2023 (8) TMI 295

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....o appeals filed by the Revenue impugning two separate orders dated 16.06.2017 passed by the Commissioner Income Tax (Appeals) relating to the assessment years 2013-2014 and 2014- 2015 respectively. 2. The present appeal relates to the dismissal of the appeal relating to the assessment year 2013- 2014. 3. The controversy involved in the present appeal relates to disallowance of Rs.4,13,48,057/- under Section 40(a)(i) of the Act made by the Assessing Officer (AO) on account of non-deduction of TDS. 4. The respondent assessee had sought deduction of certain expenditure being the commission paid to agent overseas and had not deducted the tax at source. According to the AO, the non-deduction of TDS under Section 195 of the Act disentitled the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ase of Commissioner of Income - Tax, A.P v. Toshoku Ltd.; 1980 125 ITR 525 (SC), had considered a case of payment of commission to a Japanese company, which was appointed as an exclusive sales agent for Tobacco exported to Japan. In the aforesaid context, the Hon'ble Supreme Court has observed as under: "12. The second aspect of the same question is whether the commission amounts credited in the books of the statutory agent can be treated as incomes accrued, arisen, or deemed to have accrued or arisen in India to the non-resident assessees during the relevant year. This takes us to Section 9 of the Act. It is urged that the commission amounts should be treated as incomes deemed to have accrued or arisen in India as they, according to the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... remitted by the purchasers from abroad does not amount to an operation carried out by the assesses in India as contemplated by clause (a) of the Explanation to Section 9(1)(i) of the Act. The commission amounts which were earned by the non-resident assessees for services rendered outside India cannot, therefore, be deemed to be incomes which have either accrued or arisen in India. The High Court was, therefore, right in answering the question against the Department." 11. The Commissioner Income Tax (Appeals) had, following the aforesaid decision, allowed the assessee's appeal against the assessment order dated 05.02.2016. 12. It is trite law that a foreign resident who does not carry on any business operations in the taxable territories....