Section 195 of Income tax Act, 1961—TDS— This appeal is filed by assessee against the order of CIT(A) wherein CIT (A) confirmed the order passed by the AO.

The assessee was setting up a new business abroad and it was a case, where the assessee was sought to create a new source of income outside India. Hence he submitted that the payment in question fell within the “exception” to Section 9(1)(vii)(b) of the Act and hence not taxable under the domestic law and hence no deduction of tax was made u/s 195 of the Act. Thus, he submits that the order passed u/s 201(1)/(1A) is bad in law.

Held that— we are of the considered opinion that the facts of the case leads us to a conclusion that the assessee gets benefits of the first explanation to Section 9(1)(vii)(b) of the Act as the technical services when not utilized for the business activities of production in India and it was for services which were utilized in the business carried out outside India.

we have no hesitation in holding that the services rendered by Mr. Firpo which were in Italy and not in India are not taxable in India under Income Tax Act, 1961 as the same has not accrued or arisen in India and hence, no tax need be deducted u/s 195 of the Act.[M/S. ELECTROSTEEL CASTING LTD. VERSUS ITO (INTERNATIONAL TAXATION) WARD, KOLKATA.][2019] 17 ITCD Online (49) [ITAT KOLKATA]