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2018 (5) TMI 418 - AT - Income TaxTDS u/s 195 - professional fee paid - DTLL AUS rendered professional services outside India - income accrued in India - PE In India - India-Australia DTAA - Held that:- The professional fees paid by the assessee to DTLL AUS was not taxable in India, that the FAA and the AO were not justified in invoking the provisions of 40(a)(i)of the Act. - Decided in favour of the assessee. Difference between information gathered from Annual Information Return(AIR)and the professional receipts as per the books of account - Held that:- Major amount under the head professional fee received is from Encorn Win Farms (India) Ltd. , that the payer had, in response to section 13(6)notice, admitted that it had not paid any amount to the assessee, that it also ascertained that no professional services were availed from the assessee. We find that the FAA had brushed aside such an important piece of evidence only on the ground that the figure was appearing in the AIR. Mistakes in the information in AIR is not uncommon. In these circumstances and after considering the Pg-53 of the PB, we are of the opinion that we are of the opinion the FAA was not the justified in confirming the addition - Decided in favour of the assessee. Assessee was not liable to deduct tax at source for the payment made to the Netherland entity and that provisions of section 40(a)(ia)of the Act were not applicable. Payment made by the assessee to Sri Lankan entity - Held that:- We find that before signing of the DTAA of 2014 there was no provisions in the Indo-Sri Lankan DTAA for charging FTS. The non-resident entity had no PE in India and professional fees was to taxed as per Article 14 of the treaty. Considering the facts of the matter, we hold that the FAA was not justified in upholding the order of the AO with regard to the payments made to Sri Lankan entity. - Decided in favour of the assessee. Addition on account of payment to retired partners - diversion of income by an overriding title - Held that:- FAA had taken note of the relevant clauses of the partnership deed, that he followed the judgments delivered in the case of C C Choksi (2008 (7) TMI 1055 - BOMBAY HIGH COURT), that in that matter the Hon’ble Court had, in the identical situation, held that the payment made to ex-partners or to the spouses of the deceased partners was not application of money, that the FAA had following the judgments had held that it was a case of diversion of income by an overriding title - the order of the FAA does not suffer from any legal or factual infirmity. - Decided against revenue
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