By K. B. Bhujle, Advocate
34 Ingram Micro Inc. vs. ITO(IT)
[2022] 444 ITR 568 (Bom.)
Date of order: 26th February, 2022
S. 195 of ITA, 1961
TDS — Payment to non-resident — Assessee not person responsible for making payment to non-resident — No obligation to deduct tax at sourceThe assessee was a company incorporated in the USA and was engaged in the business of distribution of technology products. The assessee had worldwide operations. IMAHI, a company incorporated in the USA, and a subsidiary of the assessee, held indirectly a wholly owned subsidiary in India, IMIPL. In 2004, IMAHI acquired the shares of THL, a company incorporated in Bermuda, from its existing shareholders. The assessee’s role in this transaction was that it guaranteed the payment of the sale consideration by IMAHI under the share purchase agreement to the sellers, i.e., the existing shareholders of THL. The guarantee never came to be invoked because IMAHI discharged its obligation under the share purchase agreement to the sellers, and accordingly, the assessee stood discharged of its obligations as a guarantor under the share purchase agreement. The Assessing Officer initiated proceedings u/s 201 of the Income-tax Act, 1961 to treat the assessee as an assessee-in-default for failure to deduct tax on the payment for the purchase of shares of THL.
The Bombay High Court allowed the writ petition filed by the assessee challenging the said proceedings and held as under:
