TaxTMI 
TaxTMI 
2020 (4) TMI 815
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....d ITA No.495/CHNY/2014 for assessment year 2010-2011 dated 20.03.2019 may be recalled, as the Tribunal had failed to adjudicate the following grounds of appeal and additional grounds of appeal filed before the Tribunal. ITA No.689/CHNY/2012 for assessment year 2009-2010 ''3. The Commissioner of Income tax (Appeals), LTU erred in confirming the disallowance of Rs. 6 1,23,06,054/- u/s 40(a)(i) as the appellant had not deducted TDS from the payments made to Hardy Exploration and Production India Inc (HEPI) u/s 195. 3.1 The Commissioner of Income tax (Appeals), LTU ought to have appreciated that payment made to HEPI was for the purchase of crude oil and hence payment is not subject to tax in India. 3.2 The Commissi....
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....(A) ought to have appreciated as per the provisions of Article 7 of the DTAA between India and USA, the ratio of the decision of the Apex Court in the case of G.E.Technology Centre P Ltd v CIT 327 ITR 456 and the clarification issued by the CBDT vide Instruction No.02/2014 dated 26.02.2014 read with CBDT Circular No.3/2015 dt 12.02.2015 the Assessing Officer has to first determine the income chargeable to tax under the Indian Income Tax Act 1961 on which tax has to be deducted and then compute the amount to be disallowed, if any, u/s 40(a)(i). As the Assessing Officer has not done so, even though the assessment of the recipient was available, the CIT(A) should have set aside the disallowance u/s 40(a)(i). 3. The CIT(A) ought to hav....
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....e;a) read with Proviso to sec 201 (1) and in the light of the decision of the Delhi High Court in the case of CIT Vs Ansal Land Mark Township Pvt Ltd read with Article 26(3) of the DTAA between India and USA, no disallowance can be made in the hands of the payer as the recipient has paid the Tax. 7. In any event, the Tribunal erred in law in not directed that disallowance u/s.40(a) (i) should be restricted to the amount of income which is found to be chargeable to tax in the hands of the recipient''. ITA No.495/CHNY/2014 for assessment year 2010-2011 ''5. The Commissioner of Income tax (Appeals), LTU erred in confirming the disallowance of Rs. 24,71 ,39,263/- u/s 40(a)(i)for non-deduction TDS from the payments made to H....
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.... made to M/s NIKO (Neco) Ltd. 6.1The Commissioner of Income tax (Appeals) ought to have appreciated that payment made to M/s. NIKO (Neco) Ltd was for the purchase of crude oil and hence payment is not subject to tax in India. 6.2 The Commissioner of Income tax (Appeals), LTU ought to have appreciated that Section 195 requires that tax is to be deducted at source from payment to a non-resident only if the amount is chargeable to tax. 6.3 The Hon'ble Supreme Court in G.E.Technology Center vs. CIT (327 ITR 256) has held that that if there is no income chargeable to tax in India then there is no requirement for deducting tax at source under the Income Tax Act, 1961. 6.4 Without prejudice, under the DTAA betwe....
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....s the remaining 2 1.38% has been met through contribution to provident fund (CPF), Gratuity and other retirement benefits. 7.3 The Commissioner of Income tax (Appeals), LTU ought to have appreciated that the above provisions are business liability has arisen in the accounting year that are to be discharged at a future date. The appellant is certain of incurrence of the liability and the estimation made with reasonable certainty. Having met these requirements, the provision created by the appellant should be allowed as ascertained liability. Further the following additional grounds were filed before the Tribunal 1. The CIT(A) erred in confirming disallowance u/s.40(a)(i) of the Act, for non-deduction of tax under s....
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....ount cannot be disallowed in the hands of the Assessee u/s 40(a)(i). 5. The CIT(A) erred in law in not applying the provisions of Non Discrimination as per article 26 (3) of the DTAA between India and USA, whereby, the payment by an Indian resident to a resident of USA should be allowed in computing the taxable income of the Indian payer as if such payments have been made to an Indian resident. As payments to an Indian Resident for purchase of oil does not require deduction of tax, payment to HEPI cannot be disallowed for non deduction of tax as per Article 26(3) of the DTAA. 6. The CIT(A) ought to have appreciated that as per article 26 (3) of the DTAA between India and USA which provides that allowability, in the hands o....