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2010 (3) TMI 167 - HC - Income TaxTDS 195 - mobilization and demobilization costs reimbursed by the appellant to VOAMC - Tribunal holding that in terms of the provisions of Section 195 of the Act, the payer is obliged to deduct tax at source in respect of any sum paid to a non-resident and the payee was not required to determine whether the said sum is chargeable to tax or not under the provisions of the Act - HELD THAT:- In the present case, the plea of the VOAMC (the resident/non-resident) that it is not liable to pay any tax in India has been accepted by the income tax authorities. No doubt, the return filed by it was processed u/s 143(a)(i) . From this, it was sought to be contended by the learned counsel for the Revenue that there is no determination of the issue involved. Fact remains that by accepting the return as filed, the VOAMC has been refunded tax at source by the assessee herein and the implication that it is not liable to pay tax. In case, higher authority passes any order to the contrary, it would be open to the income tax authorities, in the case of the assessee also, to treat the assessee in "default". However, as of today, the position is that VOAMC is not treated as liable to pay any tax. We, thus, answer the question No. 1 in favour of the appellant/assessee holding that the assessee was not liable to deduct tax at source under Section 195(1) of the Act in respect of the mobilization and demobilization costs reimbursed by the appellant to VOAMC. The assessment proceedings in VOAMC are reopened and the final view taken is that the VOAMC is assessable to tax, the assessee herein would also be treated as assessee in "default", which would attract the consequences provided under Section 40(a)(i).
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