TaxTMI 
TaxTMI 
2025 (5) TMI 1409
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....f income on 30.10.2017 for the assessment year 2017-18 declaring total income of Rs. 4,84,79,780/-. The case was selected for scrutiny through CASS for complete scrutiny on the issues mentioned therein and notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee through email. In response to the above notices, the assessee uploaded the submissions through online portal. Assessee is engaged in the business of providing a range of business process outsourcing services and investment advisory services. After considering the details submitted by the assessee, the Assessing Officer observed that assessee has made payments to foreign entities, namely, Dash Enterprise and Acce....
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....itted that the services were utilised for earning income from a source outside India and hence, the exclusions provided in section 9(1)(vii)(b) and Article 12(3)(g) of India Australia DTAA would apply. After considering the above, he held that the services provided by them are covered under the scope of managerial services and accordingly, sustained the additions made by the AO. He also rejected the plea of the assessee on the disallowance made u/s 40(a)(i) does not fall under any clauses of Explanation 1 to section 115JB of the Act, hence, it cannot be added to the book profit. 4. Aggrieved with the above order, the assessee is in appeal before us raising following grounds of appeal: "1. That on the facts and circumstances of t....
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.... erred on facts and in law in confirming levy of interest under section 234B of the Act. 6. That the CIT(A) erred on facts and in law in confirming levy of interest under section 234C of the Act. " 5. At the time of hearing Ld AR of the assessee submitted as under :- "At the outset, kind attention is invited to the services provided by Dash Enterprises to the Appellant (refer page 43 of merits paper book): - Post box, receive, sort, scan & email correspondence; - Download/ decrypt client databases daily; - Set up, supply 80gsm A4 stock, envelopes & Laser Print Simplex @ 600DPI page personalised letter; - Set up & fold A4 letters to DL; - Set up & insert folded letters into DL....
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.... is, thus, submitted that the payments made by the Appellant were not for 'managerial services' being provided by Dash Enterprises, a non-resident company. The payments did not fall within the scope of section 9(1)(vii) of the Act and therefore, there was no obligation on the Appellant to deduct tax at source qua such payments. * Taxability under the DTAA Dash Enterprises is a company resident of Australia; taxability of receipts in the hands of the non-resident company has to examined in the light of the provisions of the DTAA, to the extent more beneficial to the taxpayer [refer section 90(2) of the Act]. In this regard, it is submitted at the outset that the CIT(A) has grossly erred in holding that the ....
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.... section 195 of the Act, which obligates the deductor to deduct tax at source only when income of the non-resident assessee is chargeable to tax in India. In the present case, thus, chargeability to tax of receipts of the non-resident com pan has to be determined under sections 4, 5 and 9 of the Act read with the provisions of the India-Australia DTAA and accordingly, corresponding liability to deduct tax at source will be determined in the hands of the Appellant. It is submitted that services provided by Dash Enterprises were in the nature of clerical/support services, such as helping the Appellant communicate with the customers (through letters, correspondences, etc.) in order to collect money due to them. In terms of Ar....