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2016 (8) TMI 1420 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - partners of the assessee-firm held more than 10% shares in both the companies as had received advances from the said companies and companies were having accumulated profits - provisions of section 2 (22)(e) were applicable in the case under consideration to the extent of committed profits retained by those companies - HELD THAT:- The assessee firm is not the share holder of the companies i.e. it is also a fact that in case of one of the companies the transactions were in the course of regular business-it was neither loan nor advance. As the assessee was not registered shareholder of the companies, so, the provisions of section 2(22)(e)were not applicable to it. SEE CIT v. Subrata Roy [2015 (3) TMI 767 - DELHI HIGH COURT]. - TDS u/s 195 - Addition u/s 40(a)(ia) - payments were made to non-resident entities - PE in India - HELD THAT:- We are aware that the section 195 of the Act deals with the deduction of tax at source by the payer, i.e., the assessee, if the payments are to be made to a non- resident. The obligation to deduct the tax at source arises only when the payment is chargeable under the provisions of the Act-i.e. taxable in India. Facts of the case are that the assessee had made payments to non-resident agents, that the agents did not have PE in India, that the services were rendered outside India. In our opinion, considering these facts the assessee had rightly not deducted tax at source for making the payments to the non-resident agents. Non-resident agent was only procuring orders for the assessee and following up payments and no other services were rendered, held that the non-resident agent did not provide any technical services to the assessee, that the commission payment made to the non-resident agent did not fall under the category of royalty or fees of technical services and, therefore, the Explanation to section 9(2) had no application to the facts of the assessee's case. The commission payments to the non-resident agents were not chargeable to tax in India and, therefore, the provisions of section 195 were not applicable.- Decided against revenue.
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