The key points covered are: Non-deduction of TDS on export...

The key points covered are: Non-deduction of TDS on export commission paid to non-resident agents was held as correct since the services were rendered outside India and the income did not accrue or arise in India as per Section 9, hence TDS provisions u/s 195 were not attracted. The addition made u/s 14A for disallowance of expenditure related to exempt income was deleted as no borrowings were made for investments and no exempt income was earned. Reliance was placed on relevant judicial precedents. The disallowance of notional interest on advances given by the assessee was set aside, and the Assessing Officer was directed to ascertain the availability of own funds exceeding the advances to grant relief accordingly. The VAT penalty imposed on the assessee was held to be compensatory in nature, not penal, based on judicial precedents cited, and the addition was deleted. The disallowance of interest on application money paid and advances made was deleted as the funds were from the assessee's current account representing non-borrowed funds, following the principle laid down for the previous year. The addition of advances from the current account was remanded back to the Assessing Officer to verify the availability of funds exceeding the advances to grant relief as per law.