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2016 (3) TMI 492 - AT - Income TaxAdditional evidences - relevancy of admission of additional evidences - determination of withholding tax under section 195 - DTAA - Held that - We are of the consdiered view that the additional evidences i.e. Tax Residency Certificate issued by the tax authorities of USA certifying that GX Technology Corporation is resident of USA for the purposes of taxation and Certificate dated 31.1.2006 issued by GX Technologies Corporation certifying that it is resident of USA in terms of Article 4 of the India US Double Taxation Avoidance Agreement (DTAA) and does not have Permanent Establishment in India in terms of Article 5 of the DTAA are very much essential evidences for deciding the issue in dipsute which require thorough examination at the level of the Assessing Officer. Therefore in the interest of justice as agreed by both the parties we accept the Application for admission of additional evidences filed by the assessee u/R 29 of the ITAT Rules 1963 and send back the issue in dispute to the file of the Assessing Officer for examination and verifying the aforesaid additional evidences and then decide the addition in dispute afresh in accordance with law after giving full opportunity to the assessee of being heard. - Decided in favour of assessee for statistical purposes.
Issues involved:
1. Disallowance under section 40(a)(i) for payments made to a company for geological data. 2. Withholding tax under section 195 on payments made for geological data. 3. Determination of whether payments constituted "income chargeable to tax in India." 4. Claim of exemption under Double Taxation Avoidance Agreement. 5. Denial of natural justice for not providing sufficient time to furnish tax residency certificate. Issue 1: The Assessee appealed against the order upholding the disallowance under section 40(a)(i) for payments made to a company for geological data. The Assessee argued that the payments were not chargeable to tax in India as per the Double Taxation Avoidance Agreement between India and the United States. The Tribunal accepted additional evidence, including a Tax Residency Certificate and a certificate from the company confirming its status, and sent the issue back to the Assessing Officer for further examination. Issue 2: The Assessee contested the withholding tax under section 195 on payments made for geological data. The Assessee provided crucial additional evidence, such as a Tax Residency Certificate and a certificate confirming the company's status, to support their claim that the payments were not liable to tax in India. The Tribunal acknowledged the importance of these evidences and decided to send the issue back to the Assessing Officer for thorough examination. Issue 3: The Assessee raised concerns about the determination of whether the payments for geological data constituted "income chargeable to tax in India." The Tribunal, after considering the additional evidence provided, decided to remand the issue to the Assessing Officer for a detailed examination to ensure a just decision in accordance with the law. Issue 4: The Assessee argued that the payments made for geological data were not chargeable to tax in India under the Double Taxation Avoidance Agreement. The Tribunal accepted the additional evidence submitted by the Assessee, including a Tax Residency Certificate and a certificate from the company, and directed the Assessing Officer to re-examine the issue to reach a fair decision. Issue 5: The Assessee alleged denial of natural justice for not being provided sufficient time to furnish the tax residency certificate. The Tribunal, after reviewing the contentions and additional evidence, agreed with the Assessee's claim and decided to send the matter back to the Assessing Officer for a comprehensive examination, ensuring the Assessee's right to be heard. In conclusion, the Tribunal allowed the Assessee's appeal for statistical purposes, highlighting the importance of providing a fair opportunity for presenting evidence and ensuring a just decision based on a thorough examination of all relevant aspects.
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