TaxTMI 
TaxTMI 
2011 (5) TMI 700
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....on of A.P Ltd. (239 ITR 587), the learned CIT(A) ought to have upheld the action of the Assessing Officer. 2.3 The learned CIT(A) failed to note that the jurisdictional ITAT's decision in the case of M/s. Frontier Offshore Exploration (India) Ltd. - ITA No. 2037/Mds/2006 dated 28.2.2007 supports the action of the Assessing Officer. 2.4. Having regard to the decision of the jurisdictional ITAT in the case of West Asia Maritime Ltd. v. ITO, International Taxation II (111 ITD 155) wherein the ITAT quoting the decision of the Hon'ble Supreme Court in the case of P.C. Roy & Co. (India) P. Ltd. v. A.C. Mukherjee, ITO (36 ITR 365) has observed that "if chargeable under the provisions of the Act means actually liable to tax, in other words, if the sum contemplated is taxable income, the difficulty is undoubtedly created as to complying with the provisions of the section", the learned CIT(A) ought to have confirmed the action of the Assessing Officer. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored." 4. At the time of hearing, the learned DR su....
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....Pvt. Ltd. (supra). For the sake of convenience it is reproduced as below: "...........As pointed out by the Ld.D.R., basically the issue involved in the case of Transmission Corporation of A.P. Ltd. v. CIT (supra) was determination of tax and interest etc. u/s 201 and one of the issue was whether the provisions of section 195 of the Act are applicable to cases where sum paid to nonresident does not wholly represent income. The Hon'ble Andhra Pradesh High Court as well as the Hon'ble Supreme Court has very clearly observed that if it is held tax is to be deducted only on the proportion of income comprised in the gross payment made to non-resident in the absence of section 195(2), then the provisions of 195(2) would be otiose and therefore, it may not be correct to interpret the provision in this fashion. Then the Supreme Court again very clearly observed that it is a tentative deduction which clearly indicate that deduction has to be made on the whole payment and if the assessee is of the opinion that whole of such gross amount does not constitute income of the recipient, then he could always come to the department by way of application u/s 195(2). That is why the Hon'ble Supreme....
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....r clearing/forwarding at the foreign ports and the remittances were for services rendered outside India. It was the further submission that the finding of the learned CIT(A) that all the freight payments or clearing and forwarding charges, payments have been received abroad and the real work of transportation or clearing and forwarding by the non-resident have been done abroad only, has not been disputed by the Revenue. It was the submission that the payments having been made for services rendered outside India, the foreign companies which did not have any branches or business places in India and which were made in accordance with the Chartered Accountant's certificate issued as also the circulars of the Reserve Bank of India and the CBDT, were not liable for deduction of tax u/s 195 and consequently no disallowance by invoking the provisions of section 40(a)(i) of the Act was call for. He vehemently supported the order of the learned CIT(A). He also filed a ground-wise note on the issue, which is reproduced below : "CHART Gr.No. Department's grounds Assessee's submissions. 1. General General 2.1 The learned CIT(A) erred in deleting the disallowance of Rs....
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....squarely covers the assessee's case. It was the submission that the case laws as referred to by the Revenue were considered by the decision of the Special Bench of the ITAT in the case of Prasad Production Ltd. (supra). 6. We have considered the rival submissions. A perusal of the assessment order clearly shows that the Assessing Officer has disallowed the operation payments to the non-residents. The assessment order clearly recognizes the payments to have been made to non-residents. The Assessing Officer has basically disallowed the claim of expenditure on the ground that the power to decide whether tax is deductible or not on any payment to a non-resident cannot be exercised suo motu by the assessee itself under the existing laws. However, a perusal of the reply filed by the assessee before the Assessing Officer dated 14-12-2007 clearly shows that the assessee has specifically confirmed that the payments were made to the foreign companies for services rendered outside India and the companies did not have any branch or business place in India. The assessee has also categorically confirmed that the Chartered Accountant's certificate has been issued to confirm that no tax is dedu....