Tribunal held that ; if no deduction is claimed for an expenditure, there can be no question of disallowance . Once the department has issued certificate for non-deduction of tax at source, there can be no disallowance. Once it is held that income is not chargeable to tax in India, no disallowance (AY. 2004-05 to 2009-10)
Delhi Tourism & Transport Development Corp. Ltd. v. Dy. CIT (2018) 194 TTJ 305 /170 DTR 129(Delhi)(Trib.)
S. 40(a)(i) : Amounts not deductible – Deduction at source -Non-resident – Amount not claimed as expenditure- No disallowance can be made – Exemption certificate for non deduction of tax at source- Once certificate has been issued no disallowances can be made – If income is not chargeable to tax in India -No disallowance can be made- Once it is held that income is not chargeable to tax in India, no disallowance can be made. [ S.195 , 197 ]