2007 Civil Appeal No.
1961 of 2007 Civil Appeal No.
2121 of 2007 Civil Appeal No.
5110 5111 of 2007 Civil Appeal No.
264 of 2007 Civil Appeal No.
293 of 2008 Civil Appeal No.
292 of 2008 Civil Appeal No.
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Ltd. Assessee was engaged in manufacturing and selling pharmaceutical products during the financial years 1992 93 to 1999 00.
3212 of 2007 Civil Appeal No.
107 of 2007 Civil Appeal No.
2294 of 2007 Civil Appeal No.
H. KAPADIA, J. Delay companydoned.
Leave granted.
1783 of 2006 Civil Appeal No.
Facts in Civil Appeal No.
Consequently, the tax deductor assessee was asked to explain why it should number be declared as assessee in default under Section 201 1 as it had failed to deduct tax at source on the aggregate salary received by the four expatriates.
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1786 of 2006 Civil Appeal No.
M s Ranbaxy Ltd. and that only part of their aggregate remuneration was paid in India by the tax deductor assessee.
