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2023 (5) TMI 157 - AT - Income TaxTDS u/s 195 - Payment chargeable to tax in India or not DTAA with USA - Payment made to non-residents u/s 40(a)(i) - DRP held that the services provided by the non-residents were received and utilised by the assessee in connection with its business operations in India - AR submitted that the payment made to the non-residents in lieu of the services rendered by them is not chargeable to tax in India and therefore, no TDS was deducted u/s 195 - HELD THAT:- We are of the considered opinion that for disallowance u/s 40(a)(i) of the Act the AO has to establish that the sums remitted outside India come within the purview of interest, Royalty, Fees for Technical Services or other sums chargeable under this Act, which exercise in the present case has not been undertaken by the any of the lower authorities. We find that in GE India Technology Centre Private Ltd [2010 (9) TMI 7 - SUPREME COURT] remitted the case to the Hon’ble High Court for de novo consideration on merits and fresh adjudication on the issue of whether the amount paid give rise to any income taxable in India. Thus, in view of the aforesaid findings, we deem it appropriate to remand the matter to the file of the AO to decide whether the payment made by the assessee to the aforesaid non-resident entities is taxable in India. It is only thereafter the issue of deduction of tax at source under section 195 of the Act and disallowance under section 40(a)(i) of the Act arises. Decided in favour of assessee for statistical purposes. Short grant of credit of TDS - This issue is restored to the file of the AO with the direction to grant TDS credit, in accordance with the law, after conducting the necessary verification
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