2016 (4) TMI 1422

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ribunal before the Hon'ble High Court raising the following substantial question of law:- "Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in upholding disallowance under sec. 40(a)(ia) in respect of non-deduction of tax at source on payments of commission to non-resident sales agents, when it was clear from the provisions of the Act as also Circulars issued by the CBDT that the relevant amounts were not chargeable to tax under the Income Tax Act, 1961, in the hands of the non-resident recipients?" 3. The Hon'ble Bombay High Court at Goa, vide order dated 07/03/2016, restored the issue back to the file of the Tribunal for re-adjudicating the same afresh. 4. Facts of the case are that the Asse....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he substantial question of law referred to above, the judgment of the Division Bench of Bombay High Court in the case of CIT Vs. Gujarat Reclaim & Rubber Products Ltd. in Income Tax Appeal No. 169/2014 dated 08/12/2015, it has been, inter alia, held that before effecting deduction at source one of the aspects to be examined is whether such income is taxable in terms of the Income Tax Act. This aspect has not been considered by the Tribunal while concluding that the appellant has committed a default in not deducting the tax at source. We find that the Commissioner of Income Tax (Appeals) has given a finding that the services of non-resident sales agents namely Mitsui & Co. Ltd. and Allied Ore Inc, Japan, are performed outside India and the s....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....'s Appeal for the Assessment Year 2008-09, inter alia held that the commission agent did not have any business connection in India as they had no permanent establishment in India and in fact neither any income arose or accrued to non-resident agent in India. The CIT(A), inter alia relied upon the decision of the Tribunal In DeIT v/s Ardeshi B Cursetjee & Sons Ltd. 115 TTJ 916 which held that the commission paid to non-resident agent outside India for the services rendered were not chargeable to tax in India. In these circumstances, the CIT(A) held that there was no occasion to deduct tax at source in respect of the payment made to the non-resident agent; (c) Moreover, the order of CIT(A) also holds that the Circular No.7 of 2009 withdrawi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ear 2008-09 also considers the order of the CIT(A) for the Assessment Year 2007- 08 while dealing with the Revenue's contention as reflected in the orders of the Assessing Officer which are similar for both the Assessment Years. In fact, the reasons for the order of the CIT(A) for Assessment Year 2007-08 are identical to the Assessing Officer's orders in both the Assessment Years i.e. the earlier Circular Nos. 23 of 1969 and 786 of 2000 stand withdrawn by Circular No7 of 2003. Therefore, the earlier Circular which cover would not be applicable/ available for the Assessment Year 2007- 08 and 2008-09. In fact, the CIT(A) in his order for Assessment Year 2008- 09 while allowing the appeal of the Respondent-Assessee places reliance upon the dec....