TMI Blog2014 (2) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... the Overseas Shipbuilding Cooperation Centre - There is no material placed on record to controvert the claim of the assessee that the assessee had no PE in India nor any business connection in India – thus, no tax was required to be deducted – the order of the CIT(A) upheld – Decided against Revenue. Penalty u/s 271C of the Act – Held that:- The penalty had been levied for failure to deduct TDS in respect of amount payable to M/s Overseas Shipbuilding Cooperation Centre - The AO had held that the assessee was liable to deduct tax in respect of the amount payable to the said concern and since there had been failure, the AO treated the assessee in default u/s 201(1) and levied interest u/s 201(1A). In addition penalty had also been levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny later on had been changed to Pipavav Shipyard Ltd. The assessee had taken financial assistance from Japan Bank for International cooperation (JBIC) in connection with the ship breaking project. The assessee had booked an amount of Rs. 122.65 lakh towards the consultancy charges payable to Overseas Shipbuilding cooperation Centre and the agency appointed and approved by JBIC. The AO noted that the assessee had not deducted tax at the time of credit/payment of the said sum. The AO, therefore, treated the assessee as in default u/s 201 and also levied consequential interest u/s 201 (1A). 3. The assessee disputed the decision of AO and submitted before CIT(A) that " Exchange of Notes" signed between the Government of India and Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... several judgments. It was also submitted that the order u/s 201 had been passed on 27-01-2010 whereas the due date of TDS was 31-5-2005 which was after more than four years. Therefore in view of the decisions of Tribunal on subject, order was barred by limitation. It was also pointed out that the limitation period had also been provided in the Act w.e.f 1.4.2010 u/s 201(3)(ii). CIT(A) after considering the submissions of the assessee held that the assessee had neither made the payment nor claimed any expenditure and, therefore the assessee was not liable for deduction of TDS. It was also held by CIT(A) that the order was barred by limitation in view of the decision of Mumbai bench of Tribunal in case of Raymond Woollen Mills Ltd. (57 ITD 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. Therefore only on the basis of entry in the books of accounts, the assessee could not be held liable for deduction of tax at source when ultimately the amount was found not payable nor it was paid, income therefore had not accrued to the Overseas Shipbuilding Cooperation Centre. The said company had also no PE in India nor had any business connection in India. There is no material placed on record before us to controvert the claim of the assessee that the assessee had no PE in India nor any business connection in India. The income on this account even if paid is not taxable in India. Therefore no tax was required to be deducted. Considering the facts and circumstances of the case, we see no infirmity in the order of CIT(A) canceling ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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