Case Law Details

Case Name : Utkal Investments Ltd. Vs ADIT (Int'l Taxation) [ITAT Mumbai 'L' Bench]
Appeal Number : ITA NO. 2891/Mum/2005
Date of Judgement/Order : 27/08/2008
Related Assessment Year :
Courts : All ITAT (4418) ITAT Mumbai (1458)

RELEVANT PARAGRAPH

5. Rival contentions heard. On a careful consideration of the facts of circumstances of the case and on perusal of the papers on record we hold as follows:

5.2 Here is a case where the foreign company was in receipt of some income from the assessee, on account of sale of shares of Revathi Equipment Ltd. A plain reading of this section leaves no doubt that the order of the Assessing Officer cannot be faulted with. The Act uses the words “from or through” instead of the word “through” in section 163(1)(c) of the Income-tax Act, 1922. Any person from or through whom the non-resident is in receipt of any income directly or indirectly can be treated as an agent of the non-resident. The sole requirement of section 163(1)(c) is that only the non-resident should receive income directly or indirectly from or through the person of India. Reliance placed by the learned counsel for the assessee on the decision of the Mumbai Bench of the Tribunal in the case of Nirlon Synthetic Fibres & Chemicals Ltd. (supra), in our considered opinion, does not come to his rescue for the reason that what is observed in that decision is that the first group of sections 160 to 163 an the second group of sections 195 to 201 are mutually exclusive and operate in different fields. In that case the Tribunal held that under section 195(1), when a person responsible for making payment to a non-resident shall at the time of payment, deduct tax at source at the rates in force unless he himself is liable to pay income-tax as an agent. The words `unless he himself is liable to pay income-tax as an agent’ indicates that he should have an existing liability to pay tax as an agent. The ratio laid down by the bench is that when a person is treated as an agent the tax liability is on him and for discharge of the same he need net deduct tax u/s 195. Once deduction of tax is made u/s195, the question of the assessee being himself liable to pay tax thereon as an agent, does not arise. During the impugned assessment year, the wording “unless he himself is liable to pay income-tax as an agent” is not present in section 195. Hence that case law does not apply to the impugned assessment year. Thus we apply the plain meaning of the section and confirm the order of the first appellate authority.

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Category : Income Tax (25484)
Type : Judiciary (10235)

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