DEPUTY COMMISSIONER OF INCOME TAX Vs. MAJESTIC AUTO LTD
LAWS(IT)-1994-8-14
INCOME TAX APPELLATE TRIBUNAL
Decided on August 31,1994

Appellant
VERSUS
Respondents

JUDGEMENT

J. Kathuria, Accountant Member - (1.) THIS appeal by the Revenue raises a ticklish issue. It appears that the assessee-company sought an income-tax clearance certificate from the Income-tax Officer. The Income-tax Officer, however, noticed that the assessee had paid a sum of Rs. 9,34,579 to Steyr Daimler-PUCIIAG (PUCH), Austria ("Puch" for short), which was chargeable to tax in India. He accordingly required the assessee-company to deduct the tax at source at. Rs. 2,80,400 on the aforesaid amount of Rs. 9,34,579. The assessee deposited the tax on 19-12-1986 but filed an appeal under Section 248 of the Income-tax Act ("the Act' for short). Since the direction on the basis of which the assessee-company paid tax at source was stated to be oral, a copy of such direction has not been filed before us.
(2.) The learned CIT (Appeals) admitted the appeal of the assessee. In fact, the entertainment of appeal was not the subject-matter of dispute by the Revenue. On merits, the learned CIT (Appeals) held that the payments made to Puch were only in respect of drawings and designs and not for services rendered in India. The learned CIT (Appeals) further held that payment in question was not in the nature of royalty and hence the assessee-company had no liability to deduct the tax at source under Section 195 of the Act. The Revenue has come up in appeal before us.
(3.) THE learned D.R. submitted that the payment made to Puch was chargeable to tax in India and hence there was an obligation on the assessee-company to deduct tax at source.;


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