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2014 (3) TMI 106 - AT - Income TaxWithholding TDS u/s 195 of the Act - Gross sale consideration paid to foreign nationals – Assessee in default u/s 201(1) of the Act - Held that:- The reason for fastening the obligation to deduct tax at source of the payment to non-resident is only in a situation where such payment was chargeable to tax in India was that it was not the intention of law to fasten an absolute liability on the remitter to deduct tax at source from the payments of nonresident, then, subjected to the non-resident to the rigour process of filing of return and seeking refund and assessments on the basis of such return where remitter was of the opinion that some part of the income may be chargeable to tax in India - The remitter can approach the ITO to demand proper portion of the income that would be chargeable to tax in India and how on which tax was to be deducted at source - when the payment to be made to the non-resident, which chargeable to tax in the hands of the resident recipient TDS to be deducted. Relying upon GE India Technology Centre P. Ltd. Vs. CIT and Anr., [2010 (9) TMI 7 - SUPREME COURT OF INDIA ] a person paying any sum to the non-resident is liable to deduct tax u/s 195 only if such sum is chargeable to tax in India and not otherwise - the Assessing Officer observed that assessee not deducted the TDS as required u/s 195 and, therefore, he treated the assessee as ‘the assessee in default’ - lower authorities did not go into the merits of the case on a question of chargeability of income tax –thus, the order is set aside and the matter remitted back for fresh consideration to determine the income chargeable to tax – Decided in favour of Assessee.
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