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2015 (8) TMI 1029 - AT - Income TaxNon-deduction of TDS for payment of product designing charges outside India for services rendered outside India - Held that:- The services rendered by the non-resident agent can at best be called as a service for completion of the export commitment and would not fall within the definition of “fees for technical services”, we are the firm view that Section 9 of the Act is not applicable to the case on hand and consequently, Section 195 of the Act does not come into play. In view of the above finding, the decision of the Supreme Court in Transmission Corporation of A.P. Ltd. case, [1999 (8) TMI 2 - SUPREME Court ] relied upon by the learned Standing Counsel for the Revenue is not applicable to the facts of the present case. - Decided in favour of assessee. Non-deduction of TDS towards payment of rent to the partners of the firm - Held that:- Section 194-I of the Act provides that tax has to be deducted at source on payment of rent by an assessee who is not an individual or a HUF at the specified rate. In this case, the assessee is a firm assessable under the provisions of the Act and therefore bound to deduct tax at source on payment of rent to its partners who are individuals and distinct assessable entities as held by the Ld. Assessing Officer. It is pertinent to mention that the provisions of “TDS” represent an alternative and more efficient tax collection mechanism for the Government. Neither provisions of TDS is a separate charge nor levy in addition to income tax under the Act. Non-compliance of the provisions of TDS will result in disallowance u/s 40(a)(ia) of the Act, rising of demand U/s.201(1) of the Act, charging of interest U/s.201(1A) of the Act and levy of penalty U/s.271C of the Act. There is no provision under the Act to suggest that the relationship between the two assessable entities will determine the applicability of Section.194-I of the Act. Therefore, we hereby set aside the order of the Ld. CIT (A) and confirm the order of AO on this issue. - Decided in favour of revenue.
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