TMI Blog2011 (6) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... short the Act ) without setting off losses on notional basis. 3. We find that this issue is already decided by the jurisdictional High Court in the case of Velayudhaswamy Spinning Mills Ltd., ( 231 CTR 368). Their Lordship held at para-13 of the order as under:- 13. Sec.80-IA reads as follows: 33[(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arted or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995: 5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions are to be ignored. (2)n It is for the purpose of determining the quantum of deduction; (3) For the Assessment Year immediately succeeding the intial Assessment Year; (4) It is a deeming provision; (5) Fiction created that the eligible business is the only source of income; and (6) During the previous year relevant to the initial assessment year and every subsequent assessment year. From reading the above, it is clear that the eligible business were the only source of income during the previous year relevant to initial assessment year andevery subsequent assessment years. When the assessee exercises the option, the only losses of the years beginning from initial assessment year aloneare to be brought forward and no l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are that assessee had paid agency commission of ₹ 13,71,694/- to non-residents without deducting tax at source. Assessing Officer relying on the decision of Apex Court in the case of Transmission Corporation of Andhra Pradesh Vs. Commissioner of Income Tax , 239 ITR 587 held that assessee having failed to obtain a certificate from the Assessing Officer as specified in sub section (2) of Section 195 of the Act, there was failure to deduct tax and thereby inviting Sec.40(a)(i) of the Act. 6. Before the Commissioner of Income Tax(A), assessee relied on the decision of Hon ble Apex Court in the case of GE Indian Technology Centre (supra). As per the assessee, non-resident agents concerned had no permanent establishment (PE) in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause(v) or clause (vI) or clause(vii) of sub-section(1) and shall be included in the total income of the non-resident, whether or not, - (i) the non-resident has a residence or place of business or business connection in India; or (ii) the non-resident has rendered services in India. Here in the case before us, there is nothing on record shown by the Revenue for coming to a conclusion that the concerned non-resident agents had rendered any services in India or had a residence or place of business or business connection in India. Assessee having found that income of the non-residents were not chargeable to tax in India was justified in making the remittances without any deduction of tax at source. It is fully supported in this r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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