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2019 (7) TMI 1590 - AT - Income TaxAddition u/s 14A r.w.r. 8D - no investment has been made during the year under investment and only dividend has been earned on the reinvestment of dividend earned in the earlier years - HELD THAT:- There is not an iota of evidence on record to work out if the assessee has incurred any direct or indirect expenses in earning the dividend. When dividend has been undisputedly earned on the basis of earlier investment made in the earlier years in which the assessee has given standing instructions to reinvest the dividend earned, no expenses directly or indirectly can be attributed to have been incurred by the assessee. No doubt, at the time of making initial investment, assessee must have incurred expenses but when it is undisputed fact that no investment has been made during the year under investment and only dividend has been earned on the reinvestment of dividend earned in the earlier years and there was no intervention of human labour and mind, section 14A is not attracted - AO without bringing on record any evidence as to how and under what circumstances the expenses have been incurred in the given circumstances applied Rule 8D mechanically which is not sustainable in the eyes of law. The ld. CIT (A) has also erred in confirming the addition made u/s 14A - So, disallowance made u/s 14A is ordered to be deleted. - Decided in favour of assessee TDS u/s 195 - assessee has made foreign remittance to AMR Research Inc. without deducting the tax- HELD THAT:- Undisputedly, assessee has not deducted the tax at source by relying upon the decision rendered by the Tribunal in case of M/s. Wipro Ltd. vs. ITO [2004 (12) TMI 304 - ITAT BANGALORE-B] - It is also not in dispute that the aforesaid case of M/s. Wipro Ltd. decided by the Tribunal has been overruled by Hon’ble Karnataka High Court [2010 (8) TMI 1053 - KARNATAKA HIGH COURT]wherein it is held that any payment made by the assessee to a non-resident in order to obtain licence to use the database maintained by it is to be treated as royalty. When the case of Wipro Ltd. is undisputedly applicable to the facts and circumstances of the case as contended by the ld. AR for the assessee, there cannot be a second view that the assessee was required to deduct the tax at source while making the payment to AMR Research Inc. So, AO has rightly disallowed the amount u/s 40(a)(ia) of the Act and is required to be added to the income of the assessee. - Decided against assessee.
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