TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 715
X X X X Extracts X X X X
X X X X Extracts X X X X
....a)(ia) read with section 194H/194C of the I.T. Act, 1961. 2. On the facts and circumstances of the case the Ld. CIT(A) erred in law as well as on merits in deleting the disallowance of Rs. 33,67,000/- made by AO u/s. 40(a)(i) read with section 195 of the Income Tax Act. 3. The appellant craves to amend modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal." 3. The grounds raised in ITA No. 2276/Del/2012 (AY 2008-09) read as under:- "1. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition made by the AO u/s. 40(a)(ia) amounting to Rs. 17,28,04,843/-. 2. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition made by the AO u/s. 40(a)(i) amounting to Rs. 1,23,54,189/-. 3. The appellant craves to amend modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal." ITA NO. 1548/DEL/2011 (AY 2006-07) 4. Briefly stated the facts are that the assessee filed return declaring an income of Rupees NIL (after adjusting brought forward loss of Rs. 8,18,11,190) was filed electronically on 30.11.2006 which was processed u/s. 143(1) on 5.3.2008. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....firmed on this account, hence, we do not find any infirmity in the order of the Ld. CIT(A). Accordingly, we affirm the same and the Ground No. 1 raised by the Revenue stands rejected. 8. As regards Ground No. 2 relating to deletion of disallowance of Rs. 33,67,000/- made by the AO u/s. 40(a)(i) read with section 195 of the Income Tax Act on account of non-deduction of tax. We find that before the Ld. CIT(A) assessee has stated that without prejudice to the other arguments of the assessee, even if the discount offered is treated as a payment to the non-resident, it is a settled position of law that the commission paid to agents operating outside India cannot be taxed in India. He further submitted that the ruling of the Hon'ble Supreme Court of India in the case of CIT vs. Toshoku Limited (125 ITR 525) supports the position of the assessee in this regard. In the reported case, the tax payer appointed commission agents outside India to promote its export sales. On taxability of the commission received by the non-resident agents, the Hon'ble Supreme Court of India has held as follows: - Since the agents were outside India, the export proceeds received in India would not amou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dicially affect the right of the assessee to have his assessment made in accordance with the circular as it stood prior to its amendment or withdrawal. This proposition is supported by a Full Bench decision of the Kerala High Court in the case of B M Edward, India Sea Food (119 ITR 334) (Refer page no 130 of the case law index-The Supreme Court has dismissed the Special Leave Petition filed by the Revenue on this issue." 8.1 We find that the Assessing Officer on the other hand was of the opinion that while giving discount to the Collection Centres situated outside India, the assessee has made payments to foreign parties without deducting tax U/S 195. Further the Assessing Officer was of the view that the appellant should have obtained a nil deduction certificate from the Assessing Officer and because of its failure to do so he added an amount of Rs. 33,67,000/- for violation of section 195 read with section 40(a)(i). Ld. CIT(A) has considered the submission given by the assessee as well as objections of the Assessing Officer and observed that for any amount on which tax has to be deducted u/s 195, one of the basic conditions is that the, said amount should be taxable in India. Ld.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....peal as raised by the Revenue in the present appeal which are as under: 1. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition made by the AO u/s. 40(a)(ia) amounting to Rs. 17,28,04,843/-. 2. The Ld. CIT(A) erred in law and on facts of the case in deleting the addition made by the AO u/s. 40(a)(i) amounting to Rs. 1,23,54,189/- 3.1 In so far as the disallowance / addition as made by the AD u/ s 40(a)(ia) amounting to Rs. 17,28,04,843/ - is concerned it would be noticed that he first made disallowance by holding the payments as commission covered by section 194H as per which TDS was required to be done. Besides this Section the AO, in the alternative (see para 5 of order) held the payments to he covered by section 194C. 3.2 The CIT(A) following the Tribunal's order referred to above i.e. order dated 16-12-2011 for AY 06-07 in ITA No.434/2011 deleted the disallowance so made by the AO in so far as AO's findings about applicability of section 194H are concerned. In this connection, it would be noticed that the CIT(A) has failed to deal with the alternative course adopted by the AO whereby he found the payments to be covered even by section 194C a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gent relationship between the assessee and the collection centres and that being so, the provisions of sections 194H of the Act have wrongly invoked; (ii) the provisions of section 194H of the Act could, even otherwise, not have been met, since no payment has been shown to have been made by the assessee to the Collection Centres; (iii) The payment made to the assessee by Collection Centres was at the rates agreed to inter se between them; and (iv) the Ld. CIT(A) erred in confirming the disallowance of Rs. 11,78,24,030/- made u/s. 40(a)(ia) of the Act for the alleged failure of TDS by the assessee u/s. 194H of the Act. Ground No. 3 stated that the Ld. CIT(A) erred in not adjudicating the challenge of the assessee to the AO's findings that the discount offered by the assessee to the Collection Centres was in the nature of payment for work, on which tax was deductible u/s. 194C of the Act. Since the claim of the assessee has allowed as above, there remains no requirement to go into this aspect of the matter and we are not doing so. In the result, the appeal filed by the assessee is allowed." 11.1 Keeping in view of the above facts and circumstances, we are of the view that the....