Tribunal held that the role of the Indian company could not be ignored at any stage. Since the beginning when the assessee looked for suppliers of spare parts, the Indian company was very much in the scene of the transaction of purchase. Since the non-resident supplier had carried out the transaction of sale of goods to the assessee through its subsidiary company the business connection was established and therefore section 9 (1)(i) came into operation and thus the transaction needed to satisfy the requirement of section 195. (AY. 2015-16, 2016-17)
Sanghvi Foods P. Ltd. v. ITO (IT.& TP) (2020) 82 ITR 362 / 193 DTR 318/206 TTJ 81 (Indore)(Trib.)
S. 195 : Deduction at source-Non-resident-Other sums-Income Deemed to accrue or arise in India Purchasing spare parts through Indian subsidiary-Business connection is established-Liable to deduct tax at source. [S. 9(1)(i)]