TaxTMI 
TaxTMI 
2014 (10) TMI 3
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....are that the appellant is an assessee and is involved in the activity of filling the liquefied petroleum gas. As a part of its activity, it is said to have entered into a contract with M/s. Imodco Inc, a firm from USA to acquire some machinery and installation thereof in the premises of the factory/plant in the year 1994-95. A sum of US $ 1,00,000/- was paid as consideration. However, no deduction at source, towards tax was made. Therefore, proceedings under Section 201 of the Act were initiated and a notice was issued treating the appellant as assessee in default. The reply submitted by the appellant was that the amount was paid to a non-resident and the contract was mostly for supply of goods on purchase and on that account, there was no ....
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....nt, on the other hand, submits that the appellant was under an obligation to effect the deduction of tax at source and to remit the same to the department, when it paid the amount of US $ 1,00,000/- to the U.S firm and its failure, naturally resulted in initiation of proceedings under Section 201 of the Act. He contends that there is absolutely no doubt whatever, as to the taxability of the amount paid by the appellant and in that view of the matter, Section 201 is the appropriate provision. Learned Senior Counsel further submits that the appellant never came forward with a plea that the contract comprised of two parts and it cannot be permitted to canvass that contention at this stage, for the first time. The deduction of tax at source, i....
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....hargeable under the head Salaries) 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 by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force(remaining part of the section is omitted as not relevant for this case). In the instant case, the appellant is not able to demonstrate that the person or agency whom it paid the amount is the one that is described in the first part of sub-section (1) of Section 195 of the Act and thereby it is not under obligation to pay tax at all. Secondly, the appellant was not able to establish that the amount paid by it is not taxable. It is not in dispute that it was paid in th....