S.195 TDS is deductible only on Taxable Portion

JUDGMENT 1999 Supp(1) SCR 504 The Judgment of the Court was delivered by SHAH, J. These appeals are filed by the Assesses against the judgment and order dated 2nd July, 1984 passed by the Andhra Pradesh High Court in deciding three income tax references partly in favour of the revenue. (Re: CIT v. Superintending Engineer, Upper Sileru, (1985) 152 ITR 753. The Court held that provisions of Section 195 relating to deduction of tax at source come into operation in respect of sums paid to a non-resident, whether or not such sum represents only income or profits if such sums are paid to non-residents during the course of regular trading operation. That finding is challenged in these appeals.Before deciding the question involved, we would refer to a few facts of the matter: –