Case Law Details
Tata AIG General Insurance Company Limited Vs DCIT (ITAT Mumbai)
Facts- The assessee, being a general insurance company, is challenging the disallowance of re-insurance premium paid to non-resident reinsurers, who do not have a place of business / branch in India, u/s.37(1) of the Act. The alternative disallowance that was made by the ld. AO in this regard was u/s.40(a)(i) of the Act for payments made without deduction of tax at source.
Conclusion- We would like to reiterate the fact that there is absolutely no dispute that the foreign reinsurers does not have any place of business in India / permanent establishment in India / branch established in India / Liaison office in India. Hence, any payment made by the assessee company to such foreign insurers would not be chargeable to tax in the hands of the foreign reinsurers in India in terms of Section 195(1) of the Act. Accordingly, as stated earlier, there would be no obligation on the part of the assessee, being a payer, to deduct tax at source and consequently there cannot be any disallowance u/s.40(a)(i) of the Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal in ITA No.1718/Mum/2020 for A.Y.2015-16 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-15, Mumbai in appeal No. CIT(A)-15, Mumbai/10628/2019-20 dated 28/02/2020 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 31/12/2018 by the ld. Dy. Commissioner of Income Tax-8(3)(1), Mumbai (hereinafter referred to as ld. AO).
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