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2015 (2) TMI 1281 - AT - Income TaxTDS u/s 195 - Non-deduction of TDS on payment of commission to Foreign Agent - income accrued in India - Held that:- As decided in INCOME-TAX OFFICER, CO. WARD-II(1) VERSUS FAIZAN SHOES (P.) LTD. [2014 (1) TMI 440 - ITAT CHENNAI] Non-residents were only procuring orders for the assessee and following up payments and apart from that, no other services were being rendered. That since non-residents were not providing any technical services to assessee, payments made to them did not fall under category of royalty or fee for technical services u/s 9(1)(vii. Even otherwise, since commission paid to non-resident was not taxable in India, the assessee was not required to deduct tax at source while making said payments. The facts in the present case are identical because in the present case also, commission was paid to non-resident for procuring orders without deducting tax. Considering Circular No.7/2009 dated 22/10/2009 as per which Circular No. 786 dated 07/02/2000 was withdrawn, it comes out that in the facts of the present case, no TDS was required to be deducted because as per this circular in the case of payment of commission to foreign agents, nothing was required to be seen and examined and it could be concluded that no TDS was required to be deducted. Since, in the present case, this is not a case of the revenue that the services were rendered in India or the payment was made in India and the incomes in the hands of the non resident agent can be considered as deemed to accrue or arise in India by way of operation of section 9 (1), no disallowance can be made u/s 40(a)(i) - Also considered the explanation to section 9(2) and have seen that this explanation also has no relevance in the present case and therefore, we decline to interfere in the order of CIT(A). - Decided in favour of assessee.
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