Compensatory payments to foreign companies not having PE in India not liable for TDS U/s. 195

SAS Institute (India) Pvt. Ltd. Vs ACIT (ITAT Mumbai) Conclusion: Compensation received by foreign companies from assessee for loss of business/profit would constitute business receipts in the hands of foreign companies but the same was not liable for TDS under section 195 as the foreign companies did not have permanent establishment in India. Held: Assessee had made certain payment to the foreign companies in the form of “compensatory payment” as per agreement entered by its parent company. Since the assessee had supplied software products beyond its territory, the business and profits o...