9911796707
TMI Blog1990 (3) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner claimed exemption under section 10(15)(iv)(c) of the Income-tax Act, 1961 (for short "the Act"). The respondent held that in view of the proviso to sub-section (2) of section 195 of the Act, such a certificate could not be granted. The case of the petitioner is that it imported certain spin finish oil from Japan costing US $ 68850. One of the terms of repayment of the supply price was that the petitioner had to pay interest at the rate of 9.3125% on the value of imports. The Japanese supplier sent an invoice dated September 12, 1988, for the interest payable by the petitioner for a period of 166 days and amounting to US$2956.49. The due date for repayment of the supply price and the interest was March 10, 1989. According to the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, at the same time, on an application of the petitioner, directed that, on its depositing an amount of Rs. 1,50,000 with the Registrar of this court, the petitioner would be allowed to remit an amount equivalent to US$2956.49 to the foreign supplier without deducting or depositing any tax on the interest amount. It was also ordered that this exemption of tax would be subject to further orders of the court. This interim order was made as it was apprehended by the petitioner that since there was no tax liability and that if the amount was deposited with the Income-tax Department, it would be difficult for the petitioner to get back the amount and further, that there was no agent of the foreign supplier to claim this amount. We find there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or (c) a person who is a non-resident, where the interest is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such person in India;" It will, thus, at once be seen that the subject interest amount would be income which shall be deemed to accrue or arise in India. That being so, proviso to sub-section (2) of section 195 of the Act would make that subsection inapplicable in the case of the petitioner. The respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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