TaxTMI 
TaxTMI 
2014 (4) TMI 68
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act, dated 31-08-2010 which was without Jurisdiction and therefore Bad in Law and Void ab-initio. 2. The Ld. CIT (A) further grossly erred hi Law as well as on facts in confirming the action of the A.O. in treating the Assessee in Default U/s 201 of the I. T. Act for Non- Deduction of tax at Source in respect of the Remittance Made of Rs.44,69,958/-, though the same did not Constitute as Income Either U/s 9(1)vi)/(vii) or under Article 13 of the Indo-UK Double Taxation Avoidance Agreement. 3. The Ld. CTT(A) has further grossly erred in Jaw as well as on facts in confirming the action of the A.O. in treating the Assessee in default U/s 201 of the I. T. Act for Non- Deduction of tax at ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted 31/08/2010 passed under section 201/201(1A) of the Act and is as under: S.No. Date Amount remitted 1. April 2006 36,24,110 2 August 2006 11,92,050 3 January 2007 1,14,843 4 February 2007 5,64,867 For non-deduction of tax the assessee has been held to be liable to pay a sum of Rs. 6,41,917/- being tax required to be deducted and Rs.3,20,423/- on account of interest under section 201(1A) of the Act. An appeal was filed before Ld. CIT(A) who has held that payment made by the assessee to the U.K. company was in the nature of fees for technical services within the meaning of Article 13(4)(c) of India U.K. Treaty and taxable in India. The assessee was liable to deduct tax at source under section....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of phase one and two, the said amount was not chargeable to tax in India in the hands of the recipient company. Therefore, assessee was not liable to deduct tax at source as according to section 195 tax deduction is required to be made only if the said amount is chargeable to tax under Indian Income Tax Act. He further submitted that so far as it relates to amendment brought into the statute by Finance Act, 2012 with retrospective effect from 1/6/1976, even applying the same, assessee cannot be held liable for deduction of tax as per the decision of ITAT Mumbai in the case of Channel Guide India Ltd. v. Asstt. CIT 139 ITD 49. Ld. AR has placed a copy of said order on our record and a copy was also given to Ld. DR. He in this regard referr....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... If we examine the facts of the present case, without applying aforementioned amendment, in view of aforementioned decision of Hon'ble Supreme Court in the case of Ishikawajima-Harima Heavy Industries (supra), it has to be held that if the entire services rendered by the foreign company to the assessee in respect of phase one and two outside India, then the same cannot become chargeable to tax in the hands of the foreign company in India. Unless the amount paid by the assessee company to the foreign company does not become chargeable to tax in India then the question of applicability of section 195 does not arise. Therefore, without considering the aforementioned amendment it has to be held that there was no liability of the assessee to de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tend that subsequent amendments made in the domestic law need to be incorporated in the treaty. 25. In our opinion, the issue involved in the present case however, is relating to disallowance made uls.40 (a)(i) for non-deduction of tax- at-source from the payment made by the assessee to SSA and as held by Ahmedabad Bench of this Tribunal in the case of Sterling Abrasives Ltd. v. ITO [IT Appeal Nos. 2243 & 2244 (AHD) of 2008, dated 23-12-2010] cited by the Ld. Counsel for the assessee, the assessee cannot be held to be liable to deduct tax at source relying on the subsequent amendments made in the Act with retrospective effect. In the said case, Explanation to sec.9(2) was inserted by the Finance Act, 2007 with re....