TMI Blog2023 (1) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... is attributable to the payee there is no liability to deduct tax at source in the hands of the tax deductor. After quoting a passage from Kedarnath Jute Mfg. Co. Ltd. [ 1971 (8) TMI 10 - SUPREME COURT ] this Court has held that the existence or absence of entries in the books of accounts is not decisive or conclusive factor in deciding the right of the assessee claiming deduction. So far as the authority in Palam Gas Service [ 2017 (5) TMI 242 - SUPREME COURT ] it is relevant to note that the payees were identified in that case as recorded in para 5 of that judgment. In contradistinction, in the case on hand the payees were not identified. Therefore, the said authority does not lend any support in the contentions urged on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding software services and development of various products for Telecommunication Industry. For the A.Y. 2009-10, assessee filed 'Nil' returns, after claiming deduction of Rs.8,37,98,696/- under Section 10(a) of the Income Tax Act, 1961 and carried forward losses amounting to Rs.8,48,07,325/-. Subsequently, it filed a revised income without claiming any carried forward losses. The AO [Assessing Officer] referred the case to the TPO [Transfer Pricing Officer] under Section 92(c) of the Act. Assessee filed its objections to the draft order passed by the Assessing Officer before the DRP [Dispute Resolution Panel] . Pursuant to the directions issued by the DRP, the AO passed order on January 30, 2014 under Section 143(3) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the payee as held in Eli Lily Co. [2009] 312 ITR 225 (SC), GE India Technologies [2010] 327 ITR 456 (SC), Bharti Airtel [2015] 372 ITR 33 (Kar); if the income component itself is not embedded in the amount provided, then there cannot be any liability to deduct tax at the source; estimated provision made in the books does not attract Section 194J of the Act; in respect of payments to non-residents, TDS liability would require examination of applicable DTAA [Double Taxation Avoidance Agreement.] assessee had provided for ad hoc amount as year-end provisions. The actual amount of invoice which would be approved by the assessee could vary substantially. If tax were to be deducted at the year end, then it would re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia) (P) Ltd [Stated Supra] and Associated Cement Co. Ltd. Vs. CIT. 67 Taxman 346 (SC). 8. We have carefully considered the rival contentions and perused the records. 9. It is not in dispute that the provisions made at the end of the accounting year were reversed in the beginning of the next year and no payees were identified nor the exact amount payable. 10. In Karnataka Power Transmission Corporation Ltd. Vs. Deputy Commissioner of Income Tax (Supra), relied upon by the assessee, this Court has held that if no income is attributable to the payee there is no liability to deduct tax at source in the hands of the tax deductor. After quoting a passage from Kedarnath Jute Mfg. Co. Ltd. Kedarnath Jute Mfg. Co. Ltd. Vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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