2014 (5) TMI 149

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....rpretation of Article 18 of the Double Taxation Avoidance Agreement styled as Indo-UK DTAA. He submits that the Income Tax Appellate Tribunal was not right in holding that the Assessing Officer unjustifiably and without any material held that the payment for reimbursement of expenses are liable for deduction of tax at source. The Assessee had not made an application under Section 195(2) of the Income Tax Act, and therefore, was required to deduct and pay the taxes on the gross amounts. 3. Mr. Sureshkumar would rely on the finding of the Assessing Officer, the wording of clause (2) of Article 18 and the judgment of Hon'ble Supreme Court in the case of "Transmission Corporation of A.P. Ltd. v. The Commissioner of Income Tax, (1999 239 ....

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....raph 7 of his order is that the respondent has paid tax on the amount it claims to have been paid to the Artiste. It has not deducted/ paid the tax out of payments made to the agent or for expenses. That requires an application to be made by the Assessee under Section 195(2) of the Income Tax Act. Therefore, it is required to pay tax on the gross amounts. The Assessee was therefore treated as defaulter. The amounts that have been paid to various artists are referred and default is quantified at Rs.32,31,815/-. According to the Assessing Officer, the Assessee should have paid tax on full amount, should have filed return of income as a representative assessee of non-resident and could have submitted the computation of income which accrues to ....

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....the International Artists in India. The Tax was deducted at source on the payment made to Artists for performance in India but it was not deducted at source on the commission paid to Mr.Colin Davie who acted as an agent between the Assessee and the Artists performed in India. The Tribunal after reiterating this factual position referred to Article 18, the rival contentions and concluded that the payment made to the Artists, the reimbursement has been completely misconstrued inasmuch as the agreements with the Artists and the understanding with Mr.Colin Davie would indicate that the payment of commission to him is not covered by the Article in question. Mr.Colin Davie never took part in the event organised. He did not exercise any personal a....