Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (5) TMI 1236 - AT - Income TaxTDS u/s 195 - Disallowance u/s 40(a)(i) for non deduction of tax at source - Payment made to non residents - HELD THAT:- Fees for technical services paid by a resident in respect of services utilised in a business carried on by the resident outside India or for the purposes of earning any income from any source outside India, does not constitute an income liable to tax under the Act as it falls in the exception to clause (b) of section 9(i)(vii) of the Act. Further, there is no dispute to the fact that rent has also been paid by the assessee in respect of property which is situated in the said country abroad and as per Article 6 of the DTAA with respective country it is taxable in that country and not in India. Accordingly, there is no tax payable by the recipient in India for rent received in respect of property situated abroad. Hence, provisions of section 195 are also not applicable in respect thereof. Considering above facts and also in the light of decision of Hon'ble Apex Court in the case of GE India Technical Centre Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT], if payment is not made to a non-resident which is not taxable under the provisions of Income Tax Act, question of making deduction u/s. 195 of Act does not arise. Consequently, no disallowance u/s. 40(a)(i) of the Act could be made. In view of the above, we uphold the order of learned CIT(A) and reject ground No. 1 of the appeal taken by the Department.
|