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of <h1>Court Rules in Favor of Nirma Ltd: TDS on Vessel Damage Payment Set at 7.5% u/s 172.</h1> The case involves a dispute over tax liability under Section 195(2) of the Income Tax Act, 1961, for the Assessment Year 2018-19. The issue arose from a directive by the DCIT (Intl. Taxn.)-1 Ahmedabad to deduct TDS at 20% on a USD 450,000 payment to Titan Shipping Limited, Marshal Islands, for vessel damage charges. The revenue argued the payment was income under Section 5(2) without a DTAA. Nirma Limited contended for a 7.5% TDS under Section 172, citing Circular No. 723. The court ruled in favor of Nirma Limited, applying Section 172 and setting the TDS at 7.5%. This decision highlights the complexities in international taxation and the importance of precise legal interpretation.
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