VENUGOOPAL SUBRAMANYAM RAJA,KUMBAKONAM vs. DCIT CIRLE 2(1), TRICHY

ITA 2857/CHNY/2024Status: DisposedITAT Chennai21 August 2025AY 2010-11Bench: the Assessing Officer nor before the appellate fora. The appellant contested that the payment of interest falls under Article 11(1) of the DTAA with Switzerland.7 pages
AI SummaryDismissed

What did the Tribunal hold?

The tribunal dismissed the appeals for all three assessment years (2007-08, 2009-10, 2010-11). It upheld the disallowance, reaffirming that the interest payment was taxable in India at a rate not exceeding 10% under Article 11(1) and 11(2) of the DTAA between India and Switzerland. The tribunal concluded that the assessee was liable to deduct tax at source under Section 195, and its failure to do so attracted disallowance under Section 40(a)(i) of the Act, relying on its own previous order in the assessee's case for AY 2008-09.

What were the facts?

The assessee, a partner in M/s. Raja Holdings, paid interest to RBS Coutts Bank Ltd., Singapore (a foreign bank with its head office in Switzerland) without deducting Tax Deducted at Source (TDS). The Assessing Officer disallowed the interest expenditure under Section 40(a)(i) for non-deduction of tax under Section 195, treating the interest as income deemed to accrue or arise in India under Section 9(1)(v)(c). The assessee argued that Section 195 was not applicable as the transaction was between two non-residents and the foreign bank had no permanent establishment in India.

What were the issues?

Whether the assessee was liable to deduct tax at source under Section 195 of the Income Tax Act on interest paid to a non-resident foreign bank, and whether the disallowance of such interest expenditure under Section 40(a)(i) for non-deduction of TDS was justified, considering the Double Taxation Avoidance Agreement (DTAA) with Switzerland.

Which sections of the Income-tax Act were involved?

Section 9,Section 9(1)(v)(c),Section 40(a)(i),Section 195

AI-generated summary — verify with the full judgment below

Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha

Hearing: 20.08.2025Pronounced: 21.08.2025

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

These three appeals filed by the assessee are directed against separate orders all dated 09.09.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment years 2007-08, 2009-10 & 2010-11. 2. Since issues raised in these appeals are similar based on the same identical facts, wi

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 9

All 529 judgments and leading authorities on Section 9 →

Recent GST High Court judgments

Search GST case law →