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2015 (10) TMI 532 - AT - Income TaxRevision u/s.263 - AO failed to examine the relevant documents/agreement along with the correspondence and other evidences to determine whether the income is chargeable under the provisions of sec.9(1)(vii) read with relevant provisions of the DTAA and the Assessing Officer has not verified the purchase orders along with correspondences with M/s. Tarun Anvil Corporation, USA. - Held that:- Sec.195(1) prescribes that tax has to be deducted while making payment to non-resident, which is chargeable under the provisions of the Act. Therefore, the condition precedent for deduction of tax is that the income must be chargeable under the provisions of the Act. In the present case, the assessee has not produced relevant agreement entered into with that foreign agent to show that they were appointed to act as commission agents outside India in their respective countries. It is seen from the orders of the lower authorities that the assessee has not discharged the burden cast upon it to show the nature of services rendered by non-resident agent. If there are services rendered by non-residents, who have no permanent establishment in India or have any business connection in India, by virtue of which the payment of commission accrued or arose in India then, it is exempted, if the assessee is able to prove that the services were rendered by those non-residents at abroad. In the present case, the assessee has not established the facts on record that the non-resident has rendered services at abroad and there is no business connection in India by producing relevant records, viz., either agreement entered into by the assessee with them or correspondence took between the parties. Without examining these details, we are not in a position to decide the nature of services rendered by the non-resident agent. Therefore, it is appropriate to remit the entire issue back to the file of the AO with direction to the assessee to prove that it was sales commission towards procurement of orders from abroad. Accordingly, the entire issue is remitted back to the file of the AO for fresh consideration and the AO is directed to make necessary enquiry regarding the nature of services rendered by the non-resident agent and the payments made thereof. - Decided in favour of assessee for statistical purposes.
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