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2011 (12) TMI 339 - HC - Income TaxDTAA between India and USA - Disallowance - Deduction u/s 80HHE - In respect of the same assessee arising in ITA.No.3232/2005 and by order dated 4.11.2011 has been answered against the assessee and in favour of the revenue Regarding deduction u/s 40(a)(i) - The material on record would clearly show that the question about non-deduction under Section 195 of the Act in respect of the payments made in a sum of Rs. 17,35,363/-to Powersolve Corporation USA was raised by the first appellate authority and a show cause notice was also issued to the assessee - the material on record would clearly show that the said payment of Rs. 17,35,363/- paid to the Powersolve Corporation USA was for the services rendered abroad to their office in USA, which is a permanent establishment in DTAA and hence there is no liability to tax in India and even as per the DTAA tax was paid in USA and no amount out of the said payment was chargeable to tax in India and wherefore, the question of applying Explanation relied upon by the learned Counsel appearing for the appellant would not arise - Decided in favor of the assessee
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