2025 (1) TMI 967

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....16 [CIT(A)] on 28-06- 2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 144C(3) r.w.s 144B of the Act on 25-10-2021. The grounds raised by the revenue read as under:- 1. The Id. CIT (A) erred in deleting the disallowance made by the AO of Rs. 32,64,15,896/- u/s. 40(a)(ia) of the Act by placing reliance on the order of Hon'ble Supreme Court in the case of M/s. Engineering Analysis Centre of Excellence Pvt. Ltd vs CIT. 1.1. The 1d. CIT (A) is erred in deleting the disallowance of deduction u/s 40(a)(i) of the Act by relying on the decision of the Hon'ble Madras Court in TCA Nos.549, 554, 555 & 558/2021 vide order dtd. 20.12.2021 in the assessee's own case, and upon the de....

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...., disallowance u/s 40(a)(i) and application of Arm's Length interest rate. 2. The Ld. CIT-DR referred to the findings of Ld. AR whereas Ld. AR stated that the issue is squarely covered by earlier decisions of Tribunal. The Ld. AR also placed on record decision of Hon'ble High Court of Madras in TCA Nos.549 & ors. of 2021 dated 20-12-2021. Having heard rival submissions, the appeal is disposed-off as under. 3. Disallowance u/s 40(a)(i) 3.1 The assessee paid software service charges of Rs. 32.64 Crores to a foreign entity i.e., Saipem, Italy but did not deduct tax at source on the ground that such software payments do not require withholding tax u/s 195. It was submitted that the relevant agreement provide for limited right to use co....

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....le Court has referred to its earlier decision in TCA Nos.150 of 2015 dated 03-09-2021 which has followed the decision of Hon'ble Supreme Court in the case of M/s. Engineering Analysis Centre of Excellence P. Ltd vs. CIT (2021 SCC Online SC 159). It has finally been held in assessee's case that the assessee is not liable to deduct tax at source on payments made to non-resident towards software support charges and consequently, expenses could not be disallowed u/s. 40(a)(i) of the Act. In subsequent decision for AY 2016- 17 dated 28-06-2023 ITA No.1088/Chny/2022, Tribunal has followed the same. Therefore, facts being pari-materia the same, respectfully following the decision of Hon'ble High Court of Madras, we dismiss this ground as raised by....