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2006 (3) TMI 215 - AT - Income TaxTDS u/s 194C - Assessee In Default - limitation - taxability of citizen tax - HELD THAT:- Tribunal also found that even before the survey, the assessee was trying to resolve the dispute and they had prepared a letter which was handed over to the survey officials on the date of survey itself and had paid the tax and interest before the order under ss. 201(1) and 201(1A) was passed. It is not in dispute that the period under consideration was a particular period during which most of the foreign companies were in doubt about the taxability of the foreign component of the salary. It cannot be disputed that u/s 192, what the deductor is expected to do is to make a bona fide estimate of the salary and deduct tax therefrom. In the present case, the assessee has proved its bona fides to the hilt and thus, cannot be regarded as an assessee in default. The assessee's case is fully covered in its favour by several decisions of the Tribunal and hence we need not detain ourselves for long to discuss at length the issues before us. Thus, we hold the orders for financial years 1988-89 to 1994-95 to be invalid on grounds of limitation and for financial years 1995-96 to 1998-99, we hold the assessee not to be in default. Since orders for seven years are held to be invalid and since the assessee is held to be not in default for the remaining years generally, we need not go into the issue of taxability of "housing norms". It is found that it is a statutory levy in Japan which is required to be withheld by the employers from the salaries of their employees. Thus, following the decision of the Mumbai Bench of the Tribunal in the case of Gallotti Raoul vs. Asstt. CIT [1997 (1) TMI 539 - ITAT MUMBAI], it is held that the income is diverted at source by way of an overriding title and hence, not liable to be included in the total income of the assessee. We see no infirmity in the order of the CIT(A) who has relied on the aforementioned order of the Tribunal. Therefore, the ground raised by the Department stands rejected. In the result, all the appeals by the assessee are allowed and those of the Department are dismissed.
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