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2014 (4) TMI 81 - HC - Income TaxStay of recovery of demand - Tribunal has granted partial relief staying 50% of tax liabilaity as determined by AO - Total demand is Rs. 2,57,57,53,136/ - Taxability of payments made - DTAAs with the NTOs for interconnectivity capacity transfer agreements - Failure to deduct income u/s 5(2) of the Act – Held that:- The source of payment is in India - for services rendered by the NTOs abroad, and towards such services utilized, petitioner has made payments - Section 5(2) of the Act referred to deals with the source from which income is derived - The word Source' means the place from which something is obtained – The decision in Sheth Shiv Prasad .v. C.I.T. [1971 (3) TMI 16 - ALLAHABAD High Court] followed - in section 2(11) the definition of "previous year" envisages a different previous year in respect of each separate source of income - Sec.4, which concerned with the application of the Act, declares that the total income of the person includes all profits and gains, from whatever source derived, which falls within the categories set out there. The source of income will be from the payer - Payer is the person from whom income is received and earned - income originates from the payer and such payer becomes the source of income - the payer is in India and payment undoubtedly is made to NTOs who have received payments abroad for and towards provision of EIG capacity and IUC from the payer in India - payments become income' of the NTO arising in India which reaches the hands of the NTO - the term ‘Accrue' or ‘arise' have to be understood in the context in which it is used - payments made to NTOs is payment Accruing' or Arising' in India – assessee has made payments towards services availed by it even though there may be no territorial nexus between the facilities and infrastructure available in the hands of India - Assessee has not been able to make out prima facie case to opine that assessment of tax liability as determined by the assessing officer vide Annexure-A is wholly untenable or illegal - payments made by the assessee qualify as having been paid by the ‘payer' and the payment made to NTOs/Belgacom is the amount ‘received' and fall within the definition of income' under Section 5(2) of the Act. It must be observed that granting interim orders which practically give the principal relief sought in the petition for no better reason than that a prima facie case has been made out, without being concerned about the balance of convenience, the public interest and a host of other relevant considerations is unwarranted. Even if we give a margin to the petitioner's contention to hold that petitioner may have a prima facie case against the impugned orders Annexures 'A' and 'B', yet, there is no circumstances or material placed before me to show that petitioner will suffer irreparable hardship and injuries to his favour nor any other circumstances made out to show balance of convenience is in his favour. - Assessee to make pre-deposit as per tribunal order - Decided against Assessee.
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