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2015 (12) TMI 1171 - AT - Income TaxDisallowance towards purchase of leather - Held that:- Admittedly, the assessee engaged in the business of manufacturing and export of leather and leather garments. The assessee claimed before the Assessing Officer that it purchased leather to the tune of ₹ 2,00,292/-. The assessee filed copies of the books of account for the period 01.04.2009 to 31.03.2010 and 01.04.2010 to 31.03.2011. The Revenue authorities have not disputed the purchases made by the assessee. From the orders of the lower authorities it appears they are disputing only the payment. The assessee is in the manufacture of leather and leather garments. Without purchasing the leather, it cannot manufacture leather garments. When the purchase is not doubted, this Tribunal is of the considered opinion that there is no reason to doubt the payment. In those circumstances, in view of the smallness of the amount of ₹ 2,00,292/-, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orders of the lower authorities are set aside and the addition is deleted. - Decided in favour of assessee TDS u/s 195 - Disallowance of commission paid to foreign agents - non deduction of TDS - Held that:- Admittedly, the assessee is engaged in manufacturing leather and leather garments. In order to market its product in foreign countries, the assessee engaged agents and paid commission to them. The question arises for consideration is whether the commission payment made by the assessee is in the nature of fee for technical services or not? This issue was considered by the Madras High Court in Faizan Shoes Pvt. Ltd. (2014 (8) TMI 170 - MADRAS HIGH COURT ) wherein found that the foreign agent is not providing any technical service for the purpose of running of the business of the assessee in India. Therefore, the commission paid to the agent is not a fee for technical service, hence, the assessee is not liable to deduct tax under Section 195 of the Act. The payment made by the assessee to the agents outside India cannot be construed as fee for technical service. Hence, the assessee is not liable to deduct tax.- Decided in favour of assessee
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