No Disallowance under s. 40(a)(i) when no TDS deducted under s. 195 deducted since payments were made merely towards testing fees and no transfer of technology was involved.

Dear All,

Please find attached the decision of the Hon’ble Ahemdabad ITAT  in a recent decision in the case of Anjani Synthetics Ltd. V/s DCIT – Ahemdabad  held that “merely payment of testing charges to a swiss based entity without deduction of TDS under s. 195 will not attract disallowance under s. 40(a)(i)  since the payments made were only towards testing charges and did not involve any transfer of technology.

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Source – Taxman