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2017 (4) TMI 356 - AT - Income TaxTax withholding liability - liability to deduct tax at source u/s 196C r.w.s. 115AC on the interest payable on FCCBs - Held that:- As decided in assessee's own case for previous AY interest paid by assessee to non-resident investor is specifically excluded from the deeming provisions as per S.9(l)(v)(b), and therefore, such interest payment cannot be covered in definition of income deemed to accrue or arise in India. It was thus held that since the income in question is falling within the ambit of this exclusion clause of income deemed to accrue or arise in India as per S.9(l)(v)(b), it cannot fall within the ambit of income accrued and arisen in India, and hence, same cannot be said to be covered u/s 5(2) of the Act. Therefore, there was no occasion to deduct tax at source on such remittance. Respectfully following the decision of the co- ordinate bench of the Tribunal in the case of the Adani (2013 (1) TMI 518 - ITAT AHMEDABAD),which is identical both in terms of the facts and laws relied upon by the Assessing Officer, we hold that since income in question is squarely falling under the exclusion clause of income deemed to accrue or arise in India u/s 9(l)(v)(b) of the Act, it cannot fall within the ambit of income accrued and arisen in India, and hence, the same cannot be said to be covered u/s 5(2) of the Act. Since the recipient non-resident are not taxable on this income in India, there was no obligation to deduct tax at source on such remittance. Hence, assessee cannot be held liable u/s. 201(1)/(1A) of the Act. - Decided in favour of assessee
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