TaxTMI 
TaxTMI 
2026 (2) TMI 311
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....the Income Tax Act. 2. The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2018-19 on 05.10.2018 declaring total income of Rs. 12,69,39,970/-. The case of assessee was selected for limited scrutiny under CASS and one of the issue was "compliance with TDS provisions on payments outside India". In the course of assessment, the AO found that the assessee had paid commission, royalty or professional fee outside India on which no TDS was deducted. According to the assessee, commission payment of Rs. 5,63,28,206/- was made for services rendered outside India, which was not liable to tax within the country and, therefore, no TDS was made thereon. However, the AO did not agree with the submissions of the....
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....ra, Shri Karan Shah, the Ld. AR of the assessee submitted that the decision of Hon'ble Supreme Court in the case of Transmission Corporation of AP Limited (supra) was on completely different facts. He submitted that identical issue was involved in assessee's own case in A.Y. 2013-14 which was decided by the Co-ordinate bench of this Tribunal in ITA No. 1112/Ahd/2017 dated 08.02.2019 and relief was allowed to the assessee. The ld. AR also relied upon the decision of the Supreme Court in the case of Vedanta Limited (146 Taxmann.com 34) (SC). The ld. A.R submitted that the assessee was no liable to deduct TDS on commission payments to the foreign agents, as the services were rendered outside India and no part of income had arisen in India. Und....
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....in India and the assessee does not deduct TDS. Thus the primary condition to be satisfied for attracting the provision of section 40(a)(i) is that tax is deductible at source on the payment chargeable under this Act made outside India and which is not deducted. The contention of the assessee is that no tax was deductible u/s 195 of the Act on the payments made by it to the foreign agents for the reason that the services being rendered outside India, the payments were not chargeable under the Act. The AO did not give any finding in this regard in the assessment order. He had applied the provision of section 40(a)(i) of the Act in a mechanical manner on the presumption that tax was deductible on the payments made by the assessee to the foreig....
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....assessee by the decision of the Hon'ble Gujarat High Court in the case of Nova Technocast (Supra), MGM Exports (Supra) as well as ABM Steels (Supra) The commission being in the nature of income accrued from services rendered outside India, such payments has no tax implications in India in the hands of non-residents. This being so, we find no infirmity in the order of the CIT(A). The CIT(A) has rightly concluded that commission payments to non-residents towards overseas sales is not susceptible to take in India and therefore Section 195 has no obligation and consequently Section 40(a)(i) does not get triggered. We thus decline to interfere. 10. The Hon'ble Supreme Court in the case of GE India Technology CEN (Pvt.) Ltd. (193 Taxmann 2....