https://www.taxtmi.com/caselaws?id=384252 Payments made to non-residents were held not chargeable to tax in India where the department failed to show a permanent establishment in India and the applicable DTAA treated the receipts as business profits taxable only in the state of residence. Compensation paid to a Malaysian company for non-fulfilment of an export contract was therefore outside section 195, and disallowance under section 40(a)(ia) could not stand. The same approach applied to a quality rebate paid to a UK company on export sales, which was treated as a sales discount rather than separately taxable income. In both matters, the disallowances were deleted and full relief was granted. en-us Wed, 17 Jul 2019 00:00:00 +0530 Thu, 08 Aug 2019 15:16:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=384252 Payments made to non-residents were held not chargeable to tax in India where the department failed to show a permanent establishment in India and the applicable DTAA treated the receipts as business profits taxable only in the state of residence. Compensation paid to a Malaysian company for non-fulfilment of an export contract was therefore outside section 195, and disallowance under section 40(a)(ia) could not stand. The same approach applied to a quality rebate paid to a UK company on export sales, which was treated as a sales discount rather than separately taxable income. In both matters, the disallowances were deleted and full relief was granted. Case-Laws Income Tax Wed, 17 Jul 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=384252