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2018 (5) TMI 1240 - HC - Income TaxLoss in connection with the hedging contract - business loss or speculative loss - Held that:- Admittedly, the assessee is not a dealer in foreign exchange. For the purpose of hedging the loss due to fluctuation in foreign exchange while implementing the export contracts, the assessee had entered into forward contract with the banks. In some cases, the export could not be executed and the assessee had to pay certain charges to the Bank and thereby incurred certain expenses. These expenses the assessee claimed by way of expenditure towards business. We do not find that the transaction can be stated to be in speculation as to cover under sub-section (5) of section 43 of the Act. TDS u/s 195 - addition u/s 40(a)(ia) - assessee had not deducted tax at source on foreign commission payments - income accrued in India - whether the non-resident agent of the assessee was operating at his own level and no part of the income arose or accrued in India? - Held that:- As decided in NOVA TECHNOCAST PVT LTD case [2018 (5) TMI 1182 - GUJARAT HIGH COURT] Explanation inserted with retrospective effect provides that obligation to comply with subsection [1] of Section 195 would extend to any person resident or non-resident, whether or not non-resident person has a residence or place of business or business connections in India or any other persons in any manner whatsoever in India - once the conclusion is arrived that such payment did not entail tax liability of the payee under the Act, as held in the case of GE India Technology Centre P. Limited [2010 (9) TMI 7 - SUPREME COURT OF INDIA], sub-section [1] of Section 195 of the Act would not apply. The fundamental principle of deducting tax at source in connection with payment only, where the sum is chargeable to tax under the Act, still continues to hold the field. In the present case, the Revenue has not seven seriously contended that the payment to foreign commission agent was not taxable in India. - Decided against revenue
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