Indian Income-Tax Act, 1922

43. Agent to include persons treated as such.—Any person employed by or on behalf of a person residing out of [the taxable territories], or having any business connection with such person, or through whom such person is in the receipt of any income, profits or gains upon whom the Income-tax Officer has caused a notice to be served of his intention of treating him as the agent of the non-resident person shall, for all the purposes of this Act, be deemed to be such agent:

[Provided that where transactions are carried on in the ordinary course of business through a broker in [the taxable territories] in such circumstances that the broker does not in respect of such transactions deal directly with or on behalf of a non-resident principal but deals with or through a non-resident broker who is carrying on such transactions in the ordinary course of his business and not as a principal such first-mentioned broker shall not be deemed to be an agent under this section in respect of such transactions:]

Provided [further] that no person shall be deemed to be the agent of a nonresident person, unless he has had an opportunity of being heard by the Income-tax Officer as to his liability.

[Explanation.—A. person, whether residing in or out of [the taxable territories], who acquires, after the 28th day of February, 1947, whether by sale, exchange or transfer, a capital asset in [the taxable territories] from a person residing out of [the taxable territories] shall, for the purposes of charging to tax the capital gain arising from such sale, exchange or transfer, be deemed to have a business connection, within the meaning of this section, with such person residing out of [the taxable territories].]