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2015 (8) TMI 987 - KARNATAKA HIGH COURTLiability for deduction of TDS u/s 195 r/w S.197 - assessee did not have a permanent establishing in India as per S.9 r/w its explanation - Held that:- Revenue itself had given No Objection Certificates consistently for several years and allowed the respondent assessee to make payment to Sheraton without deducting tax at source and it was only after the decision of the Assessing Officer at Delhi in the case of Sheraton [2009 (1) TMI 27 - DELHI HIGH COURT] holding that payment made to it would be liable for payment of income tax in India, the proceedings in question had been initiated against the respondent assessee herein. However, once the said order of the Assessing Officer itself has been set aside by the Delhi High Court, the very foundation of initiating proceedings against the respondent asses see disappears and once the foundation goes, the structure cannot remain, i.e., proceedings against the respondent assessee cannot go on. Tribunal was correct in holding that the income earned by M/s Sheraton International, USA in India was not liable for deduction of TDS u/s 195 r/w S.197 of the Act, in respect of payments made by the assessee as they did not have a permanent establishing in India as per S.9 r/w its explanation and consequently provisions of Ss.201(1) and 201(1A) of the Act was not attracted - Decided in favour of assessee.
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