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TMI Blog2019 (3) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is taken by the assessee for the first time in this misc. petition. The only plea taken by the assessee in the proceeding u/s 201(1A) was that Panduit International Corporation suffered losses and they had included the receipts from the assessee in the return of income and, therefore, no disallowance can be made u/s 40(a)(ia) because ultimately no tax are payable and there is no loss to the Revenue. This is clear from the assessee’s submission made before the CIT(A) which is extracted in paragraph 4B of CIT’s common order dated 29/4/2016. It is not open to assessee to improve its case through Misc. Petition. Apart from the above, we are of the view that the averments put forth in the Misc. Petition do not give raise to mistake appa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anch office in Bengaluru and the supplies made to the Assessee were through this branch office. This branch office of Panduit Corporation constituted its Permanent Establishment (PE' for short) in India. The AO further observed that the Assessee had made payments to the branch office of Panduit Corporation and therefore the Assessee ought to have deducted tax at source u/s.195 of the Income Tax Act, 1961 (Act). The AO therefore issued notice dated October 9, 2015 under section 201(1) and 201(1A) of the Income-tax Act, 1961 (Act' for short) to show cause why the Assessee should not be treated as an assessee in default' for nondeduction of taxes on the payments made to the PE of the foreign company. The Assessee filed its reply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery of taxes and interest for delay does not arise. And erred in levying /confirming the interest u/s 201(1A) of the Act. The action of the authorities below being contrary to the facts and circumstances of the case and the law applicable is to be negated. 5. It has further been contended that the payments made by it to Panduit Corporation was towards the supply of goods and equipment and that it is a settled principle that tax deduction at source is not required to be made on remittances made towards purchase/supply of goods. The contention of the Assessee is that the remittances made by it towards purchase of goods and equipment from Panduit Corporation being supply of goods, no taxes are required to be withheld under the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Madras High Court in the case of CIT Vs. Chennai Metropolitan Water Supply and Sewerage Board, 348 ITR 530 (Mad). 5. We have given a careful consideration to the rival submissions. The plea with regard to the payment in question being for purchase of tools and consequently there would be liability to deduct tax at source on payment made is a plea which is taken by the assesee for the first time in this misc. petition. The only plea taken by the assessee in the proceeding u/s 201(1A) of the Act was that Panduit International Corporation suffered losses and they had included the receipts from the assessee in the return of income and, therefore, no disallowance can be made u/s 40A(ia) of the Act because ultimately no tax are payab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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