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2020 (4) TMI 816 - AT - Income TaxHigher rate of depreciation on the UPS, printers and scanners @ 60% as relying on own case [2017 (8) TMI 167 - ITAT CHENNAI] TDS u/s 195 - addition u/s 40(a)(ia) - Payment to non residents for agency commission, professional consultancy charges, warehousing charges, emballage cost, tool development charges etc - HELD THAT:- As decided in own case [2017 (8) TMI 167 - ITAT CHENNAI]The logistics service rendered was essentially warehousing facility. In our opinion, this cannot be equated with managerial, technical or consultancy services. Even if it is considered as technical service, the fee was payable only for services utilized by the assessee in the business or profession carried on by the said non-residents outside India. Such business or profession of the non-residents, earned them income outside India. Thus, it would fall within the exception given under sub-clause (b) of Section 9(1) of the Act. In any case, under Section 195 of the Act, assessee is liable to deduct tax only where the payment made to non-residents is chargeable to tax under the provisions of the Act. In the circumstances mentioned above, assessee was justified in having a bonafide belief that the payments did not warrant application of Section 195 of the Act. In such circumstances, we are of the opinion that it could not have been saddled with the consequences mentioned under Section 40(a)(i) of the Act. Disallowances were rightly deleted by the ld. CIT(Appeals). Disallowance u/s 43B - delay in payment - Employees contribution to the ESI after 5 days from the due date specified - HELD THAT:- M/S. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD [2015 (7) TMI 1063 - MADRAS HIGH COURT] if the assessee had deposited employee's contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 43B as amended by Finance Act, 2003. Disallowance u/s 14A - As per assessee assessee had huge interest free funds in the form of capital, reserves, surplus etc and hence no interest disallowance could be made and for the purposes of quantifying the average value of investments , only those investments which yielded exempt income alone should be considered etc - HELD THAT:- We find that the assessee’s plea that it had huge interest free funds in the form of capital, reserves, surplus etc and hence no interest disallowances could be made in its case remain unexamined and hence we deem it fit to remit this issue back to the AO for a fresh examination. The assessee shall lay relevant material in support of its contentions and comply with the requirements of the A O in accordance with law. AO shall after affording effective opportunity to the assessee shall decide this issue in accordance with law. The assessee’s plea that for the purposes of quantifying the average value of investments, only those investments which yielded exempt income alone should be considered is in accordance with the decision of the special bench of the ITAT decision in the case of Vireet Investments P Ltd [2017 (6) TMI 1124 - ITAT DELHI] and hence we direct the AO to recompute the disallowance in accordance with that decision.
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