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2017 (11) TMI 1968 - AT - Income TaxTDS u/s 195 - Disallowance u/s. 40(a)(i) - non deduction of tax at source on the following payments to Opportunity International, USA (OI) a non-resident non-profit organization - assessee is in second appeal - HELD THAT:- Payments is in respect of services utilized in India and in the nature of FTS. The collateral support is, as explained during hearing, either by way of undertaking or provision of security, enforceable in India, to enable the assessee, a micro finance company, to borrow funds from banks and financial institutions for the purpose of its business. OI Membership is again to enable the assessee to secure the membership of an entity, representing a framework of organizations, i.e., to secure its membership and, thus, the various services and benefits for the conduct of its business in India under its aegis. MIS Emerge fee is again for reporting systems (for micro finance organization and finding solutions), perhaps to be followed as a member. These are clearly in the nature of managerial and technical services falling within the purview of FTS covered u/s. 9(1)(vii). The decision in G.E India Technology Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT] is, in ratio, clearly applicable in the facts of the case, albeit in favour of tax deduction tax at source and, consequently, applicability of s. 40(a)(i), which stands thus rightly invoked. The same, it can be appreciated, does not provide for absolute disallowance, and the assessee could, by remitting the withholding tax, grossing it up, claim deduction for the year of payment. - Decided against assessee.
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