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2022 (1) TMI 46 - CALCUTTA HIGH COURTTDS u/s 195 - disallowance u/s 40(a)(i) on account of professional and consultancy charges to non residents - HELD THAT:- As in the case of CIT vs. NGC Network (India) Pvt. Ltd. [2018 (5) TMI 1148 - BOMBAY HIGH COURT] and CIT vs. Western Coalfields Ltd.[2010 (10) TMI 1126 - BOMBAY HIGH COURT] the High Court of Bombay held that the “person” mentioned in Section 195 of the Act cannot be expected to do the impossible, namely, to apply the expanded definition of “royalty” inserted by Explanation 4 to Section 9(1)(vi) of the Act for the assessment years in question, at a time when such Explanation was not actually and factually in the statute. Therefore, question no.2 stands rejected. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Tribunal considered the correctness of the same and held that the assessing officer neither examined the assessee’s account nor recorded satisfaction about the correctness of the claim and that it is incumbent upon the assessing officer to indicate reasons for rejecting the assessee’s claim. An alternate contention was also raised before the Tribunal contending that investment made for acquiring controlling interest in their Group concerns and not for income. In support of such contention, the assessee placed reliance on DCIT vs. Selvel Advertising [2015 (5) TMI 682 - ITAT KOLKATA]. Before we examine as to whether the alternate contention was required to be considered, we are satisfied that the Tribunal rightly followed the earlier decision of the Tribunal and the disallowance was deleted. That apart, we note that identical issue was raised before this Court in the case of Commissioner of Income Tax vs. REI Agro [2013 (12) TMI 1517 - CALCUTTA HIGH COURT], which was dismissed by judgment dated 23rd December, 2013. Thus, we find that the question no.5 has to be decided against the revenue and in favour of the assessee. TDS u/s 194J - HELD THAT:- Tribunal rightly held the amendment to Section 194J was with effect from 1st July, 2012 and the assessment year under consideration being 2008- 09, the same cannot be made applicable. Furthermore, the observations contained in Engineering Analysis Centre of Excellence P. Ltd. [2021 (3) TMI 138 - SUPREME COURT] would also come in aid of the case of the assessee. Therefore, question no.7 stands rejected. Disallowance u/s 40(a)(i) paid as commission to non residents - Tribunal holding that commissions paid to the foreign agents outside India does not accrue or arise in India had become final.
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