TMI Blog2015 (5) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per Article 6 of the DTAA with respective country it is taxable in that country and not in India. Accordingly, there is no tax payable by the recipient in India for rent received in respect of property situated abroad. Hence, provisions of section 195 are also not applicable in respect thereof. Considering above facts and also in the light of decision of Hon'ble Apex Court in the case of GE India Technical Centre Pvt. Ltd. [ 2010 (9) TMI 7 - SUPREME COURT] , if payment is not made to a non-resident which is not taxable under the provisions of Income Tax Act, question of making deduction u/s. 195 of Act does not arise. Consequently, no disallowance u/s. 40(a)(i) of the Act could be made. In view of the above, we uphold the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2002-03. The Tribunal, vide its order dated 27.12.2013 passed in ITA No.140/Mum/2006, has upheld the order of ld.CIT(A). We notice that the Tribunal has considered the provisions of sec. 9(1)(vii)(b), wherein it is provided that the income by way of fee for technical services payable by a resident in respect of services utilized in a business or profession carried on by such person outside India shall not be deemed to accrue or arise in India. Since there is no tax liability in the hands of recipient, the Tribunal held that there is no required to deduct tax at source as per the decision of Hon ble Supreme Court rendered in the case of GE India Technology Centre Pvt Ltd (327 ITR 456). By following the said principle, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. We do not find substance in the submission of learned DR because provisions of section 5(2)(b) read with section 9(1) of the Act apply only when income of the nonresident has accrued or arise or is deemed to accrue or arise in India. There is no dispute to the fact that India has DTAA with UK, USA and Japan and as per section 90 of the Act, provisions of DTAA will prevail over the provisions of Income Tax Act. Therefore even if said payment made by the foreign branches of Indian concern to foreign suppliers is concerned as business profits under Article 7 of the tax treaty with USA, UK and Japan, they are not taxable in India unless said recipients have permanent establishment in India as envisaged under Article 5 of the Tax Treaty with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the said country abroad and as per Article 6 of the DTAA with respective country it is taxable in that country and not in India. Accordingly, there is no tax payable by the recipient in India for rent received in respect of property situated abroad. Hence, provisions of section 195 are also not applicable in respect thereof. 17. Considering above facts and also in the light of decision of Hon'ble Apex Court in the case of GE India Technical Centre Pvt. Ltd. (supra), if payment is not made to a non-resident which is not taxable under the provisions of Income Tax Act, question of making deduction u/s. 195 of Act does not arise. Consequently, no disallowance u/s. 40(a)(i) of the Act could be made. In view of the above, we uphold ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
