Transmission Corporation of Andhra Pradesh v. CIT

239 ITR 587Supreme Court of India1999#357 most cited

What is Transmission Corporation of Andhra Pradesh v. CIT authority for?

The Supreme Court lays down principles for deducting tax at source (TDS) under Section 195 on payments to non-residents, including aspects of income deemed taxable in India and the application of Double Taxation Avoidance Agreements (DTAAs) under Section 90.

243

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2009 to 2026.

Also referred to as

Transmission Corporation of Andhra Pradesh v. CIT · 239 ITR 587 · Section 195 · withholding tax on non-residents · TDS payments to non-residents · Section 40(a)(i) disallowance · income deemed to accrue in India · Section 9(1) · Double Taxation Avoidance Agreement · Section 90 · business connection · fees for technical services

Sections most often in play

Section 195Section 37(1)Section 115JBSection 90Section 40(a)(i)Section 10AASection 143(3)Section 234B

Issues it is cited on

section 195(2)section 195(1)section 90(2)business connectionsection 195section 201(1a)section 201(1)section 40(a)(i)section 9(1)fees for technical servicespermanent establishmentsection 194

Judgments citing Transmission Corporation of Andhra Pradesh v. CIT

Biocon Research Limited, Bangalore vs. CIT(A) I, Bangalore

In the result, the appeal filed by the revenue is dismissed

ITA 1329/BANG/2016[2012-13]Status: DisposedITAT Bangalore18 Dec 2017AY 2012-13

Bench: Shri Vijay Pal Rao & Shri Inturi Rama Rao

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri R.N.Parbat, CIT(DR)
Section 10ASection 143(3)Section 14ASection 194CSection 40

…e concerned in these cases before us. Therefore, in our view, there are adequate safeguards in the Act which would prevent revenue leakage. Applicability of the judgment in the case of Transmission Corporation (supra) In Transmission Corporation’s case (1999) 239 ITR 587(SC) a nonresident had entered into a composite contract with the resident party making the payments. The said composite contract not only comprised supply of plant, machinery and equipment in India, but also comprised the installation and commissioning of the same in India. It was admitted that the erection and commissioning of plant and machiner…

DCIT, Bangalore vs. M/S Biocon Research Ltd., Bangalore

In the result, the appeal filed by the revenue is dismissed

ITA 1251/BANG/2016[2012-13]Status: DisposedITAT Bangalore18 Dec 2017AY 2012-13

Bench: Shri Vijay Pal Rao & Shri Inturi Rama Rao

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri R.N.Parbat, CIT(DR)
Section 10ASection 143(3)Section 14ASection 194CSection 40

…e concerned in these cases before us. Therefore, in our view, there are adequate safeguards in the Act which would prevent revenue leakage. Applicability of the judgment in the case of Transmission Corporation (supra) In Transmission Corporation’s case (1999) 239 ITR 587(SC) a nonresident had entered into a composite contract with the resident party making the payments. The said composite contract not only comprised supply of plant, machinery and equipment in India, but also comprised the installation and commissioning of the same in India. It was admitted that the erection and commissioning of plant and machiner…

DCIT, Bangalore vs. M/S Biocon Research Ltd., Bangalore

In the result, the appeal filed by the revenue is dismissed

ITA 1250/BANG/2016[2011-12]Status: DisposedITAT Bangalore18 Dec 2017AY 2011-12

Bench: Shri Vijay Pal Rao & Shri Inturi Rama Rao

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri R.N.Parbat, CIT(DR)
Section 10ASection 143(3)Section 14ASection 194CSection 40

…e concerned in these cases before us. Therefore, in our view, there are adequate safeguards in the Act which would prevent revenue leakage. Applicability of the judgment in the case of Transmission Corporation (supra) In Transmission Corporation’s case (1999) 239 ITR 587(SC) a nonresident had entered into a composite contract with the resident party making the payments. The said composite contract not only comprised supply of plant, machinery and equipment in India, but also comprised the installation and commissioning of the same in India. It was admitted that the erection and commissioning of plant and machiner…

