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2022 (7) TMI 1147 - ITAT DLEHITDS u/s 195 - Withholding the tax on payment made to the nonresident/ foreign entity who do not have ‘PE’ in India - HELD THAT:- It is trite to say that the liability to deduct tax under section 195 arises only, when the amount being paid is chargeable to tax under the Income Tax Act of India and if the person or supplier or manufacturer to whom payment made, is a tax resident of a foreign country or non-resident, having no ‘PE’ in India, then such entity can not be subjected to taxation in India and consequently payment made to it not liable to deduct any TDS under Section 195 of the Income Tax Act 1961. In this case M/s. GSI Engine B.V. from whom the Assessee had taken ‘Aircraft Engine’ on a lease rent basis, admittedly is a tax resident of Netherland, having no ‘PE’ in India and consequently cannot besubjected to taxation in India and thuspayment made to M/s GSI Engine B.V. does not attract the provisions of Act for withholding the tax, hence we are inclined to sustain the impugned order passed by the Ld. Commissioner, as the same does not suffers from any perversity, impropriety and/or illegality. Consequently, the appeal of the Revenue Department is dismissed.
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