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2014 (6) TMI 463 - AT - Income TaxDeletion of disallowance u/s 40(a)(ia) of the Act – TDS not deducted - Payment made to foreign commission agents – Held that:- Following Income-tax Officer, Co. Ward-II(1) Versus Faizan Shoes (P.) Ltd. [2014 (1) TMI 440 - ITAT CHENNAI] – sales commission paid by the assessees to non-residents are not chargeable to tax in India, therefore provisions of section 195 are not applicable - assessees paid sales commission to its nonresident agents for the services rendered by them outside India and the sales commission is not chargeable to tax in India so as to deduct TDS on payments u/s 195 of the Act – thus, the order of the CIT(A) in deleting disallowance made u/s 40(a)(ia) of the Act is upheld – Decided against Revenue. Restriction of disallowance to 50% on the 15% disallowance – Held that:- CIT(A) was rightly of the view that the ledgers, vouchers, etc. have also been produced during the appeal hearings and on a random test check on the same was largely found to be in order - the ad-hoc addition made by the AO of 15% of such expenses appears to be on the higher side – thus, there was no reason to interfere with the order of the CIT(A) in restricting disallowance to 50% of 15% - Decided against Revenue. Deletion of interest u/s 234B and 234C of the Act – Held that:- CIT(A) rightly held that charging of interest u/s 234A, 234B, 234C & 234D are mandatory and he has directed the AO to re-compute correct interest u/s 234B & 234C of the Act while giving effect to the order – Decided against Revenue.
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