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2014 (4) TMI 1009 - HC - Income TaxTDS u/s 194C / 195 - Additions u/s 40(a)(ia) - Whether payment made to the four several agents or any part of such payments were in fact made to the non-resident foreign carrier – Held that:- Each of the four agents are the agents of the foreign carriers - the airway bill contain the name of the issuing carrier's agents - The name of the agent appearing in the airway bill corresponds with the name of the agents to whom payments were actually made by the assessee - no elaborate reasoning is required to show that each of the four agents was acting for a disclosed principal - Any payment made to any such agent is on behalf of its principal - The agents was merely the collecting hand insofar as the airfreight is concerned - Payment made to such agents is in fact a payment made to the principal. Chargeability of payments made to Non-resident – Airfreight payment – Held that:- Relying upon GE India Technology Centre Private Ltd. Versus Commissioner of Income Tax & Anr. [2010 (9) TMI 7 - SUPREME COURT OF INDIA] - The payer is obliged to deduct tax at source only if tax upon such payment is assessable in the country - Section 195 specifically excludes the liability to deduct tax at source when payment is made to a foreign company which is not chargeable to tax in the country - The payments are as such not chargeable to tax - the assessee had no obligation to deduct any tax – Decided in favour of Assessee. Liability to deduct TDS u/s 194(C) of the Act – Held that:- The assessee was not liable to deduct any tax at source in so far as the payment of airfreight made to the foreign carrier was concerned - But the other payments were in fact made to the resident agent and to that extent tax was deductible - Payments made to the resident agent otherwise than on account of airfreight payable to his principal are open to deduction at source u/s 194(C) – thus, the order of the CIT(A)is set aside and the matter is remitted back to the AO – Decided partly in favour of Assessee.
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