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2018 (4) TMI 1566 - AT - Income TaxTds u/s 195 - disallowance u/s 40(a)(i) - Non deduction of tds on commission payment on export as been made to a non-resident Indian - income accrued in India - Held that:- In view of the decision rendered in Eon Technology P. Ltd. (2011 (11) TMI 20 - DELHI HIGH COURT) on the basis of decision rendered by Hon’ble Supreme Court in case cited as CIT vs. Toshoku Limited – (1980 (8) TMI 2 - SUPREME COURT), we are of the considered view that when it is not in dispute that the commission payment on export has been made to a non-resident Indian by the assessee for services rendered abroad and no part of said income has arisen in India, TDS was not required to be deductible at source and disallowance u/s 40(a)(i) is not sustainable in the eyes of law. Moreover, the ld. CIT (A) has meticulously relied upon the provisions contained u/s 90(2) of the Act and Article 7 (1) of the Double Taxation Avoidance Agreement (DTAA) entered into between India and Italy, France, Germany and UK vide which existence of Permanent Establishment (PE) in India is necessary for subjecting to tax business of any entity in India. Since M/s. Sari Oren of France is admittedly a non-resident having no PE in India, the provisions contained u/s 40(a)(ia) are not applicable in this case. - Decided in favour of assessee
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