TaxTMI 
TaxTMI 
2009 (3) TMI 644
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....section 234B of the Act ? 2. The facts of the case are that the assessments were framed under section 143(3) by the Assistant Director of Income-tax, International Taxation, Circle 2(2), New Delhi (hereinafter referred to as "the AO"). Apart from tax, the Assessing Officer also levied interest under section 234B of the Act. Insofar as the amount of total income is concerned, the assessee followed the route of Mutual Agreed Procedure (MAP) under Article 27 of the Agreement for Avoidance of Double Taxation between the USA and India. The substantive portion of the order of the competent authority, India was as under :- "TENA, TBSAP and CNN have PE in India during the relevant previous years and 10 per cent of the advertising and subscrip....
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....charged interest under section 234B. The assessee is in appeal against this finding of the learned CIT (Appeals). 2.2 The ld. counsel for the assessee referred to the facts of the case, which have already been narrated by us in the preceding paragraph. It was submitted that various parties advertising their products paid consideration to the Indian agent of the assessee, who in turn remitted such amounts to the assessee. Neither the advertiser nor the agent deducted tax at source before payment or repatriation of the money respectively, as provided under section 195 of the Act. It was further submitted that the payers were obliged to deduct tax at source under section 195 on the component of the income involved in the amounts paid to the....
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....nt of tax deductible". It was further mentioned that the tax was deductible in accordance with provision contained in section 194A. It was held that the Tribunal was right in holding that the tax deductible at source would be reduced from the tax determined on the basis of regular assessment and the liability to pay interest should be calculated under section 215 of the Act accordingly. Reliance was also placed on the decision of Hon'ble Uttranchal High Court in the case of CIT v. Sedco Forex International Drilling Co. Ltd. [2003] 264 ITR 320. In that case, the argument of the learned counsel for the assessee was that the assessee had to estimate his current income under section 209(1) and if the employer made short deduction of tax at sour....
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....er submitted that a direction to charge or not to charge interest raises a substantial question of law, as held by Hon'ble Supreme Court in the case of Asstt. CIT v. Nirma (P.) Ltd. [2002] 257 ITR 57. It was also submitted that the Explanation to section 234B provides for reduction of tax deducted at source and, therefore, interest could be calculated in accordance with the provisions contained in section 234B. It was also submitted that it is only the Board which has the power to waive or reduce the levy of interest in cases where appropriate circumstances exist, as held by Hon'ble Madras High Court in the case of Tuticorin Vegetable Marketing Co. (P.) Ltd. v. ITO [2000] 243 ITR 202. Our attention was also drawn towards the order of Compet....
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....lculated on such current income at the rate in force for the relevant year. From this amount, the tax deductible at source or collectible at source has to be reduced, as provided in clause (d) of sub-section (1) of section 209. Therefore, it has to be found out whether any tax was deductible or collectible at source. In this connection, we may refer to the provisions contained in section 195 of the Act, which mandate that any person responsible for paying to a non-resident any interest or any other sum chargeable under the provision of this Act shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or any other mode, whichever is earlier, deduct ....