TaxTMI 
TaxTMI 
2019 (1) TMI 1453
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....e order u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 30.01.2015 passed by the DCIT, Circle - 2(1)(2), Ahmedabad with the following grounds: 1. "The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made on account of commission paid to foreign agents u/s. 40(a)(i) of the Act amounting to Rs. 43,57,703/-, without properly appreciating the facts of the case and the material brought on record. 2. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made u/s. 14A of the Act amounting to Rs. 26,64,827/-, without properly appreciating the facts of the case and the material brought on record. 3. On the facts and in the circumstances of the case....
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.... to the non-resident foreign agents without deducting the tax at source and therefore, by and under letter dated 24.12.2014 a show-cause was issued to the assessee as to why such commission paid to the non-resident foreign agents should not be disallowed invoking the provision of Section 195 of the Act. 4. In response to the said show-cause the assessee submitted that the provision of Section 195 of the Act does not apply in the instant case since the amount paid to the non-resident is not chargeable under the Provision of Income Tax Act as income of the payee. The assessee further relied upon the judgment of G. E. India Technology Centre Pvt. Ltd.-vs-CIT, 327 ITR 456 as passed by the Hon'ble Apex Court where it has been held that Sectio....
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....o the income u/s 40(a)(ia) of the Act against which appeal was preferred before the Learned CIT(A) who in turn deleted such addition made by the AO. Hence, the instant appeal before us. 5. At the time of hearing of the appeal, Learned Counsel appearing for the assessee submitted before us that the non-resident agents did not receive the commission in India and therefore the income do not fall under the category where TDS is liable to be deducted on such commission paid to the foreign agents. Further that the non-resident agents situated outside India and not carried out their business activity in India. There is no such business operation carried out by such foreign agents in India and thus the income does not accrue or arise in India. T....
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....oshoku Ltd., 125 ITR 525 that the non-resident since rendering services outside India, the commission earned by such non-resident for acting as an agent for Indian exporter would not accrue in India. In the case in hand the foreign agents are not residents of India and thus squarely covered by the said judgment passed by the Hon'ble Apex Court. Further that similar commission paid in earlier years by the assessee to the foreign agents in the similar set of facts and circumstances no disallowance made by the authorities below and therefore disallowance made by the Learned AO is not justified. In fact the order impugned clarified each and every aspect of the matter as discussed above does not call for any interference and therefore in the abs....
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....nal deposit from Directors has also been invested in the capital. During the year, cash accruals from the operations of the company aggregated to Rs. 12.54 crores has also been utilized for additional investment in the Partnership Firm during the year under consideration. Ultimately, no part of interest bearing funds have been utilized for this purpose and therefore the amount of interest is eligible under Rule 8D(ii) is NIL. It seems that no direct or indirect expenditure has been incurred by the firm in respect of investment in capital with partnership firm. In the absence of any expenditure incurred and debited to profit and loss account of the company in relation to investment in capital in partnership firm application of Rule 8D(iii) i....