TaxTMI 
TaxTMI 
2025 (9) TMI 1677
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..... The relevant Assessment Year is 2019-20. 2. There is a delay of 35 days in filing this appeal. The Department has filed a condonation petition praying for condoning the delay in filing this appeal. On perusal of the reasons stated in the condonation petition, we are of the view that there is sufficient cause for late filing of this appeal and no latches can be attributed to the Department. Hence, we condone the delay in filing this appeal and proceed to dispose off the appeal on merits. 3. The grounds raised read as follows:- 1. The order of the Ld.CIT(A) is contrary to law, facts and circumstances of the case. 2. The Ld.CIT(A) has erred in restricting the disallowance u/s. 40(a)(i) to 30% of the total disallowance....
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....d in not appreciating the fact that DTAA is to be looked at from recipient's taxability perspective whose income has suffered double tax. Since DDT is a charge on the domestic company and not on behalf of the shareholder, the domestic company does not enter the DTAA domain. 4.For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the Ld.CIT(A) may be set aside and that of the Assessing Officer be restored. 4. Brief facts of the case are as follows: The assessee is a company engaged in the business of providing paint finishing system and related services to automotive manufacturer. For the assessment year 2019-20, the return of income was filed by the assessee on 30.11.2019 d....
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....yment only needs to be disallowed. The FAA on perusal of the payments made found that the payees are resident Indians and section 40(a)(ia) of the Act has application. The relevant findings of the FAA read as follows:- 7.3 Ground no. 2 to 3 pertains to disallowance under section 40(a)(ia). While filing the return of income, the appellant has claimed 100% of the payment made to residents under the provisions of section 40(a)(i), amounting to Rs. 58,00,953/-. The AO CPC has fully disallowed of the claim of the appellant. The provisions of Section 40(a)(ia) restrict the disallowance to 30% of payments made to residents without deduction of tax at source. Judicial precedents, including CIT v. Calcutta Export Co. [(2018) 404 ITR 654 (SC....
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.... 40(a)(ia) relating to resident payees, and does not govern the clear statutory distinction between residents and non-residents. Hence, without first ascertaining the residential status of the recipients, the relief allowed by the CIT(A) is unsustainable in law. 9. The Ld.AR on the other hand has filed a paper-book enclosing therein the details of break-up of the assessee's vendors and the payments made to them. By referring to the same, the Ld.AR submitted that it is clearly disenable that payments were made to resident Indians and hence, section 40(a)(ia) of the Act applies, which warrants only 30% disallowance of the total expenditure, instead of 100% u/s. 40(a)(i) of the Act. 10. We have heard rival submissions and perused the mat....
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.... at the rate of 20.56 % under the section 115-O of the Act. Now, the appellant has submitted that rate of tax on dividend under DTAA shall be applied for the distribution of dividend which is at 10%. The appellant has relied upon the following judicial pronouncement for the same:- * Hon'ble Delhi Bench of the tribunal in case of Giesecke &Derient (India) Pvt Ltd Vs ACIT (2020)(TS-522-ITAT-2020(del). * Hon'ble ITAT (Kolkata Bench) in the case of Indian Oil Petrnas Private Limited TS324-Tribunal-2021(kol) I have gone through the authority relied upon by the appellant and is of the considered view that DDT paid in excess is refundable to the appellant as per provision of section 237 read with article 256 of the const....
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....ompany's distributed profits, treated as final payment u/s 115-O (3) & (4) of the Act. No further credit or deduction is allowable to the company or shareholder. The shareholder does not enter the DDT domain. DDT is a tax on the company's profits, not on dividend income. This is settled by the Hon'ble Supreme Court in Godrej & Boyce Mfg. Co. Lid. v. Dy. CIT [2017] 394 ITR 449 (SC), where it was held: "Section 115O imposes an additional income tax on the company, not on the shareholder. It is a tax on the profits of the company which are distributed as dividends, and it is not a tax on the dividend income in the hands of the shareholder." (Para 15) 16. The above ruling of the Hon'ble Supreme Court applies squarely, as....