TMI Blog2012 (4) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... n resident shipping companies or their agents under section 40(a)(ia) of the Income Tax Act, 1961. 2. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that no services were rendered in India and since no income accrued or arose in India, the payment of freight was not covered by section 195 and was not liable for deduction of tax at source u/s. 195 of the Income Tax Act, 1961. 3. The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of commission of ₹ 83,06,053/- paid to overseas agents under section 40(a)(ia) of the Income Tax Act, 1961 treating it as fees for technical services. 4. The learned Commissioner of Income Tax (Appeals) ought to have appreciated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture was in respect of services rendered by foreign agents outside India. No income accrued or arose to the payee in India and accordingly no tax was deducted while remitting the same. The Assessing Officer however that the assessee ought to have deducted tax at source in respect of these payments. The A.O, therefore disallowed the entire commission u/s. 40a(i) of the Act on the ground that the assessee has not deducted tax in respect of these payments. 4. On appeal by the assessee the CIT(A) confirmed the order of the AO. Aggrieved by the order of the CIT(A), the assessee has preferred the present appeal before the Tribunal. 5. At the time of hearing of this appeal ld. Counsel for the assessee submitted before us that as on the las ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Hon ble Bombay High Court in the case of CIT vs. Oriental (Goa) Pvt. Ltd., 325 ITR 554(Bom) relied upon by the revenues authorities are distinguishable and not applicable to the present case. In respect of the payment of commission also similar submissions were made. The ld. D.R relied on the orders of revenue authorities. 6. We have considered the rival submissions. We are of the view that the prayer of the assessee based on the decision of the Special Bench of ITAT Vishakapatnam in the case of Merilyn Shipping (supra) deserves to be accepted. If on examination by the AO it is found that the amounts which were claimed as expenditure and disallowed by the AO invoking the provisions of section 40(a)(ia) had been actually pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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