Biocon Research Limited, Bangalore vs. CIT(A) I, Bangalore

In the result, the appeal filed by the revenue is dismissed

ITA 1229/BANG/2016[2011-12]Status: DisposedITAT Bangalore18 Dec 2017AY 2011-12

Bench: Shri Vijay Pal Rao & Shri Inturi Rama Rao

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri R.N.Parbat, CIT(DR)
Section 10ASection 143(3)Section 14ASection 194CSection 40

…e concerned in these cases before us. Therefore, in our view, there are adequate safeguards in the Act which would prevent revenue leakage. Applicability of the judgment in the case of Transmission Corporation (supra) In Transmission Corporation’s case (1999) 239 ITR 587(SC) a nonresident had entered into a composite contract with the resident party making the payments. The said composite contract not only comprised supply of plant, machinery and equipment in India, but also comprised the installation and commissioning of the same in India. It was admitted that the erection and commissioning of plant and machiner…

DCIT, Chennai vs. Chennai Petroleum Corporation Limited, Chennai

In the result, the appeal filed by the Revenue is dismissed

ITA 853/CHNY/2013[2006-07]Status: DisposedITAT Chennai07 Dec 2017AY 2006-07

Bench: Shri Abraham P.George & Shri George Mathan

For Appellant: Mr.R.Vijayaraghavan, AdvFor Respondent: Mr.Prabhu Mukunth Arun-
Section 143(3)Section 195Section 40

…M/s.Hardy Exploration & Production India (in short “M/s.HEPI”) u/s.195. It was a submission that in the course of the assessment, the AO following the decision of the Hon’ble Supreme Court in the case of M/s.Transmission Corporation of AP Ltd., reported in 239 ITR 587 had held that the ITA Nos.687 & 853/Mds/2013 :- 4 -: assessee was liable to deduct TDS u/s.195(1) in respect of the purchase price of crude oil purchased from M/s.HEPI. It was a submission that M/s.HEPI was the PE of foreign company and the assessee had purchased the crude oil from M/s.HEPI to an extent of Rs. Rs.95,07,58,118/-. The AO had dis…

Chennai Petroleum Corporation Ltd., Chennai vs. JCIT, Chennai

In the result, the appeal filed by the Revenue is dismissed

ITA 687/CHNY/2013[2006-07]Status: DisposedITAT Chennai07 Dec 2017AY 2006-07

Bench: Shri Abraham P.George & Shri George Mathan

For Appellant: Mr.R.Vijayaraghavan, AdvFor Respondent: Mr.Prabhu Mukunth Arun-
Section 143(3)Section 195Section 40

…M/s.Hardy Exploration & Production India (in short “M/s.HEPI”) u/s.195. It was a submission that in the course of the assessment, the AO following the decision of the Hon’ble Supreme Court in the case of M/s.Transmission Corporation of AP Ltd., reported in 239 ITR 587 had held that the ITA Nos.687 & 853/Mds/2013 :- 4 -: assessee was liable to deduct TDS u/s.195(1) in respect of the purchase price of crude oil purchased from M/s.HEPI. It was a submission that M/s.HEPI was the PE of foreign company and the assessee had purchased the crude oil from M/s.HEPI to an extent of Rs. Rs.95,07,58,118/-. The AO had dis…

DCIT, Bhubaneswar vs. M/S. Paradeep Phosphates Limited, Bhubaneswar

In the result, both appeals of the assessee and revenue are dismissed

ITA 331/CTK/2015[2008-09]Status: DisposedITAT Cuttack09 Nov 2017AY 2008-09
For Appellant: Shri B.K.Mahapatra, ARFor Respondent: Shri A.K.Mohapatra, CITDR
Section 142(1)Section 143(3)Section 144ASection 147Section 148Section 40

…f such default when is served with a demand notice in terms of section 201 of the Act." 3.2.1 The AO is of the opinion that the decision of the AP High Court in the case of Transmission Corporation of AP Ltd. v. CIT, which was approved by the Supreme Court in 239 ITR 587 (SC) is applicable and accordingly the assessee was liable to deduct tax u/s.195(1). In this case the AO considered that the person making payments to a non-resident cannot take a unilateral decision that the payments made by him are not sums chargeable to income tax, and therefore he cannot make such payments without deducting tax at source unle…

