TMI Blog2014 (11) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... being rendered thereat, the issue of place of business in India is not an issue. The assessee’s stating of the payee having no place of business or establishment in India, is only toward and in support of its contention of the services being rendered wholly outside India. There is in fact no charge by the Revenue of the payee having any place of business or otherwise business connection in India. The said explanation would, therefore, be of no consequence - Decided against revenue - I.T.A. No. 4522/Mum/2013 - - - Dated:- 21-11-2014 - SHRI JOGINDER SINGH, JM AND SHRI SANJAY ARORA, AM For the Petitioner : Shri Pawan Kumar Beerla For the Respondent : Shri Ajit U. Amdekar ORDER Per Sanjay Arora, A. M.: This is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apex court in the case of GE India Technology Centre (P.) Ltd. vs. CIT [2010] 327 ITR 456 (SC), which was found by the ld. CIT(A) to be squarely covering the assessee s case. The disallowance having been deleted thus; aggrieved, the Revenue is in appeal. 4. We have heard the parties, and perused the material on record. The payment to the payee, Sangeeta Choudhary, even as clarified before the assessing authority, was for sales and marketing support outside India. No part of the services, toward which payment had been made to her, was rendered in India; the payee also having no place of business or establishment in India. There was thus, as per the assessee, no question of any part of the impugned sum being chargeable to tax in India; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force : Provided that in the case of interest payable by the Government or a public sector bank within the meaning of clause (23D) of section 10 or a public financial institution within the meaning of that clause, deduction of tax shall be made only at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode; Provided further that no such deduction shall be made in respect of any dividends referred to in section 115-O. (2) Where the person responsible for paying any such sum chargeable under this Act (othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to every word in the section. The interpretation by the Revenue was, in its view, guided more by administrative convenience, and which would though imply deduction of tax even on payments qua which there was no territorial nexus with India or otherwise were not chargeable to tax in India. Administrative considerations could not be the basis of the interpretation of the statutory provisions, even as the law contemplates adequate safeguards in the form of section 40(a)(i) and section 195(6); the latter being inserted on the statute by Finance Act, 2008 w.e.f. 01.04.2008. The hon ble court also explained the decision in the case of Transmission Corpn. of A.P. Ltd. (supra). Section 195 contemplates deduction of tax at source not only on amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), ought to have explained as to how it is infirm or does not amount to a correct reading of the said decision, or is otherwise not applicable in the facts of the case. In fact, the assessee having admittedly neither deducted tax at source nor made any application u/s.195(2) to the A.O., on the footing that no part of the relevant payment represents income chargeable to tax in India, the Revenue ought to, in our view, have impugned the said basis, on which the assessee s case rests. And which it has failed to in any manner. If, as maintained throughout by the assessee, no part of the services, for which payment has been made, stand rendered in India, how we wonder could he be faulted in holding it to be not chargeable to tax in India. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices and, thus, only in the nature of commission or service charges, the same has no nexus with India. All that, in our clear view, the said Explanation does is to remove the issue of the determination of the tax incidence on the basis of whether the payee is a tax resident in India from being a consideration for non-deduction of tax at source u/s.195. The payee in the instant case, being admittedly a resident of Canada, with the services being rendered thereat, the issue of place of business in India is not an issue. The assessee s stating of the payee having no place of business or establishment in India, is only toward and in support of its contention of the services being rendered wholly outside India. There is in fact no charge by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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