9911796707
TMI Blog2012 (7) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) was justified in upholding the disallowance under section 40(a)(ia) of the Income Tax Act, 1961, on the ground that the payments made by the assessee to Indian agents of foreign airlines, namely Singapore International Airlines (Singapore), Emirates (UAE), British Airways (UK) and Lufthansa German Airlines (Germany), were not deducted to deduction of tax at source under section 194 C of the Act. Even though the assessee has several grounds of appeal, learned representatives fairly agree that it is our adjudication on the issue so identified above which will decide the fate of these appeals. 3. The assessment years involved are 2007-08 and 2008-09 and the CIT(A)'s impugned orders are dated 15th September 2011 and 14th October 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iged to deduct tax at source under section 194 C; and (c) even if it is assumed that the payments were made to the agents of the foreign companies, the assessee was under an obligation to move an application under section 195(2) requiring the Assessing Officer to determine whether tax was deductible from such foreign remittance. The Assessing Officer thus held that the assessee was obliged to deduct tax at source from these payments, and since he has failed to do so, these payments cannot be allowed as deduction in computation of business income. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. Learned CIT(A) discussed and elaborated upon the stand of the Assessing Officer and upheld the same. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have moved the application under section 195(2) in case of payments to non residents and assessee's failure to do so is to be visited with consequences for non deduction at source, the law is now settled by Hon'ble Supreme Court in the case of GE India Technology Centre (P.) Ltd v. CIT [2010] 327 ITR 456/193 Taxman 234 wherein Their Lordships have categorically held that, "where a person responsible for deduction is fairly certain, then he can make his own determination as to whether the tax was deductible at source and, if so, what should be the amount thereof". The plea of the revenue authorities to the effect that where the assessee does not move an application under section 195(2) and makes the remittance without deduction of tax at sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then no TAS is required to be deducted from such payment. This interpretation of the High Court completely loses sight of the plain words of section 195(1) which in clear terms lays down that tax at source is deductible only from "sums chargeable" under the provisions of the Income-tax Act, i.e., chargeable under sections 4, 5 and 9 of the Income-tax Act. 9. We have also noted that it is not even the revenue's case that the amounts paid to foreign airlines, on account of airfreight payments, are taxable in India, and quite rightly so, because, as the provisions of all the respective tax treaties clearly provide, the profits from operations of ships and aircrafts in the international traffic are taxable only in the state in which the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