Paradeep Phosphates Limited, Bhubaneswar vs. ACIT, Bhubaneswar

In the result, both appeals of the assessee and revenue are dismissed

ITA 315/CTK/2015[2008-09]Status: DisposedITAT Cuttack09 Nov 2017AY 2008-09
For Appellant: Shri B.K.Mahapatra, ARFor Respondent: Shri A.K.Mohapatra, CITDR
Section 142(1)Section 143(3)Section 144ASection 147Section 148Section 40

…f such default when is served with a demand notice in terms of section 201 of the Act." 3.2.1 The AO is of the opinion that the decision of the AP High Court in the case of Transmission Corporation of AP Ltd. v. CIT, which was approved by the Supreme Court in 239 ITR 587 (SC) is applicable and accordingly the assessee was liable to deduct tax u/s.195(1). In this case the AO considered that the person making payments to a non-resident cannot take a unilateral decision that the payments made by him are not sums chargeable to income tax, and therefore he cannot make such payments without deducting tax at source unle…

ITO 28(2)(3), Navi Mumbai vs. Natraj Mohan Kanchan, Navi Mumbai

Appeal stands dismissed

ITA 824/MUM/2015[2011-12]Status: DisposedITAT Mumbai08 Nov 2017AY 2011-12

Bench: Shri Mahavir Singh, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No. 824/Mum/2015 (िनधा"रण वष" / Assessment Year: 2011-12) Income Tax Officer 28(2)(3) Natraj Mohan Kanchan 3Rd Floor, Tower No.6 (Prop. M/S Snk Trading & Exports) बनाम/ 336, Grohitam Building Vashi Railway Station Complex Vs. Plot No.14B, Sec-19 Vashi Vashi, Navi Mumbai – 400 703 Mumbai – 400 703 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Afjpk-4775-N (अपीलाथ" /Appellant) (""थ" / Respondent) :

For Appellant: Subodh L.Ratnaparkhi,Ld.ARFor Respondent: Suman Kumar, Ld.DR
Section 143(3)Section 195Section 40

…x at source under section 195 of the Income-Tax Act, 1961 in the tight of the decisions of the Supreme Court of India in the case of GE India Technology (P.) Ltd. v. CIT [2010] 327 ITR 156 (SC) and Transmission Corporation of AP Ltd. and another v. CIT [1999] 239 ITR 587 (SC) and the decision of the Madras High Court in CIT v. Chennai Metropolitan Water tax Cases Appeals Nos.500-501 of 2005, with a request for clarification as to whether the tax is to be deducted under sub-section (1) of section 195 on the whole sum being remitted to a non-resident or only the portion representing the sum chargeable to tax, parti…

Bharat Sanchar Nigam Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 920/DEL/2017[2009-10]Status: DisposedITAT Delhi25 Oct 2017AY 2009-10

Bench: : Shri Amit Shukla & Shri L.P. Sahu

Section 147Section 194HSection 250Section 271(1)(c)Section 40Section 9

…tax in India in hands of foreign service providers and since no application u/s 195(2) of the Act was filed by the appellant relying upon decision of Hon’ble Supreme Court in the case of ITA No. 920/Del./2017 35 Transmission Corporation of India reported in 239 ITR 587 (SC) it was held by the Ld. AO that the appellant had defaulted in not deducting tax u/s 195. As such, a consequential disallowance u/s 40(a)(i) of Rs.57,78,92,080/- was made. 14. Being aggrieved, the appellant approached Ld. CIT(A), however, the first appellate authority also did not find any merit in the claim so made. In this regard, it has be…

Swanston Multiplex Cinemas P.Ltd, Mumbai vs. Asst CIT Cir 11(1), Mumbai

The appeal of the assessee is partly allowed

ITA 1135/MUM/2015[2005-06]Status: DisposedITAT Mumbai03 Oct 2017AY 2005-06

Bench: Shri Joginder Singh & Shri G. Manjunathaassessment Year: 2005-06 Swanston Multiplex Cinemas Acit, Private Limited, Circle-11(1), बनाम/ 9Th Floor, Viraj Towers, W.E. R. No.467, Vs. Highway Next To Andheri Aayakar Bhavan, Flyover Andheri (East), M. K. Road, Mumai-400093 Mumbai-400020 ("नधा"रती/Assessee) (राज"व /Revenue) Pan No.:-Aafcs6295K

