AI Drafter 
TaxTMI 
TaxTMI 
2016 (9) TMI 990
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....d. vs CIT 327 ITR 456 (SC) as the facts of this case are different from the present case and is not relevant to the instant case since in the case of GE India Technology, the issue was taxing the payment which constituted royalty and in the present case, the issue is taxing the commission. 3. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition u/s 41 (1) of Rs. 2,06,93,996/- without appreciating the fact that the onus of proving the genuineness of the same was with the assessee during the course of the assessment proceedings, which the assessee failed to do so. 4. For the above mentioned reason and any other reasons that may be urged at the time of hearing, it is requested that the order of the CIT(A) be quashed and that of the A.O. be restored. 5. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 2. The brief facts of the case are that the assessee filed return of income on 29.10.2005 declaring total income of Rs. 41,89,968/-. Subsequently the return was revised on 12.01.2006 declaring total income of Rs. 43,37,321/-. The return was revised t....
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.... decision of Hon'ble Supreme Court in the case of GE India Technology Centre Pvt. Ltd. vs. CIT 327 ITR 456 (SC) pronounced on 09.09.2010, wherein it was held that tax is required to be deducted at source only when the sum payable to non-resident is chargeable to tax. I have perused the said order in case of GE India Technology Centre Pvt. Ltd. (supra) and find that the Hon'ble Supreme Court has distinguished the case of Transmission Corporation (supra) observing that in the said case, a non-resident had entered into a composite contract wherein it was clear even to the payer that payments required to be made by him to the non-resident included an element of income which was exigible to tax in India, and the only issue raised in that case was whether TOS was applicable only to pure income payments and not to composite payments which had an element of income embedded or incorporated in them. Therefore, it was held in said case that the tax was to be deducted on gross amount if such payment included in it an amount which was exigible to tax in India. It was held that if the payer wanted to deduct tax at source not on gross amount out on the lesser amount, then it was necessary....
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....onresident agent is chargeable to tax In India, In the said circular, attention was also drawn to earlier Circular No.23 dated 23.07.l969 wherein the taxability of Foreign Agents of Indian Exporters' was considered, and It was clarified then that where the non-resident agent operates outside the country, no part of his income arises in India; and further since the payment is usually remitted directly abroad, it cannot be held to have been received by or on behalf of agent in India. Such payments were therefore held to be not taxable in India. The appellant, as stated in written submissions, seems to believe that the said party operated their business activity outside India; commission was to be paid in relation to the services provided outside India, commission was to be remitted to them directly outside India, and the said party did not have any permanent establishment in India. On such a belief, the appellant did not make any application u/s 195(2) to the AO, which cannot be sufficient ground to assume that the appellant was responsible to deduct tax at source u/s 195( 1) of the Act. In fact, the AO has not gone into the question of deductibility of tax at source on such paym....
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....to what should be the portion so taxable or the amount of tax to be deducted and in case where a person responsible for deduction is fairly certain then in that eventuality he can make his own determination as to whether the tax was deductible at source and if so, what should be the amount thereof. Considering the facts of the present case the applicability of section 195(2)of the I.T. Act is not made out. Therefore, there was no requirement for the assessee to make application to the AO for non deduction of TDS. Since all those facts have already been considered by CIT(A) while passing impugned order. No new circumstances have been brought on record before us in order to controvert or rebut the findings recorded by the learned CIT (A). Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recoded by the learned CIT (A) are judicious and are well reasoned. Accordingly, we uphold the same. Resultantly, this ground raised by the Revenue stands dismissed. Ground No.3 The said ground relates to deleting the addition u/s 41(1) of Rs. 2,06,93,996/- on the ground that the onu....
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....f foreign commission payable submitted by the appellant that the amounts pertaining to prior to 01.04.2004 (i.e. the beginning of relevant. financial year 2004-05) was in respect of Foreign Exp. Comm. - Sri Lanka (Rs.l2,09,802/-), South Africa (Rs.20,12,161/-), and Morocco (Rs.28,81,363/-), aggregating to Rs. 61,03,3261- only. This shows that a substantial portion of the outstanding amount of Rs. 2,06,93,9961- was out of the provision made for F. Y. 2004-05 under consideration, and therefore, the AO's contention that the whole commission was outstanding for last so many years does not seem to be correct. The appellant has also submitted the reasons of withholding the payments to the said party PO SINAR, who was a commission agent assisting the appellant in procuring export orders. follow-up for export realization of payments, and the said commission was to be paid only. after the payment from respective buyers was made and any issues were settled, I find the contention of appellant is not out of context as it is not uncommon to withhold payments to commission agents pending settlement of dues from corresponding buyers. It also seems to be an undisputed fact that the sa....