TMI Blog2017 (12) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... mission.” This was reiterated by the subsequent Circular No 786 dated 7th February 2000. Both the circulars are binding on the Revenue. The contention of the Revenue that the above Circulars cannot override the Act, was negatived by this Court in CIT v. EON Technology (P.) Ltd. (2011 (11) TMI 20 - DELHI HIGH COURT) by holding that when a non-resident operates outside the country, no part of his income arises in India. Further it was held that merely because an entry is made in the books of accounts does not mean that the nonresident received any payment in India. Since no part of the income could be deemed to have accrued to the non-resident in India, there was no obligation to deduct TDS from the payment made to such non-resident. Conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material and inputs? 4. Whether learned ITAT/CIT(A) was justified in allowing MODVAT on input difference at ₹ 46,00,00,000/- on account of excessive unexplained consumption of material and when payment partakes the character of penalty? 5. Whether learned ITAT/CIT(A) was justified in allowing claim of ₹ 36,09,047/- out of ₹ 75,19,975/- on account of depreciation on enhanced liability when the liability arises when assessee agrees to pay the duty? 6. Whether learned ITAT/CIT(A) was justified in allowing disallowance under Section 40 (a) (i) at ₹ 4,19,09,113/- in view of the decision of the case of Chemloor Drug Ltd. v. CIT : 70 TTJ 936? 3. In view of the decision of this Court today in ITA No.250 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside the country, no part of his income arises in India. It is further contended that since the payment is usually remitted directly abroad it cannot be held to have been received by or on behalf of the agent in India. 10. The Revenue, however, contends that no application was made by the assessee under Section 195 (2) of the Act for making deduction of TDS at nil rate or lower rate. Remittance of the amount to the agents abroad without such certificate would, according to the Revenue, attract Section 40 (a) (i) of the Act. It is accordingly contended by the Revenue that the AO was right in disallowing deduction of the aforementioned payments made abroad. 11. The contention of the Revenue, invoking Section 195 (1) of the Act, proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Both the circulars are binding on the Revenue. 13. The contention of the Revenue that the above Circulars cannot override the Act, was negatived by this Court in CIT v. EON Technology (P.) Ltd. (supra), by holding that when a non-resident operates outside the country, no part of his income arises in India. Further it was held that merely because an entry is made in the books of accounts does not mean that the nonresident received any payment in India. Since no part of the income could be deemed to have accrued to the non-resident in India, there was no obligation to deduct TDS from the payment made to such non-resident. Consequently, the question of disallowing the payment under Section 40 (a) (i) of the Act for failure to deduct T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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