Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (3) TMI 719 - HC - Income TaxNon deduction of tds - payments made by the assessee to the non-residents - whether the relationship between the appellant and the agents is contractual and entire service is provided outside India and duly compensated by way of commission payment which is also paid outside India, thus no TDS is to be deducted? - Held that:- The facts of the present case are akin to the facts of the decision in Toshoku Ltd.'s case [1980 (8) TMI 2 - SUPREME Court] wherein held that the non-resident assessees did not carry on any business operations in the taxable territories. They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does not amount to an operation carried out by the assessees 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.In the instant case the assessee engaged the services of non-resident agent to procure export orders and paid commission. That apart, the Commissioner of Income-tax (Appeals) as well as the Tribunal have correctly applied the principle laid down in GE India Technology Centre (P.) Ltd.'s case, [2010 (9) TMI 7 - SUPREME COURT OF INDIA] to hold that the assessee is not liable to deduct tax at source when the non-resident agent provides services outside India on payment of commission. - Thus the services rendered by the non-resident agent can 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, we are the firm view that section 9 of the Act is not applicable to the case on hand and, consequently, section 195 of the Act does not come into play. Also see Faizen Shoes case [2014 (8) TMI 170 - MADRAS HIGH COURT]- Decided in favour of assessee.
|