TaxTMI 
TaxTMI 
2017 (11) TMI 1844
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....as under :- 2.1 The assessee, a company engaged in the manufacture, trading, servicing and maintenance of food processing machines, filed its return of income for the Assessment Year 2010-11 on 14.10.2010 declaring total income of Rs. 28,83,00,988. On 28.3.2012, the assessee filed a revised return declaring income of Rs. 28,15,14,861. The return was processed under Section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. In the year under consideration the assessee had made payment of Rs. 23,04,348 to M/s. Ameejee Valleejee & Sons Pvt. Ltd (in short 'A V & Sons'), a foreign company, towards commission for services it rendered the assessee in Pakistan for (a) marketing th....
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....vity of agency services by 'A V & Sons' were rendered by A V &Sons in the territory of Pakistan and payments were made outside India, therefore the said commission payments to 'A V & Sons' cannot be said to be taxable in India. It is contended that since no income accrues or arises in India or is deemed to accrue or arise in India in terms of Section 5 r.w.s. 9(1)(i) of the Act, the aforesaid commission payments to 'A V & Sons' is not subject to the provisions for withholding tax thereon. In support of the assessee's contentions, the learned Authorised Representative placed reliance on the following decisions of the co-ordinate bench of this Tribunal :- i) Exotic Fruits (P.) Ltd. Vs. ITO (I.T) (2013) 40 taxmann.com 348 (Bangalo....
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....e rival contentions, perused and carefully considered the material on record; including the judicial pronouncements cited / relied on. The basic facts not disputed by authorities below are that the assessee in the case on hand, in the year under consideration, had made payments amounting to Rs. 23,04,348 to 'A V & Sons' a non-resident company towards commission for services it rendered the assessee in Pakistan for (a) marketing the assessee's products in Pakistan and (b) procuring orders from prospective customers in Pakistan and had not deducted tax at source thereon. We find that the facts of the case on hand and the issues considered are similar to those that were before the co-ordinate benches of this Tribunal in the case of Exotic ....
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.... "7. In respect of TDS requirement and applicability of section 40a(i), we consider the applicability of the tribunal order rendered in the case of M/s Exotic Fruits Pvt. Ltd. vs. ITO (Supra). The assessment years involved in that case were 2008 - 09 to 2010 - 11. In Para 7.7 of that tribunal order, it was noted that the income of non residents by way of commission cannot be considered as accrued or arisen or deemed to accrue or arise in India as the services of such agents were rendered/utilized outside India and the commission was also paid outside India. In the present case also, in Para 4.7, it is noted by DRP that no doubt, the AE rendered services abroad and also noted that the AE rendered services abroad in the form of placin....
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....ax in India. Therefore, the assessee was not obliged to effect any deduction of tax on the commission payment to the agent 'A V & Sons', who is stationed outside India. We, therefore, reverse the findings of the authorities below in this regard and allow the grounds raised in the appeal by the assessee. 4. In the result, the assessee's appeal for Assessment Year 2010-11 is allowed. Order pronounced in the open court on the 17th day of Nov.,2017. ============= Document 1 199 1. 2. (11) 3. 5. 6. 7. General The order of the learned CIT(A), in so far as it is prejudicial to the interests of the Appellant, is based on incorrect appreciation of facts and interpretation of law and is, therefore, bad ....