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2016 (4) TMI 1422 - AT - Income TaxTDS u/s 195 - disallowance under sec. 40(a)(ia) - non-deduction of tax at source on payments of commission to non-resident sales agents - second round of adjudication - HELD THAT:- Division Bench of Bombay High Court in the case of CIT Vs. Gujarat Reclaim & Rubber Products Ltd. [2015 (12) TMI 1078 - BOMBAY HIGH COURT] it has been, inter alia, held that before effecting deduction at source one of the aspects to be examined is whether such income is taxable in terms of the Income Tax Act. This aspect has not been considered by the Tribunal while concluding that the appellant has committed a default in not deducting the tax at source. We find that the Commissioner of Income Tax (Appeals) has given a finding that the services of non-resident sales agents namely Mitsui & Co. Ltd. and Allied Ore Inc, Japan, are performed outside India and the same are not taxable in India, hence, TDS is not deductable from the payments made to them. This finding of fact by the Commissioner of Income Tax (Appeals) is not disputed by the Revenue before us.Therefore, this issue stands covered by the decision of the Hon’ble Bombay High Court in the case of Gujarat Reclaim & Rubber Products Ltd. [2015 (12) TMI 1078 - BOMBAY HIGH COURT] - Decided against revenue.
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