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2023 (9) TMI 1036 - AT - Income TaxTDS u/s 195 - non-deduction of tax at source on payment made to Italian company[non-resident company] for supply of manufacturing plant of tissue paper - liability u/s 201(1) and 201(1A) - Whether business income was taxable in India under the DTAA? - HELD THAT:- The entire plant was supplied in movable packages and assembled with the help of two local contractors engaged by the assessee. No documentary evidences are presented by the Assessing Officer or ld CIT(DR) to establish that plant was assembled or commissioned by the non-resident in India. In the absence of any such documentary evidence, no income can be accrued or arisen or deemed to have accrued or arisen to the non-resident in India under the provisions of the Act. CIT(A) examined the taxability of the non-resident under the provisions of the DTAA between India and Italy. The AO, in the Remand Report, had proposed that business income had arisen to the non-resident. However, there was no evidence to suggest that the Italian company had established a permanent establishment in India under the DTAA. Consequently, no business income was taxable in India under the DTAA. In conclusion, as no income accrued to the non-resident either under the Act or the DTAA, the assessee was not obligated to comply with Section 195(1) of the Act - Decided in favour of assessee.
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