Section 139Section 142Section 143Section 143(1)Section 143(2)Section 147Section 148Section 40

…n India. The payer is bound to deduct tax at source only if the income is assessable in India. If income is not so assessable, there is no question of tax at source being deducted.—Transmission Corporation of A.P. Ltd. vs. CIT (1999) 155 CTR (SC) 489 : (1999) 239 ITR 587 (SC) and Vijay Ship Breaking Corpn. & Ors. vs. CIT (2008) 219 CTR (SC) 639 : (2008) 14 DTR (SC) 74 : (2009) 314 ITR 309 (SC) relied on; CIT vs. Cooper Engineering Ltd. (1968) 68 ITR 457 (Bom) impliedly approved. (Paras 7 & 8) Sec. 195 falls in Chapter XVII which deals with collection and recovery. Chapter XVII-B deals with deduction at source b…

ACIT, Chennai vs. Migatronic India Pvt Ltd., Chennai

In the result, the appeal of the Revenue is dismissed

ITA 850/CHNY/2017[2012-13]Status: DisposedITAT Chennai08 Aug 2017AY 2012-13

Bench: Shri A. Mohan Alankamony

For Appellant: Shri Swaminathan, CAFor Respondent: 12.06.2017
Section 143(1)Section 143(3)Section 195Section 195(2)Section 195(3)Section 250(6)Section 40Section 9Section 90

…y could have made an application before the Income-tax authorities for grant of certification U/s.195(3) of the Act. (iv) Reliance was placed in the decision of the Hon’ble Apex court in the case Transmission Corporation of Andhra Pradesh vs. CIT reported in 239 ITR 589, wherein it was held that a person making payment to non-resident is duty bound to file an application to the Income-tax authority U/s.195(2) of the Act. 5. However on appeal, the Ld.CIT(A) granted relief to the assessee by observing as under:- “4.2 ----------------------------------------------------------------- ------------------------------…

DCIT, Circle-1(1), Bhubaneswar vs. M/S. Paradeep Phosphates Limited, Bhubaneswar

In the result, appeal filed by the revenue is dismissed and that of

ITA 289/CTK/2014[2010-11]Status: DisposedITAT Cuttack04 Aug 2017AY 2010-11

Bench: S/Shri N.S Saini & Pavan Kumar Gadaleassessment Year : 2010-2011

For Appellant: Shri B.K.MohapatraFor Respondent: Shri Kunal Singh, CIT DR
Section 195Section 195(1)Section 195(2)Section 197Section 263Section 40Section 92

…. Barium Chemicals Ltd. (1988), 175 ITR 243 (AP), Agarwal Chambers of Commerce Ltd. v. Ganapati Rai Hiralal, (1958) 33 ITR 245 ITA No. 264/CT K/ 2015 Asse ssment Year : 20 10- 201 1 (SC), and decision in the case of Transmission Corpn. of A.P. Ltd. vs CIT, 239 ITR 587. Relying heavily on the decision in the case of AP State Electricity Board which was confirmed by the Supreme Court, the Assessing Officer stated that tax was deductible by the assessee u/s.195(1) on payment to non-resident in respect of import value of machinery & spares, raw materials etc., since no benefit of sections 95(2), 195(3), 197 was…

DCIT, Cir-4(1), Kolkata vs. M/S Goodricke Group Ltd, Kolkata

In the result, the appeal of the revenue is dismissed

ITA 971/KOL/2015[2007-2008]Status: DisposedITAT Kolkata04 Aug 2017AY 2007-2008

Bench: Hon’Ble Shri N.V. Vasudevan, Jm & Shri M.Balaganesh, Am ] I.T.A No. 971/Kol/2015 Assessment Year : 2007-08 Dcit, Circle-4(1), Kolkata -Vs- M/S Goodricke Group Ltd., Kolkata [Pan: Aabcg1614Q] (Appellant) (Respondent)

