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2005 (2) TMI 746 - ITAT MUMBAIDeduction of tax at source - ‘Assessee in default’ - interest u/s 201(A) - reimbursement of expenses - commission payment - payments made to other foreign entities other than the Lead Managers - nature of services - fees for technical services within the meaning of Article 113 of the DTA Agreement between India and U.K - HELD THAT:- The reimbursement of expenses made by the assessee amount are not taxable as it will not come within the purview of section 9(1)(vii) of the Income-tax Act. So also the payment to Bankers amounting to Rs. 4,38,150 and Rs. 8,76,065 and Rs. 6,85,654 are all payments for services rendered as they were admittedly paid towards fees and they arise in India and thus liable to be deducted tax at source u/s 195. However, in view of DTA with UK is applicable and these payments will not fall within the definition of ‘fee for technical services’ u/s 134(c) and hence they are not taxable in India and assessee is not liable to deduct tax from them. Consequently, it is not an ‘assessee-in-default’ u/s 201. Therefore, interest u/s 201(A) is not chargeable. Since the assessee has not made application u/s 195(1) of the Income-tax Act to the Department, all the payments made by the assessee that are found liable for TDS on the entire lump-sum payment. Thus, we hereby find that all the issues raised by the assessee on merits are accordingly answered. Admittedly, the assessee has not furnished the required details while filing the return for the year corresponding to the GDR issue in question, keeping vacant the relevant Column No. 6 available in the return. Therefore, the aspect of when the limitation starts in the absence of any specific direction given in the statute and it will not start unless the taxing authorities came to the knowledge of said issue. It is the contention of the Department that soon after it came to know the issue, they have issued show-cause notice stated supra and hence, the assessee could not show that the Department has committed any deliberate delay or it has not taken action within reasonable time in the absence of any specific time laid down by the statute. Thus, we find that this contention regarding limitation raised by the assessee will not stand for legal scrutiny. Accordingly, we hereby up-hold the same finding the issue raised by the assessee as devoid of merits and dismiss the same. In the result, the appeal filed by the assessee is disposed off accordingly.
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