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2017 (11) TMI 501 - AT - Income TaxDisallowance u/s 40(a)(i) - non deduction of tds on payments made to Medunet Europe B.V for technical services towards copyright and printable file - Held that:- CIT(A) in his order has noted that though assessee has deducted TDS on payments under the title “Fees for Technical Services” with description “copyright and printable PDF file” in the case of other like payments, but tax has not been deducted on the sum of ₹ 50,553/- paid to Medunet Europe B.V for similarly described nature of payment. Even before us, there is no rebuttal of the aforesaid position, and in the absence of any credible explanation, we affirm the orders of the authorities below and thus, so far as invoking of Sec. 40(a)(i) of the Act with respect to payment made to Medunet Europe B.V of ₹ 50,553/- is concerned, the action of the income-tax authorities is sustained, and assessee fails. TDS on payment paid to M/s. Pfizer Corporation Hongkong Ltd. - claim of the assessee has been that the payments in question are merely reimbursement of expenses - Held that:- In terms of the invoices, the amount relatable to the Indian entity is quantified at USD 948, which has been invoiced by M/s. Pfizer Corporation Hongkong Ltd. to the assessee-company. Similar is the situation with other invoices and, in our view, the assertions being made by the assessee are borne out of record. Thus, where the payments are merely towards reimbursement of expenses incurred by M/s. Pfizer Corporation Hongkong Ltd. on behalf of the assessee, there is justifiably no reason to deduct tax at source. Thus having regard to the objection of the CIT(A) that there was non-substantiation of the payments to M/s. Pfizer Corporation Hongkong Ltd. being reimbursements, a plea which we have not found tenable on the basis of the material on record, we direct that the disallowance made u/s 40(a)(i) of the Act be set-aside. TDS on scholarship fee paid to Doctor - absence of requisite deduction of tax at source - plea of the assessee that the said amount is not taxable in India so as to require tax deduction at source because of Article 7 of DTAA in the absence of any Permanent Establishment of the recipient in India - Held that:- We have perused the order of the CIT(A) and find that though the CIT(A) has tabulated in the list of payments the amount of scholarship fee paid for Dr. Avinash Pophali of ₹ 1,90,315/-, but there is no adjudication on the same. Therefore, we restore the matter back to the file of the CIT(A) who shall examine the disallowance made by the Assessing Officer of the said scholarship fee u/s 40(a)(i) of the Act. TDS u/s 194C - Disallowance of cross charges by invoking Sec. 40(a)(ia) - Contractual relationship between the assessee-company and M/s. Pfizer Ltd. - Held that:- There was no default on the part of the assessee in not deducting tax at source on the impugned payments to M/s. Pfizer Ltd. In this view of the matter, we, therefore, find no reasons to interfere with the ultimate conclusion of the CIT(A) in setting-aside the disallowance made by the Assessing Officer by invoking Sec. 40(a)(ia) of the Act. See COMMISSIONER OF INCOME-TAX Versus SIEMENS AKTIONGESELLSCHAFT [2008 (11) TMI 74 - BOMBAY HIGH COURT]
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