TMI Blog2012 (2) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant in India. We therefore hold such export commission payable to be deemed to accrue and arise in India, and is taxable in view of the specific provision of Section 5(2)(b) r.w.s. 9(1)(i). Applicant has not contended that it is availing benefits under the provision of DTAA with Pakistan nor has it a claim of tax exemption under any provision of the Act. The provision of section 195 wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that though CBDT has withdrawn Circular No.786 dated 2.2.2007, sections 5(2) and 9 of the Income-tax Act, 1961 (Act) have not undergone any change. The payment of commission on export order did not accrue or arise to the two non-residents in India and hence there is no liability to tax in India. The provision of tax withholding under section 195 of the Act would not apply. 2. On the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rued in India when the right to receive the income became vested. 4. It is the applicant's contention that the agents have rendered services abroad and would be entitled to receive commission abroad for the services rendered to foreign clients of the applicant. As the services are rendered outside India, and the payment is receivable by the agents abroad no income would arise under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'accrue' or 'arise' occurring in section 5 have more or less a synonymous sense and income is said to accrue or arise when the right to receive it comes into existence. No doubt the agents rendered services abroad and have solicited orders, but the right to receive the commission arises in India when the order is executed by the applicant in India. The fact that the agents have rendered services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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