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TMI Blog2020 (4) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, ACCOUNTANT MEMBER The present Miscellaneous Petitions are filed by the assessee company praying that consolidated order passed by this Tribunal in ITA Nos.689/CHNY/2012 for assessment year 2009-2010 and ITA No.495/CHNY/2014 for assessment year 2010-2011 dated 20.03.2019 may be recalled, as the Tribunal had failed to adjudicate the following grounds of appeal and additional grounds of appeal filed before the Tribunal. ITA No.689/CHNY/2012 for assessment year 2009-2010 3. The Commissioner of Income tax (Appeals), LTU erred in confirming the disallowance of ₹ 6 1,23,06,054/- u/s 40(a)(i) as the appellant had not deducted TDS from the payments made to Hardy Exploration and Production India Inc (HEPI) u/s 195. 3.1 The Commissioner of Income tax (Appeals), LTU ought to have appreciated that payment made to HEPI was for the purchase of crude oil and hence payment is not subject to tax in India. 3.2 The Commissioner of Income tax (Appeals), LTU ought to have appreciated that Section 195 requires that tax is to be deducted at source from payment to a non-resident only if the amount is chargeable to tax 3.3 The Hon ble Supreme Court in G.E.Technolog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payee has paid the tax, the TDS cannot be recovered from the Assessee payer and hence the amount cannot be disallowed in the hands of the Assessee u/s 40(a)(i). 5. The CIT(A) erred in law in not applying the provisions of Non Discrimination as per article 26 (3) of the DTAA between India and USA, whereby, the payment by an Indian resident to a resident of USA should be allowed in computing the taxable income of the Indian payer as if such payments have been made to an Indian resident. As payments to an Indian Resident for purchase of oil does not require deduction of tax, payment to HEPI cannot be disallowed for non deduction of tax as per Article 26(3) of the DTAA. 6. The CIT(A) ought to have appreciated that as per article 26 (3) of the DTAA between India and USA which provides that allowability, in the hands of the resident Payer, of the amount paid to a Resident USA should be on the same conditions as if the payment was made to an Indian resident. Consequently the CIT(A) ought to have held that as per Proviso to section 40 (a) ( a) read with Proviso to sec 201 (1) and in the light of the decision of the Delhi High Court in the case of CIT Vs Ansal Land Mark Township ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 195 requires that tax is to be deducted at source from payment to a non-resident only if the amount is chargeable to tax. 6.3 The Hon ble Supreme Court in G.E.Technology Center vs. CIT (327 ITR 256) has held that that if there is no income chargeable to tax in India then there is no requirement for deducting tax at source under the Income Tax Act, 1961. 6.4 Without prejudice, under the DTAA between Japan and India only the profit accruing to MIs. NIKO (Neco) Ltd on production and sale of crude to the Appellant is taxable in India. Hence the entire payment cannot be disallowed u/s 40(a)(i). 6.5 Without prejudice disallowance u/s 40(a)(i) can be made only in respect of amounts outstanding and payable as on march and not the amounts which have been paid during the previous year. Merlyn Shipping and Transports V. ACIT, reported in 16 ITR (Trib) I (Vis)(SB). Vector Shipping 85 CCH 201 (All. H.C) 7.0 The Commissioner of Income tax (Appeals), LTU erred in confirming the disallowance of the provision of ₹ 17,00,05,000/- made for Retirement benefits of supervisory and non-supervisory employees as per DPE guidelines as being contingent liability and added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) ought to have held that, when the recipient M/s. Hardy Exploration and Production India Inc has paid the requisite tax taking into account the amount received from the Appellant, further disallowance of the same amount in the hands of the Appellant would amount to double taxation of that amount and hence the disallowance should be deleted. 4. The CIT(A) ought to have appreciated that that as per provisions of sec 191, once the payee has paid the tax, the TDS cannot be recovered from the Assessee payer and hence the amount cannot be disallowed in the hands of the Assessee u/s 40(a)(i). 5. The CIT(A) erred in law in not applying the provisions of Non Discrimination as per article 26 (3) of the DTAA between India and USA, whereby, the payment by an Indian resident to a resident of USA should be allowed in computing the taxable income of the Indian payer as if such payments have been made to an Indian resident. As payments to an Indian Resident for purchase of oil does not require deduction of tax, payment to HEPI cannot be disallowed for non deduction of tax as per Article 26(3) of the DTAA. 6. The CIT(A) ought to have appreciated that as per article 26 (3) of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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