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| The Tax Publishers2020 TaxPub(DT) 2377 (Ind-Trib) : (2020) 206 TTJ 0081 : (2020) 082 ITR (Trib) 0362 INCOME TAX ACT, 1961
Section 201 Section 201(1A) Section 195/9
Where 'business connection' was established payment on account of purchase of spare parts for Old Machines and Flour Milling Machine from a Non-Resident Supplier the transaction was to pass through section 195 and, therefore, assessee was rightly treated as on-in-default under section 201(1A) for non-witholding of TDS.
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Tax deduction at source - Under section 195 - Payment made without TDS to NRI supplier having sold machinery spares to assessee through Indian subsidiary -
Assessee made payment on account of purchase of spare parts for Old Machines and Flour Milling Machine from a Non-Resident Supplier. Buhler AG, Switzerland. AO took the view that profit element in sales made to Indian company was subject to the withholding tax under section 195 and assessee was one-in-default under section 201/201(1A) in respect of non-deduction of Tax at Source under section 195. Held: As non-resident supplier Buhler AG, Switzerland had carried out transaction of sale of goods to assessee company through its subsidiary/group company BIPL, Bangalore 'business connection' was established and therefore section 9 dealing with 'Income deemed to accrue or arise in India' came into operation and thus the transaction was to pass through section 195. Accordingly, assessee was rightly treated as on-in-default under section 201(1A).
Distinguished:Hind Energy and Coal Benefication (India) Ltd. v. ITO 2019 TaxPub(DT) 7216 (Ind-Trib).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2015-16 & 2016-2017
IN THE ITAT, INDORE BENCH
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