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2019 (5) TMI 1819 - AT - Income TaxTDS u/s 195 - tds on foreign remittances - HELD THAT:- Services rendered by the non-resident agent could 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" and, therefore, section 9 was not applicable and, consequently, section 195 did not come into play. Therefore, the disallowance made by the Assessing Officer towards export commission paid by the assessee to the non-resident was rightly deleted. Judgment of Hon‘ble Madras High Court in the case of Farida Leather Company [2016 (2) TMI 798 - MADRAS HIGH COURT]directly covers the dispute between rival parties. The Hon‘ble Madras High Court was seized for AY 201011 in the above case. Thus, based on our detailed discussions and reasoning, we hold that under factual matrix of the case no additions u/s 40(a)(i) of the 1961 Act read with Section 195 are warranted in the instant case on payments made by assessee to four overseas agents towards commission expenses for generating export orders or facilitating import for the assessee. We affirm the decision of learned CIT(A) and Revenue fails in this appeal. Addition u/s 68 - CIT(A) relying on the additional evidences filed by the assessee accepted the contention of the assessee and allowed relief to the assessee - HELD THAT:- In terms of Rule 46A(3) of the 1962 Rules, it was incumbent upon Ld. CIT(A) to have forwarded additional evidences to AO for necessary verifications/ comments . The Principles of Natural justice are clearly breached by learned CIT(A) by non affording AO to rebut additional evidence filed by assessee for the first time before learned CIT(A). Rule 46A(3) of the 1962 Rule is not merely an empty formality as principles of natural justice are embedded in it as clearly Revenue is entitled to rebut any additional evidence filed by the taxpayer for the first time before learned CIT(A) and violation thereof will clearly vitiate the order. It is also observed that learned CIT(A) accepted this additional evidence filed by the assessee for the first time before learned CIT(A) without making any enquiry or verification itself as to the veracity of this additional evidences filed by the assessee for the first time before learned CIT(A). - we are inclined to set aside and restore this issue to file of the AO for fresh adjudication. - Decided in favour of revenue for statistical purposes.
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