2021 (1) TMI 1283

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....under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2015-16. 2. The grounds of appeal raised by Revenue read hereunder: "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in law and fact in deleting the addition made on account of non deduction of TDS on the amount of Rs.78,90,570/- without appreciating the findings of Assessing Officer in the assessment order and in view of circular No.7 of 2009 of the Board." 3. The AO in the instant case disallowed claim towards commission expenses on export sales to the extent of Rs.78,90,570/- (being 30% of total commission claimed amounting to Rs.2,63,01,900/-) in the course of the assessment carried out under s.143(3) of the Act on the ground that the....

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....ns of Section 40(a)(ia). The Tribunal in ITA No. 1391/AHD/2015 did not concur the view of the ld. CIT and quashed the order passed u/s 263 of the Act. Key findings are as under: i) Commission payments made to Non-Resident agents did not have any taxability in India, even under the-provision of domestic law i.e. Section 9. ii) Once concluded that income embedded in these payments did not have tax implication in India, no fault can be found in not deducting tax at source from these payments or for the purpose, even not approaching the AO for order u/s 195. 5.2. The order of the jurisdictional tribunal is binding on me and facts are similar in assessment year under consideration. The Ld. AR also informed that a copy of order is held w....

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....ade to non-resident agents are in the nature of commission payment only and therefore provisions of Section 9(1)(vii) of the Act will not come into play at all. It was submitted that the majority of non-resident agents are the same as existing in AY 2010-11 and the model of business has not changed much in this regard. A tabulated party-wise comparative statement towards commission payments for AY 2010- 11 and 2015-16 were placed on record after the closure of hearing as directed by the Tribunal to support its claim that the payments were continued to be made towards commission expenses. It was further pointed out that the agents engaged for securing orders overseas do not have business connection or any permanent establishment in India. It....

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....sion payments are seen to be made to the similar set of parties as in AY 2010-11. The allegation on behalf of the Revenue that expenses incurred are covered in the wider definition of 'fees for technical services' as defined in Explanation (2) to Section 9(1)(vii) of the Act is devoid of any rationale. Except for bald allegation of the services being akin to managerial or consultancy services, the AO has not brought any material on record to discard the stand of assessee. The co-ordinate Bench of Tribunal has duly analyzed this aspect in length in ITA No.1391/Ahd/2015 for AY 2010-11 in the case of assessee itself and has delivered a speaking order in favour of the assessee on all aspects of subject matter on facts. The services in respect o....