Ge India Technology Cen.P.Ltd vs Commr.Of I.T.& Anr

The Supreme Court held that the obligation to deduct tax at source (TAS) under Section 195 of the Income Tax Act, 1961 arises only when the payment made to a non-resident constitutes income chargeable to tax in India. The Court clarified that mere remittance does not automatically trigger the TAS obligation; rather, the nature of the payment must be assessed to determine if it qualifies as 'royalty' or other taxable income. The High Court's ruling was set aside, affirming the ITAT's decision that the payments made by the appellants did not constitute taxable income in India, thus not necessitating TAS deduction.