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2019 (9) TMI 1332 - HC - Income TaxTDS u/s 195 - disallowance u/s. 40(a)(ia) for non deduction of tax on commission payable to foreign agents - HELD THAT:- Commissioner (Appeals) as well as the Tribunal have placed reliance upon the decision of the Supreme Court in the case of GE India Technology Centre P. Ltd. v. Commissioner of Income-Tax and Another [2010 (9) TMI 7 - SUPREME COURT] wherein it has been held that a person paying interest or any other sum to a nonresident is not liable to deduct tax if such sums are not chargeable to tax under the Act. Section 195 contemplates not merely amounts, the whole of which are pure income payments; it also covers composite payments which has an element of income embedded or incorporated in that. The obligation to deduct tax at source is, however, limited to appropriate proportion of income chargeable under the Act forming part of gross sum of money payable to the non-residents. Tribunal has merely applied the decision of the Supreme Court to the facts of the present case. Under the circumstances, the proposed question does not give rise to any question of law. Disallowance u/s 14A - HELD THAT:- As in the case of Commissioner of Income-Tax v. Corrtech Energy P. Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT] wherein the court has held that notice under sub-section (1) of section 14A provides that for the purpose of computing the total income under Chapter IV of the Act, no deduction shall be allowed in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. The court recorded that in the facts of the said case, the Tribunal has recorded a finding of fact that the assessee did not make any claim for exemption of any income from payment of tax and it was on that basis that the Tribunal held that the disallowance under section 14A of the Act could not be made. The court agreed with the view adopted by the Tribunal and did not find any question of law. It is an admitted position that the assessee had not made any claim for exemption of any income from payment of tax. Tribunal has merely applied the decision rendered by the jurisdictional High Court to the facts of the present case which does not give rise to any question, much less, a substantial question of law, warranting interference. - Decided against revenue.
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