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2019 (1) TMI 1990 - ITAT DELHITDS u/s 195 - Disallowance of expenses u/s 40(a)(ia) - assessee claimed expenses on account of book charges under the head ‘administrative and other expenses’ - HELD THAT:- As section 195(1) uses expression "sum chargeable under the provisions of the Act", and section 195 uses the word 'payer' and not the word "assessee", ‘ Payer’ becomes assessee-in-default, only when he fails to fulfil statutory obligation under section 195(1). If payment does not contain any element of income, payer cannot be made liable. He cannot be declared to be an assessee-in-default. When a payer remits amount to a non-resident out of India, he claims deduction or allowances under the Act for as an "expenditure". From order passed by AO it is an admitted position that payment made by assessee represents its share of expenses incurred by the group companies on cost-to-cost basis. Ld. AO made addition only on the ground that assessee made certain payments to a non-resident without deducting TDS. Nowhere there is any material that has been brought on record by Ld.AO to establish that payments made to non-resident involved an element of income which is chargeable to tax in India. We do not find any infirmity in the order of CIT (A) and the same is upheld. Accordingly grounds raised by revenue stand dismissed.
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