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2022 (10) TMI 487 - AT - Income TaxReopening of assessment u/s 147 - non deduction of TDS - certain payment on which TDS was required to be deducted but was not deducted by the assessee, having not being disallowed while computing the income of the assessee, and thus the income relating to the same escaping assessment - HELD THAT:- No hesitation in concurring with the finding of the ld.CIT(A) that reopening in the present case was not change of opinion at all. The challenge raised by assessee against the validity of the assessment framed under section 147 of the Act in the present case, therefore, has been rightly held to be not sustainable in law by the ld.CIT(A). The order of the ld.CIT(A), upholding the validity of the assessment framed under section 147 of the Act is upheld. Ground no.1 is dismissed. TDS u/s 195 - non-deduction of tax at source as per section 40(a)(ia) on expenses related to certification fees paid to Islamic Food and Nutrition Council of America (“IFANCA”), Chicago - making available technical knowledge to the assessee so as to be treated as “included services” as per Article 14(2) of the DTAA with USA for the purpose of holding taxes on the same - assessee contended thereafter that “IFANCA” was division of Islamic Food and Nutrition Council of America, and a non-profit Islamic Organization incorporated in 1982 in the State of Illinois, USA and remittance was on account of payment of Halal supervision and certificate fees in respect of export of Gelatine to USA and European countries - HELD THAT:- To make the assessee halal compliant the assessee is educated about the meaning and implication of the term, its products and process adopted for manufacturing are reviewed to see that they are halal compliant, sanitation and cleaning procedures are reviewed and so on. The end purpose, we may state at the cost of repetition, being to ensure that the product manufactured by the assessee and the process adopted for manufacturing is such that it can be certified as “halal”. What technicality is involved in halal compliant, has not been pointed out by the Revenue. As per the common meaning of the term “halal”, as noted above by us, we do not find any technicality involved in halal compliant. Therefore, we hold, that the findings of the Ld.CIT(A) that halal certification involved technical knowhow being made available to the assessee, is incorrect on facts. The payment made by the assessee to IFANCA therefore for halal certification and supervision charges, did not qualify as “Included Services” in terms of Article 12(4) of the DTAA with USA and the said payment, we hold, did not qualify for withholding tax in terms of the DTAA. The disallowance of the said expenses for non –deduction of tax at source is therefore unwarranted. The disallowance therefore of the amount of certification and supervision paid to the IFANCA directed to be deleted. - Decided in favour of assessee.
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