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2014 (4) TMI 68 - AT - Income TaxDefault for non-deduction of TDS - additions u/s 40(a)(i) - Indo-UK DTAA - Deemed income u/s 9(1)vi)/(vii) – Assessee in Default u/s 201 for Non-Deduction of tax at Source - assessee did not deduct tax with regard to two phases on the ground that the technical designs and drawings which were prepared in London were to be transported to India - Held that:- in case of Ishikawajima-Harima Heavy Industries v. DIT(IT) [2007 (1) TMI 91 - SUPREME COURT] stated that that if entire services rendered by foreign company to assessee in respect of phase one and two outside India, then same cannot become chargeable to tax in hands of foreign company in India - Unless amount paid by assessee company to foreign company does not become chargeable to tax in India then question of applicability of section 195 does not arise - No liability of assessee to deduct tax at source on payment made by it with respect to work relating to phase one and two - Amount in question paid by assessee to SSA was not taxable in India in hands of SSA either u/s.9(l)(vi) or 9(1)(vii) - Assessee therefore was not liable to deduct tax at source from said amount paid to M/s. SSA and there was no question of disallowing amount by invoking provisions of sec.40(a)(i) - Delete disallowance made by AO u/s.40(a)(i) and confirmed by Ld. CIT (A) - Assessee was not liable for deduction of tax under section 195 of Act – Decided in favor of assessee.
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