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2018 (6) TMI 401 - AT - Income TaxPE in India - contracts in dispute as “effectively connected" to the PE - Income accrued in India - Held that:- The details of the personnel and their duration activity shows that the contracts are required to be rendered for substantially long period of time which supports the case of the assessee that the scope of work was required to be rendered in India and the time spent in India by the assessee/subcontractor proves that a Permanent Establishment (PE) was constituted in India. Therefore, the CIT(A) rightly held that income earned by the assessee under such contracts is effectively connected to a PE in India and is liable to tax at 40% on net income basis as per the RBI guidlines Interest levied u/s 234B - liable to pay advance tax under the provisions of section 208 - Held that:- Interest u/s 234B is not leviable as all payments to the non-resident appellant are subject to tax deduction at source u/s 195. The AO is directed to delete the interest levied u/s 234B. Decision in the case of DIT v. GE Packaged Power Inc. (2015 (1) TMI 1168 - DELHI HIGH COURT), is squarely applicable in the present case wherein held that no interest under section 234B of the Act can be levied on the assessee-payee on the ground of non-payment of advance tax because the obligation was upon the payer to deduct the tax at source before making remittances to them. Revenue appeal dismissed.
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