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2012 (3) TMI 104 - AT - Income TaxDTAA between India and UK - appellant had made a request u/s. 195 for non deduction of tax from the payment made to ARL - The request was rejected by the DCIT, TDS Circle-1(1), vide his order u/s. 195 dt. 1.12.1998 - Ld. Counsel for the appellant on the other hand, submitted that as far as the case of ARL is concerned, this Tribunal has already taken a view that the receipts in question are not chargeable to tax - It was his submission that since proceedings for assessment of income of the non-resident have been initiated, it was not open to the revenue to initiate proceedings under section 163 of the Act against the appellant - Held that: an agent or any person who apprehends that he may be assessed as such an agent can retain out of the money payable to the non-resident a sum equal to the estimated liability. A mere relation between the business of the non-resident and the activity in India which facilitates or assists the carrying on of the business of the non-resident would result in a business connection - the provisions of Sec. 166 of the Act provides that the provisions for treating person in India as agent of the non-resident does not prevent either the direct assessment of the person on whose behalf or for whose benefit income therein referred to is receivable, or the recovery from such person of the tax payable in respect of such income - Held that: CIT(A)fell into an error in accepting the plea of the appellant and canceling the order under section 163 of the Act - Appeals are allowed
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