2022 (9) TMI 836

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..... ies to whom payments are made by the Assessee are covered by the provisions of section 172 rw Clause 5 of Circular No. 723 and therefore Assessee is not liable to deduct tax on the same. However, the agents/companies in reference are registered in India therefore they are resident tax entities, even if they are subsidiaries. Hence, their income is taxable in India under Income-tax Act, 1961. 2. Most of the shipping companies claim DTA benefit as per the standard procedure, herein the right of taxation is given to state of residence of shipping and airlines companies. Since, 194C is quite clear wherever a contractor makes payment for work to a resident than section 194C will get attracted. As the subsidiaries of foreign shipping and airlin .....

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..... f the Act has been deducted. 6. The assessee was asked to explain as to why the assessee should not be deemed to be an assessee in default u/s 201/201(1A) of the Act. 7. The assessee claimed that provisions of section 194C of the Act do not apply to it, but furnished details of payments without TDS. 8. The contention of the assessee did not find any favour with the Assessing Officer who, taking a leaf out of the proceedings of F.Y. 2009-10 and 2010-11, treated the assessee to be an assessee in default and quantified the total default as under: Party Name Amount Paid TDS deductible Interest u/s 201(1 A} Total Default As per Annexure 74,77,17,577/- 1.49,54/352 45,84,289 1,9538,640/- 9. The assessee strongly agitated the matter b .....

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..... the tax, shipwise, and journey-wise, and the return within a maximum time of thirty days from the date of departure of the ship. 3. The provisions of section 172 are to apply, notwithstanding anything contained in other provisions of the Act. Therefore, in such cases, the provisions of section 194C and 195 relating to tax deduction at source are not applicable. The recovery of tax is to be regulated, for a voyage port in India by a ship under the provisions of section 1 72. 4. Section 194C deals with work contracts including carriage of goods and passengers by any mode of transport other than railways. This section applies to payments made by a person referred to in clauses (a ) to (j) of sub-section (1) to any "resident" (termed as con .....

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