TaxTMI 
TaxTMI 
TaxTMI 
2020 (11) TMI 372
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....ssion of Rs. 8,06,155/- outside India for promotion of export sales outside India is subject to tax withholding u/s. 195. 2. That on the facts and circumstances of the case and in the law, the lower authorities have grossly erred in confirming disallowance of Rs. 8,06,155/- on account of agency commission u/s. 40(a)(i) on the same premise that it was subject to the requirement of tax withholding u/s. 195. 3. That on the facts and circumstances of the case and in the assessee's claim of allowability of foreign agency commission without any requirement of tax withholding u/s. 195 is squarely covered by the order of the division bench of ITAT in assessee's own case for ASSESSMENT YEAR 2011-12 in ITA no. 4395/Del/2014 dated 27.6.2018. Tha....
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....ghtly deleted the addition in dispute by following the various case laws as well as following the Ld. CIT(A)-XII, New Delhi Order dated 12.6.2012 passed in assessment year 2009-10. We also 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 Explana....
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....to determine whether the income could be deemed to accrue or arise in India, section 9 of the Act is the basis. The taxpayer paid commission to non-resident agents for services rendered 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....
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.... Pvt. Ltd. (2014) 369 ITR 96 wherein it was held that the services rendered by the non-resident agent could at best be called as a service for completion of the export commitment 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 office....