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2015 (12) TMI 1078 - HC - Income TaxCommission payments made to nonresident sales agents - disallowance u/s 40(a)(i) - Held that:- There was no occasion to deduct tax at source in respect of the payment made to the nonresident agent. The income of nonresident commission agent cannot be considered as income arising or accruing in India. Therefore, the provisions of Section 40(a)(i) would have no application for the two Assessment Years under consideration. Not only the entire issue stands concluded in favour of the Respondent-Assessee in the present facts by the CBDT Circular Nos. 23 of 2969 and 786 of 2000 which were in force during the subject Assessment Years but also by the decision of the Apex Court in Toshoku Ltd. (1980 (8) TMI 2 - SUPREME Court ) in favour of the Respondent-Assessee. - Decided against revenue Disallowance of interest - availability of sufficient free funds - ITAT deleted the addition - Held that:- It is undisputed that the Respondent-Assessee has interest free funds aggregating to ₹ 16.09 Crore. The advances and interest made to group companies by the Respondent-Assessee is to the tune of ₹ 26.55 lakhs. The amounts borrowed in the aggregate being to the extent of ₹ 6.81 lakhs i.e. both working capital and term loans. Thus, as held by this Court in CIT v/s. Reliance Utilities & Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT ] that where both interest bearing funds and interest fee funds are available then a presumption would arise that investments to sister companies would be out of its interest free funds - Decided against revenue
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