9911796707
TMI Blog2017 (11) TMI 1968X X X X Extracts X X X X X X X X Extracts X X X X ..... nafter) dated 23.12.2015 for the Assessment Year (AY) 2013-14. 2. The appeal raises a single issue, i.e., the maintainability or otherwise in law, and in the facts and circumstances of the case, of the disallowance u/s. 40(a)(i) in the sum of Rs. 27,01,189/-, i.e., on account of non deduction of tax at source on the following payments to Opportunity International, USA (OI), a non-resident non-profit organization, of which the assessee is a Member: Nature of payment Amount Rs.) Collateral support fee 21,55,860 OI-Membership fee 12,94,625 MIS Emerge fee 8,58,242 Total 43,08,727 The Assessing Officer (AO) disallowed the same in view of the admitted failure on the part of the assessee to deduct tax at source under Chapter XVII-B of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business activity in India was directed to the appellant company by the non-resident parent. The amount paid was a fee for technical services (FTS) covered u/s. 9(1)(vii) of the Act. Section 40(a)(i) provides for disallowance as business expenditure in respect of sums paid to non-resident without withholding tax, i.e., makes their deduction in computing the business income of the payer subject to the same, so that the deduction could be claimed in a later year upon deduction tax at source. The same would accordingly apply. As he had, in appeal, accepted the assessee's plea with regard to prior period expenses, the disallowance u/s. 40(a)(i); the telescoping benefit being no longer available, stood restored to Rs. 27.01 lacs. Aggrieved, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of FTS. The collateral support is, as explained during hearing, either by way of undertaking or provision of security, enforceable in India, to enable the assessee, a micro finance company, to borrow funds from banks and financial institutions for the purpose of its business. OI Membership is again to enable the assessee to secure the membership of an entity, representing a framework of organizations, i.e., to secure its membership and, thus, the various services and benefits for the conduct of its business in India under its aegis. MIS Emerge fee is again for reporting systems (for micro finance organization and finding solutions), perhaps to be followed as a member. These are clearly in the nature of managerial and technical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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