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2018 (2) TMI 2037 - ITAT AHMEDABADTDS u/s 195 - remittances to non-residents - disallowance made u/s 40(a)(i) - freight charges and cargo handling charges paid by the assessee in foreign currency to non-residents for services rendered outside India - HELD THAT:- CIT(A) has rightly concluded that the freight charges and cargo handling charges paid by the assessee in foreign currency to non-residents for services rendered outside India is not susceptible to provisions of section 195 of the Act. It is an admitted position that the recipients did not have any permanent establishment in India or any agent in India. Consequently, the chargeable income thereof under s.4 did not accrue or arise in India in the hands of the non-residents having regard to section 5 r.w.s.9(1) of the Act. Accordingly, where the income in the hands of non-residents in question i.e. foreign remittances made by the assessee was not taxable in India, the remittance was not susceptible to withholding of taxes (TDS) under s.195 of the Act. In the absence of abligation cast upon the assessee to deduct TDS under s.195, section 40(a)(i) has no application in the instant case for disallowance of the expenses. The CIT(A) has rightly concluded the issue in favour of assessee
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