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2010 (2) TMI 696 - AT - Income TaxAssessee in default - International transaction - TDS u/s 195 - Reimbursement of actual expenditure - It has been held that section 195 of the Act also covers composite payments which have an element of income embedded or incorporated in them - The fact that the Revenue has not obtained any information per se cannot be a ground to construe section 195 widely so as to require deduction of TAS even in a case where an amount paid is not chargeable to tax in India at all - It is in this sense that we hold that the Income-tax Act constitutes one single integral inseparable code. Hence, the provisions relating to TDS applies only to those sums which are chargeable to tax under the Income-tax Act - When the payer remits an amount to a non-resident out of India he claims deduction or allowances under the Income-tax Act for the said sum as an "expenditure - Even in cases of composite payments, the Courts have held that the obligation to deduct the tax is in respect of the element of income embedded or incorporated in them - Appeal is allowed by way of remand
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