TMI Blog2012 (2) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant by : Shri Pavan Ved Respondent by : Shri Sitaram Pareek O R D E R Per RAJENDRA SINGH (AM) : This appeal by the Revenue is directed against the order dated 14.06.2010 of CIT(A)-4, Mumbai for the Assessment Year 2007-08. The only dispute raised in this appeal is regarding the disallowance of `.5.33 crores u/s.40(a)(i) of the I.T. Act. 2. The facts in brief are that the AO during the assessment proceedings noted that the assessee had paid Steamer Freight, Terminal Handling and others sums to different foreign shipping companies, totaling to `.5,33,26,726/-, on which no taxes were deducted. The AO, therefore, asked the assessee to explain as to how the said payments should not be disallowed u/s.40(a)(i) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the payments made to foreign shipping companies were not taxable in India. It was also submitted that levy and recovery of tax in respect of ships, belonging to or chartered by a non-resident, was covered by the provision of section 172. In such cases, the provisions of section 195 were not applicable, as clarified by CBDT in Circular No. 723 dated 19.09.1995. CIT(A) agreed that the issue was covered by the said Circular of CBDT and, therefore, he held that the provisions of section 195/40(a)(i) were not applicable. Accordingly, he directed the AO to delete the addition made. Aggrieved by the said decision, the Revenue is in appeal before the Tribunal. 3. Before us, the Ld. AR for the assessee reiterated the submissions made before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of payments made to agents of foreign shipping companies on account of freight, terminal handling etc. The assessee had claimed before the AO that the income of foreign shipping companies was not taxable in India and the AO in the assessment order had not disputed this claim. He disallowed the claim following the judgment of Hon'ble High Court of Karnataka in the case of CIT vs. Samsung Electronics Ltd. (supra), as per which the tax u/s.195 had to be deducted even if the payments were not taxable in India. The said judgment is no longer a good law in view of the judgment of Hon'ble Supreme Court in the case of G. E. India Technology Centre (P) Ltd. (supra), in which it has been held that the provisions of section 195 can be applied only i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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