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2020 (12) TMI 543 - AT - Income TaxTDS u/s. 195 V/S 172 - Demand u/s 201(1) along with interest u/s. 201(1A) - assessee has made reimbursement of demurrage charges to Wilmar Trading Pvt. Ltd. ultimate beneficiary of such demurrage charges - HELD THAT:- ITAT Ahmedabad in the case of Steelco Gujarat Ltd. [2017 (1) TMI 1573 - ITAT AHMEDABAD] has held that as long as ship in respect of which freight payments are made is owned or chartered by non-resident or entity which is where provision of section 172 are applicable, provision of section 195 or 194C cannot be invoked. We consider that provision of section 195 are not applicable to the reimbursement of demurrage charges paid to the non-resident shipping company on behalf of the assessee by Wilmar Trading Pvt. Ltd. Further, it is clearly clarified by the CBDT vide circular no. 723 dated 19th Sep., 1995 that as long as the ship in respect of which freight payment is made is owned or chartered by non-resident the provision of section 172 are applicable and the provision of section 195 or 194C cannot be involved. We are not inclined with the decision of the ld. CIT(A) as provision of section 195 of withholding of tax on freight payment to non-resident shipping companies is not applicable as the same are covered by section 172 of the ACT. Therefore, the appeal of the assessee is allowed.
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