Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 290 - HC - Income TaxDeletion of disallowance of Non-deduction of tax u/s 195 of the Act Retrospective effect of section 9 (1) (vii), read alongwith the explanation introduced by Finance Act, 2010 w.e.f. 1.6.1976 of the Act Disallowance of payment u/s 40(a)(ia) of the Act Commission paid to agents Violation of section 9(1)(vii) r.w. section 95 of the Act Held that:- Following CIT v. M/s Model Exims, Kanpur, Income Tax Appeal [2013 (9) TMI 742 - ALLAHABAD HIGH COURT] - AO did not bring anything on record, which could demonstrate that non-resident agents were appointed as selling agents, designers or technical advisers - payment of commission to foreign agents did not entitle such foreign agents to pay tax in India and thus the TDS was not liable to be deducted u/s 195 of the Act - The disallowance made by AO u/s 40 (a) (i) for non-deduction of tax at source u/s 195 were not justified. The fact situation did not contemplated or clarified in the explanation added by Finance Act, 2010 is applicable as the agents appointed by the assessee had their offices situate in a foreign country and that they did not provide any managerial services to the assessee - Section 9 (1) (vii) deals with technical services and has to be read in that context - The agreement of procuring orders would not involve any managerial services - The agreement did not show the applicability or requirement of any technical expertise as functioning as selling agent, designer or any other technical services Decided against Revenue.
|