TaxTMI 
TaxTMI 
2014 (6) TMI 290
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....9;, Lucknow in ITA No.190/Lko/2012 relating to assessment year 2008-09. The department has preferred the appeal on following questions of law:- "(1) Whether the Hon'ble Income tax Appellate Tribunal has erred in deleting the disallowance of Rs.1,50,20,871/- on account of non-deduction of income tax as per provisions of Section 195 of the Income Tax Act, 1961? (2) Whether the Hon'ble Income Tax Appellate Tribunal has erred in law in deleting the disallowance of Rs.1,50,20,871/- without appreciating the facts that the provisions of section 9 (1) (vii), read alongwith the explanation introduced by Finance Act, 2010 wit....
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....ficient material by way of written submissions of the assessee, who had stated in his reply on 20.12.2010 that the assessee is engaged in business of manufacture and export of finished leather, shoe upper and leather products. The assessee's main business being export business it has to take the service of foreign agents, who secure export orders and help in execution of such business. For the services rendered by the foreign agents, they are paid commission in foreign exchange by remitting the amount through bank. We find that the CIT (A) has considered the alleged admission in the reply of the assessee and has also perused the agreement from which he found that there was nothing, which could demonstrate that these agents were appoint....
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....ign agents that the foreign agents did not have any branch or PE in India further supports the case of the appellant. 5.3.3 The A.O.'s observation that as a selling agent, the agent has to have managerial acumen and, therefore, hit by the provisions of Section 9 (1) (vii), is baseless. The provisions of Section 9 (1) (vii) deals with fees for technical services and it has to be read in that context. For that matter, everything in life requires managerial skills, like running the household, being an Assessing Officer, running a shop etc. Will that tantamount to providing managerial services in the context of Section 9 (1) (vii)? The answer is clear NO. Thus, the aforesaid payments d....