TMI Blog2015 (2) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... not required to deduct tax at source while making said payments. The facts in the present case are identical because in the present case also, commission was paid to non-resident for procuring orders without deducting tax. Considering Circular No.7/2009 dated 22/10/2009 as per which Circular No. 786 dated 07/02/2000 was withdrawn, it comes out that in the facts of the present case, no TDS was required to be deducted because as per this circular in the case of payment of commission to foreign agents, nothing was required to be seen and examined and it could be concluded that no TDS was required to be deducted. Since, in the present case, this is not a case of the revenue that the services were rendered in India or the payment was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has been paid by the resident assessee to the non-resident for the technical services rendered by him. 3. That the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in not appreciating the fact that in the assessment order the AO has pointed out that the services rendered by the agents are of technical nature in sense that these were connected with the use of expertise, skill and technical knowledge in running of business of the assessee which falls under the narrow definition of Fee for Technical Services. 4. That the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in not appreciating the fact that the agents have the skill and expertise about the leather products a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . of the Revenue supported the assessment order. 5. We have considered the submissions of Learned D.R. of the Revenue, perused the material available on record and gone through the orders of the authorities below. We also find that the paper book of 71 pages was submitted by Learned A.R. of the assessee and hence, we consider the paper book also for the purpose of deciding the issue. The said paper book also contains a judgment of Hon'ble Bombay High Court rendered in the case of Grasim Industries Ltd. v. S.M. Mishra, CIT [2011] 199 Taxman 184. In this case, it was held by Hon'ble Bombay High Court that an income received by a non-resident by way of payment from a resident Indian for technical services rendered to him would be su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) of section 9 of the Act even if the non-resident does not have a residence or place of business or business connection in India and non-resident has not rendered services in India. As per this explanation in sub section (2) of section 9, only those incomes which are covered by clause (v), (vi) and (vii) of section 9 (1) are affected. Clause (v) of section 9(1) is regarding interest income and therefore, this clause is not applicable. Clause (vi) is regarding income by way of royalty and clause (vii) is regarding income by way of fees for technical services (FTS). In the present case, the dispute is not regarding payment of royalty or FTS but the disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of DIT v. Sheraton International Inc. [2009] 313 ITR 267. The CIT(A) has also followed Tribunal decision in the case of ITO v. Faizan Shoes (P.) Ltd. [2013] 58 SOT 245 (Chennai - Trib.). In that case, the assessee was engaged in the business of shoe uppers and leather shoes and paid certain commission to non-residents for procuring export orders. Since the assessee did not deduct tax at source while making said payments, Assessing Officer disallowed the same u/s 40(a)(i) of the Act. Under these facts, it was held by the Tribunal that non-residents were only procuring orders for the assessee and following up payments and apart from that, no other services were being rendered. It was held that since non-residents were not providing any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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