Assessee entered into an agreement with one with Davy Mckee Corporation (DAVY) \u00a0a foreign company, as per which assessee was to receive services in relation to projects outside India.\u00a0 It was also agreed that if any withholding tax was required to be deducted, it would be borne by assessee and DAVY would be paid net amount.\u00a0 Accordingly, assessee sought for a NOC to facilitate remittance to DAVY claiming that technical services were rendered outside India and fees was also paid outside India in foreign currency, hence income embedded in said fees accrued and arose to DAVY outside India. The\u00a0 Assessing Officer held that amount payable by assessee was taxable in India and NOC would be issued only if assessee deposited 30 per cent of amount to be remitted to DAVY The assessee paid withholding tax on payment made to DAVY under protest. Later, High Court confirmed that amount paid to DAVY was not chargeable to tax in India.(Grasim Industries Ltd v. S.M Mishra (2011) 332 ITR 276 (Bom)(HC))\u00a0 The\u00a0 Assessing Officer refused to refund withholding tax to assessee on ground that same was deposited by assessee on behalf of DAVY.\u00a0\u00a0 For past 13 years neither Kvaerner\u00a0 successor-in-interest of DAVY) nor DAVY had claimed any amount from revenue\u00a0\u00a0 Kvaerner\u00a0\u00a0\u00a0 had also addressed its ‘no objection’ conveying that amount could be refunded to assessee. Allowing the petition the Court held that\u00a0 even though amount deposited by assessee would be called as ‘tax deductible at source’ but what assessee actually paid was ‘an ad hoc amount not technically a TDS amount’, revenue’s insistence on assessee paying that amount was not in accourdance with law and amount so paid over must be refunded to assessee. Court also observe that section 248 of the Act, amended by the Finance Bill, 2007 (2007) 289\u00a0 ITR 122 (St), envisages and deals with a situation where a refund could be made to the person by whom the income was\u00a0 payable and who has borne the withholding tax.\u00a0 (Procedure for refunds)\u00a0\u00a0\u00a0 Circular No. 769, dated 6-8-1998 (1998) 232 ITR 25(St)), Circular No. 790, dated 20-4-2000 (2000) 243 ITR\u00a0 58 (St) and Circular No. 7 of 2007, dated 23-10-2007(2007) 294 ITR 1(St).\u00a0 Referred, Balmukund Acharya\u00a0 v.\u00a0 Dy. CIT (2009) 310 ITR 310(Bom)(HC), Nirmala L. Mehta\u00a0 v. A. Balasubramanian, CIT (2004) 269 ITR 1 (Bom)(HC), CIT v. Shelly Products\u00a0 (2003) 261 ITR 367 (SC).\u00a0\u00a0\u00a0 (AY. 1990-91, 1991-92)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 199 : Deduction at source-Credit for tax deducted-Refund of tax deducted at source-Amount wrongly deducted to be refunded if person receiving payment is not claiming credit-Amount to be refunded with interest.[S. 115A,195,195A, 248, Art.226, 265] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-39515","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-ahl","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/39515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=39515"}],"version-history":[{"count":2,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/39515\/revisions"}],"predecessor-version":[{"id":42667,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/39515\/revisions\/42667"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=39515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=39515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=39515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}