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2014 (6) TMI 255 - AT - Income TaxDeletion of addition u/s 40(a)(ia) of the Act - Commission paid to Non-residents – Applicability of benefit of circular - CIT(A) not appreciated the fact that Circular No. 786 has been withdrawn by the Circular No. 7 of 2009 dated 22.10.2009 – Availability of benefit of DTAA - Held that:- No such question was either raised by the AO or by CIT(A), there was no occasion for the assessee to produce such certificate before the authorities – at this stage in the absence of any record to prove the contrary the mere contention of the revenue cannot be accepted – there was no error or illegality in the order of CIT(A) whereby it has been held that the Explanation in question is not applicable in the case of the assessee - The limit provided under the RBI guidelines for remittance of commission is relevant only for the purpose of remittance in foreign exchange and is not relevant for determination of the allowability of the expenditure under the Income Tax Act - Once the remittance was allowed even more than limit provided by the RBI guidelines the same becomes irrelevant for the purpose of allowability of the expenditure under the Income Tax Act. So far as the withdrawal of Circular No. 786 by a subsequent Circular 7/2009 dated 22.10.2009 is concerned, it has been decided in CIT Vs. Angelique International Ltd. [2013 (10) TMI 17 - DELHI HIGH COURT] that the Circular no. 7 of 2009 whereby the Circular No. 789 has been withdrawn did not have retrospective effect - even otherwise at the time of remittance of the amount in question the Circular No. 786 was very much inforce and existence, the assessee cannot be expected to deduct tax at source on the commission paid to the non-resident agent – the order of the CIT(A) is upheld – Decided against Revenue.
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