For Appellant: Shri Sallong Yadav, Addl. CIT DRFor Respondent: Shri P.N. Rajendram, FCA
Section 143(3)

…did not accrue in India and, therefore, there was no liability to deduct TDS on these payments. The contention of the assessee was examined by the ld AO. He observed that the Hon'ble Supreme Court in case of M/s. Transmission Corporation of India reported in 239 ITR 587 held that the moment there is a payment to a non-resident, there is an obligation on the payer to deduct tax at source u/s 195(1). The only way to escape the 4 5 M/s Goodricke Group Ltd A.Yr.2007-08 liability is for the payer to make an application to the Assessing Officer u/s 195(2) for non-deduction of for deduction at a lower rate. If the pay…

ITO (It), Kolkata vs. M/S. Electrosteel Casting Limited., Kolkata

In the result, the appeal of the revenue is dismissed

ITA 2249/KOL/2014[2011-2012]Status: DisposedITAT Kolkata07 Jul 2017AY 2011-2012

Bench: Hon’Ble Sri A.T.Varkey, Jm & Shri M.Balaganesh, Am ] I.T.A No. 2249/Kol/2014 Assessment Year : 2011-12 I.T.O. (International Taxation), -Vs.- M/S. Electrosteel Casting Ltd. Kolkata Kolkata [Pan : Aaace 4975 B] (Respondent) (Appellant) For The Appellant : None For The Respondent : Shri Ravi Tulsiyan, Fca Date Of Hearing : 14.06.2017. Date Of Pronouncement : 07.07.2017 Order

For Appellant: NoneFor Respondent: Shri Ravi Tulsiyan, FCA
Section 143(3)Section 195Section 201Section 5(2)Section 9(1)(i)

…at source, under section 195 of the Act, in respect of payment made to non-resident, on import of software. The judgment of the Karnataka High Court is largely based on the judgment of Supreme Court in the case of Transmission Corpn. of AP Ltd. v. CIT [1999] 239 ITR 587 / 105 Taxman 742 . However, the Karnataka High Court not followed the subsequent binding judgment of 14 15 M/s. Electrosteel Casting Ltd. A.Yr.2011-12 the Supreme Court in the case of Vijay Ship Breaking Corpn. v. CIT [2008] 175 Taxman 77/[2009] 314 ITR 309 wherein the Apex Court has categorically held that, the resident is not required to deduc…

DCIT, Chennai vs. Shriram Properties Pvt Limited, Chennai

In the result, the appeal of the Revenue is partly allowed for statistical purposes

ITA 2018/CHNY/2016[2011-12]Status: DisposedITAT Chennai06 Jun 2017AY 2011-12

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

For Appellant: Shri R. Sivaraman, AdvocateFor Respondent: 03.04.2017
Section 143(2)Section 143(3)Section 14ASection 195Section 250(6)Section 40Section 9(1)(vii)

…the arguments advanced by the Ld.AR by relying on explanation 2 to Section 9(1)(vii) of the Act, the decision in the cases, Gmp International GmbH dated 29.01.2010 reported in 188 taxmann 143 AAR, M/s. Transmission Corporation of Andhra Pradesh reported in 239 ITR 589 (SC) and the Indo US treaty. Thereafter he invoked the provisions of Section 40(a)(i) of the Act, and accordingly disallowed the claim of expenditure of Rs.25,89,854/-. On appeal the Ld.CIT(A) after examining the issue in detail deleted the addition made by the Ld.AO by observing as under:- “5.1.2 I have considered the findings given by the Asse…

M/S Hero Honda Motors Ltd, New Delhi vs. DCIT, New Delhi

In the result, appeal filed by the assessee is allowed

ITA 2148/DEL/2009[2004-05]Status: DisposedITAT Delhi02 Feb 2017AY 2004-05

Bench: Sh C.M.Garg & Shri Prashant Maharishihero Honda Motors Ltd, Dcit, 34, Basant Lok, Vasant Vihar, Circle-12(1), Vs. New Delhi New Delhi Pan:Aaacg0812J (Appellant) (Respondent)

