Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 35 - AT - Income TaxTDS u/s 195 - Addition u/s 40(a)(i) - payments made for purchase of raw material, components, etc. from non-resident Indian - DTAA between India and Japan - HELD THAT:- As far as the payment to Honda motor Japan is concerned, the issue in dispute is squarely covered by the decision of the Tribunal in assessment year 2009- 10 [2017 (8) TMI 1535 - ITAT DELHI] wherein the Tribunal has followed the decision of the Hon’ble Delhi High Court in the case of CIT Vs. Herbalife [2016 (5) TMI 697 - DELHI HIGH COURT]. We note that Hon’ble High Court in the case of Herbalife (supra) has also considered the amendment in provisions of section 40(a)(i) of the Act by way of insertion of sub-clause(ia) w.e.f. 01/04/2005. Accordingly, we delete the disallowance in respect of payment to Honda motor Japan. Regarding payment to Honda Asia Thailand in the year under consideration, the assessee contended that no PE has been held by the DRP in the case of non-resident company in assessment year 2010-11 and this fact was not controverted by the Ld. CIT-(DR), thus, following the decision of the Tribunal in assessment year 2009-10, we hold no disallowance could be made under section 40(a)(i) of the Act for payment made to Honda Asia Thailand without deduction of tax at source. We are of the considered view that addition made/sustained by the AO/CIT(A) u/s 40(a)(i) for not deducting the tax at source of payments made for purchase of raw material, components, etc. from non-resident Indian is not sustainable in the eyes of law, hence ordered to be deleted. - Decided in favour of assessee.
|