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2018 (9) TMI 1542 - ITAT DELHITDS u/s 195 - violation of provisions of section 9(1)(vii) r/w section 195(1) - non-deduction of tax at source on commission paid to two foreign entities namely Ancare Trade Consultants and M/s Whynot Buying House Services & Others - Held that:- Commissioner of Income Tax (A) has stated in the impugned order that the assessee has brought on record details pertaining to the commission paid, rebate and discount, copy of bills, FIRCs issued by the banks, agreement with the foreign agent as evidence in support of submissions etc. Commissioner of Income Tax (A) has deleted the addition in this respect by observing that the Assessing Officer was not justified in disallowing the commission expenses by holding the expenses as not genuine. CIT (A) has also observed that tax is not liable to be deducted with respect to payments which is paid to non-residents particularly when the services were rendered outside India, used outside India and the payments were made outside India in the absence of a Permanent Establishment in India. CIT(A) went on to hold that since the impugned income in the hands of the non-resident did not accrue or arise directly or indirectly, through or from any business connection in India or through the transfer of capital asset situated in India, the provisions of section 9(1) were not applicable on the facts of the case. Although the relevant details in respect of the impugned addition were not filed before the Assessing Officer, the CIT (A) has admitted the details submitted before him in terms of the copy of bills, FIRCs issued by the bank, agreement with the foreign agents etc. Although not been specifically mentioned in the impugned order that the same were being admitted as additional evidence by the CIT(A), it is apparent that these documents/details were not field by the assessee before the Assessing Officer and CIT(A) admitted these evidences during the course of first appellate proceedings before him without calling for a remand report from the Assessing Officer in this regard. Without going into the merits of the deletion of addition by the Ld. Commissioner of Income Tax (A), on the basis of factual matrix as appearing from the orders of both the lower authorities, it is apparent that the Ld. Commissioner of Income Tax (A) did not resort to the provisions of Rule 46A of the Income Tax Rules, 1962 while admitting these additional evidences which were placed for the first time before him and we are in agreement with the Ld. Sr. DR to this extent that the Assessing Officer should have been given an opportunity to examine the documents which were submitted at the first appellate stage. Addition u/s 50C r/w section 69A - Held that:- It is a settled law that section 50C applies to cases where a property has been sold. In case of acquisition of immoveable property at a value less than the value adopted for the purpose of stamp duty, the difference between stamp duty value and the transaction value can at best be taxed under provisions of section 56(2)(vii) of the Act which, any way is not attracted in the case of the assessee as the assessee is a partnership firm. Section 50C creates a legal fiction whereby apparent consideration is substituted by valuation done by stamp valuation authorities and capital gains are calculated accordingly. But legal fiction cannot be extended any further so as to take within its ambit the case of a purchaser where it is alleged that the purchaser had paid a price less than the value as adopted for the stamp duty purposes. A perusal of the assessment order also shows that the Assessing Officer has not disputed the price paid by the assessee and has not made any observations that the consideration as reflected in the books of accounts was less than what was actually paid by the assessee or what was recorded in the sale deed. ITAT Ahmedabad Bench had an occasion to consider an identical issue in the case of ITO vs. Harley Street Pharmaceuticals Ltd. [2010 (3) TMI 886 - ITAT AHMEDABAD] - Appeal of the department stands partly allowed for statistical purposes.
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