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2013 (11) TMI 907 - AT - Income TaxDisallowance u/s 40(a)(i) - Application of S.195 - Non deduction of TDS on overseas commission payments made to the non-resident under section 195(2) - CIT deleted disallowance - Held that:- assessee has made certain payments to overseas agents as commission and no TDS was deducted. According to the Assessing Officer, the assessee's business is situated in India and the payments were also made from India and according to section 195, the assessee is under obligation to deduct TDS. Therefore, by invoking section 40(a)(i), he has disallowed an amount of ₹ 5,62,13,826/-. On appeal, the CIT(Appeals) deleted the disallowance on the ground that the commission was paid to non-resident agent and it cannot be said to have been accrued in India and section 195 have no application. The only issue for our consideration is as to whether the assessee is under obligation to deduct the TDS under section 195 or not. The CIT(Appeals), by considering the entire facts and circumstances of the case passed a detailed order by observing that section 195 have no application to assessee's case - In the present case, the assessee paid certain amounts to overseas agents for procurement of export orders. The agents have not provided any managerial/technical services. The payments received by the non-resident Indian are not taxable in India - section 195 have no application to assessee's case - Following decision of The Commissioner of Income Tax Delhi-IV, New Delhi Versus EON Technology P. Limited [2011 (11) TMI 20 - DELHI HIGH COURT] - Decided against Revenue.
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