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2016 (3) TMI 89 - AT - Income TaxTDS u/s 195 - Disallowance being professional fees incurred by US branch of the assessee - non-deduction of tax at sources - disallowance u/s 40a(i) - INDO US DTAA - Held that:- In this case, the services have been utilized outside India by business carried on by the US branch of the assessee, which is assessed also under US Tax laws. Therefore no income deemed to accrue or arise in the hands of the recipient of such sum. Hence there is no requirement of tax deduction at source on the same as per Indian tax Laws. Further CIT (A) has also considered various provisions of INDO US DTAA. According to article 7 of DTAA if the recipient are earning business income and there is no permanent establishments of such recipients in India, such income shall not be chargeable to tax in India. Therefore, according to DTAA also the income shall not be subject to tax in India. Hence, there is no withholding tax liability on assessee as per Income tax Act 1961 as well as per DTAA. Ld. DR could not point out any infirmity in the order of CIT (A) where in CIT (A) has dealt elaborately various provision of the Income tax act and DTAA for holding that there is no withholding tax liability on assessee with respect to payment by US branch of the assessee - Decided in favour of assessee
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