9911796707
TMI Blog2014 (2) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee is regarding treating the assessee in default u/s 201 and consequential levy of interest u/s 201(1A) for non deduction of tax at source. The facts in brief are that the AO during the assessment proceedings noted that the assessee had remitted a sum of Rs. 122.65 lakh to Overseas Ship Building Corporation Centre as payment for consulting fees relating to consultation and supervision. The assessee had undertaken a project to establish a modern ship breaking yard at Pipavav Port Ltd. in the state of Gujarat in the name of Pipavav Ship dismantling & engineering Co. Ltd. The name of the company later on had been changed to Pipavav Shipyard Ltd. The assessee had taken financial assistance from Japan Bank for International cooperat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee had neither made the payment nor had any expenditure been claimed. It was thus argued that no tax was required to be deducted. The assessee placed reliance on the judgments of Hon'ble High Court of Bombay in case Pfizer Corporation (2003) ITR 391 in which it was held that right to receive income arises to the non-resident only after the regulatory approvals were received. It was also submitted that M/s Overseas Shipbuilding Cooperation Centre was not liable for taxation in India in respect of the consulting fees and, therefore, the same being not liable to be taxed. Reliance was placed on the several judgments. It was also submitted that the order u/s 201 had been passed on 27-01-2010 whereas the due date of TDS was 31-5-2005 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding treating the assessee in default u/s 201 (1) and consequential levy of interest u/s 201 (1A) for failure to deduct TDS in respect of amounts payable to M/s Overseas Shipbuilding Cooperation Centre in connection with consultancy work. The actual payment of the amount was dependent on certain regulatory compliances and approvals which were ultimately not received. The payment had also not been made. Therefore in such a situation no income on account of such payment could said to have been accrued to the non resident. The assessee had neither made the payment nor had claimed any revenue expenditure. Therefore only on the basis of entry in the books of accounts, the assessee could not be held liable for deduction of tax at source when ul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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