TaxTMI 
TaxTMI 
2018 (6) TMI 1724
X X X X Extracts X X X X
X X X X Extracts X X X X
....(i) for non-deduction of TDS. 2. The appellant craves to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2. The brief facts of the case are that the assessee has filed the return of income declaring income of Rs. 3,22,74,970/- on 30.9.2011. The case of the assessee was processed u/s. 143(1) of the Income Tax Act, 1961 24.9.2013. Later on, the case of the assessee was selected for scrutiny under CASS and notice u/s. 143(2) of the I.T. Act was sent on 20.9.2012. Again notice u/s. 143(2) of the Act alongwith questionnaire u/s. 142(1) of the Act was sent on 05.07.2013. In response to the same, the A.R. of the Assessee appeared from time to time and submitted the requisite d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n also obtain certificates for non deduction or lower deduction of tax as required u/s. 195 of the Act. As a result, the expenditure on export commission and other related charges payable to a non-resident for services rendered outside India is not allowable expenditure and accordingly, an amount of Rs. 50,63,797/- was disallowed u/s. 40(a)(i) of the Act and added to the total income of the assessee and income of the assessee was assessed u/s. 143(3) of the Act at total income of Rs. 3,73,38,770/- vide order dated 17.01.2014. 3. Against the aforesaid assessment order, the assessee appealed before the Ld. CIT(A)-XII, New Delhi, who vide its impugned order dated 28.05.2014 has allowed the appeal of the assessee and deleted the addition in di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at any of the non- resident agents have a Permanent Establishment (PE) in India. 6.1 Ld. Counsel of the Assessee further submitted that under the aforesaid undisputed facts the assesseee's claim i.e. payment of commission to non-residents does not require any tax withholding and consequently there cannot be any disallowance u/s. 40a(i) of the Act. In support of this contention, he relied upon the following cases laws:- i) Decision of the Coordinate Bench of ITAT in the case of DCIT (International Taxation), Ahmedabad vs. Welspun Corporation Ltd. (2017) 77 taxmann.com 165. ii) Decision of Hon'ble Jurisdictional High Court (Allahabad High Court) in the case of CIT vs. Model Exims (2014) 363 ITR 66 (All.) iii) Decision of the Hon'ble S....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... note that Ld. CIT(A)-XII, New Delhi vide his order dated 12.6.2012 in the assessment year 2009-10 has discussed the issue in dispute elaborately at page no. 8 to 9. For the sake of convenience, we are reproducing hereunder the relevant findings of the Ld. CIT(A) for the assessment year 2009-10 as under:- "I have perused the facts stated in the assessment order as well as assessee's reply. The assessee in his submission has stated that the Assessing Officer has taken the commission payment under the term "fees for Technical Services" and as per Explanation 2 to section 9(1)(vii) of the Act has held that the payment made by the assessee company to the overseas agents is the income accrue/arises to them in India and hence the assessee compa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ered outside India. The taxpayer had not deducted tax on these payments on the ground that the overseas agents operated in their own country and no part of their income had accrued in India". Keeping in view of the above facts and following the case laws cited above, I am of the opinion that the assessee company is not liable to deduct tax at source. Hence, the appeal is allowed on these grounds. In result the appeal of the assessee is allowed." 7.1 After perusing the aforesaid finding of the Ld. CIT(A) for the assessment year 2009-10 in assessee's own case, we find that the issue involved in the assessment year i.e. 2011-12 is squarely covered by the Ld. CIT(A)'s order dated 12.6.2012 passed in assessment year 2009-10 in assessee's....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt and would not fall within the definition of "fees for technical services" and, therefore, section 9 was not applicable and, consequently, section 195 did not come into play. Therefore, the disallowance made by the AO towards export commission paid by the assessee to the non-resident was rightly deleted. iii) Hon'ble Allahabad High Court in the case of CIT vs. Model Exims (2014) 363 ITR 66 (All.) has observed (Heads Notes) that Business Expenditure - Disallowance -Payments to non-resident - Failure to deduct tax at source - Assessee's agents had their own offices in foreign country - Agreement for procuring orders not involving any managerial services - Explanation to Section (2) not applicable - No disallowance of commission payments c....