Report No. 12
C-Representative assessee-special cases.
173. Who may be regarded as agent.-
(1) For the purposes of this Act, "agent", in relation to a non-resident, includes any person in India-
[Section 43 main para.]
(a) who is employed by or on behalf of the non-resident, or
(b) who has any business connection with the non-resident, or
[Section 41(1) 1st, proviso, main para.]
(c) through whom the non-resident is in receipt of any income, or
(d) who is the trustee of the non-resident.
Provided that a broker in India who in respect of any transactions, does not deal directly with or on behalf of a non-resident principal but deals with or through a non-resident broker shall not be deemed to be an agent under this section in respect of such transactions, if the following conditions are fulfilled, namely:-
(a) the transactions are carried on in the ordinary course of business through the first-mentioned broker; and
(b) the non-resident broker is carrying on such transactions in the ordinary course of his business and not as a principal.
[Section 43, 1st, proviso]
Explanation.-A person, whether a resident or a non-resident, who acquires whether by sale, exchange transfer or relinquishment, a capital asset in India from a non-resident shall, for the purposes of charging to tax the capital gain arising from such sale, exchange, transfer or relinquishment, be deemed to have a business connection, within the meaning of this section, with such non-resident.
[section 43, Expin.]
(2) No person shall be treated as the agent of a non-resident unless he has had an opportunity of being heard by the Income-tax Officer as to his liability to be treated as such.
[Section 43, 2nd proviso]