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. AK Saroha, CIT DR
Section 143(3)Section 195Section 263Section 32Section 37(1)Section 40Section 9

…ies to the impugned order. Hero Honda Motors Ltd V DCIT 2148/del/2009 A Y 2004-05 Appeal Against Order u/s 263 of The ACT Page 6 of 34 vii. He further relied upon the decision of the Hon'ble Supreme Court in case of Transmission Corporation of AP Ltd Vs. CIT 239 ITR 587 and Toyota Motor Corporation Vs. CIT 306 ITR 52. viii. The ld DR further referred to the various paragraphs of the order of ld CIT to defend that order. 7. The ld AR in rejoinder submitted as under:- i. In the subsequent years the issue has been decided in favour of the assessee by the various stages of appellate authorities therefore it cannot b…

DCIT Cir 1, Kalyan vs. Indo Amines Ltd, Mumbai

In the result, Revenue’s appeals for assessment years 2010-11 &

ITA 3039/MUM/2015[2011-12]Status: DisposedITAT Mumbai18 Jan 2017AY 2011-12

Bench: Shri Jason P. Boaz & Shri Ram Lal Negi

For Appellant: Shri Premanand JFor Respondent: Shri M.N. Nandgaokar
Section 195Section 40Section 5(2)(b)

…that provisions of Sec. 195 are not applicable and consequently no disallowance u/s. 40(a)(i) could be made and while doing so the CIT(A) has failed to consider the ratio of the decision of the Supreme Court in the case of Transmission Corpn. of A.P. Vs. CIT 239 ITR 587.” 3.1 At the outset of the hearing the learned A.R. of the assessee submitted that in the assessee’s own case for A.Y. 2009-10, wherein similar/identical grounds were preferred, Revenue’s appeal was dismissed by a Coordinate Bench of the Tribunal vide its order in IT No. 3664/Mum/2013 dated 18.12.2005. It was prayed that since the issues in appea…

DCIT Cir 1, Kalyan vs. Indo Amines Ltd, Mumbai

In the result, Revenue’s appeals for assessment years 2010-11 &

ITA 3038/MUM/2015[2010-11]Status: DisposedITAT Mumbai18 Jan 2017AY 2010-11

Bench: Shri Jason P. Boaz & Shri Ram Lal Negi

For Appellant: Shri Premanand JFor Respondent: Shri M.N. Nandgaokar
Section 195Section 40Section 5(2)(b)

…that provisions of Sec. 195 are not applicable and consequently no disallowance u/s. 40(a)(i) could be made and while doing so the CIT(A) has failed to consider the ratio of the decision of the Supreme Court in the case of Transmission Corpn. of A.P. Vs. CIT 239 ITR 587.” 3.1 At the outset of the hearing the learned A.R. of the assessee submitted that in the assessee’s own case for A.Y. 2009-10, wherein similar/identical grounds were preferred, Revenue’s appeal was dismissed by a Coordinate Bench of the Tribunal vide its order in IT No. 3664/Mum/2013 dated 18.12.2005. It was prayed that since the issues in appea…

Asst CIT 16(3), Mumbai vs. D.A. Jhaveri, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 3758/MUM/2013[2008-09]Status: DisposedITAT Mumbai30 Nov 2016AY 2008-09

Bench: Shri G.S. Pannu & Shri Amarjit Singh: (A.Y : 2008-09)

For Appellant: Shri Hiro RaiFor Respondent: Shri Morya Pratap
Section 143(3)Section 40Section 40a

…has raised the following Grounds of appeal :- 2 M/s. D.A. Jhaveri “1. Whether on the facts and circumstances and in law, the Ld. CIT(A) has erred in deleting the disallowance u/s. 40a(ia) of Rs.22,95,152/- which is supported by the decision of Apex Court in 239 ITR 587 and followed in CIT(International Taxation) Vs. Samsung Electronic Co. Ltd. 320 ITR 209 (Karnataka). 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in allowing the additional depreciation claimed of Rs.18,26,347/-. 3. Whether on facts and circumstances of the case, the Ld. CIT(A) erred in not appreciating the fa…