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2017 (12) TMI 1730 - AT - Income TaxTDS u/s 195 - payment of commission was made to NRI - addition u/s 40(a)(ia) - lower authorities has sustained the disallowance of payment of sales commission to an NRI without deducting TDS by taking a view that circular has been withdrawn and treating the sales commission as fee for technical services - HELD THAT:- It is pertinent to note that this commission was given for procuring the export orders from outside India. Sourcing orders abroad for which payment had been made directly to the nonresident does not fall in the category of technical services and transactions do not partakes the character of fee for technical services as explained in Section 9(ii)(vii) of the Act. Thus the commission has been paid for the services rendered outside the India. The person to whom the commission paid was not having any business connection in the India and commission so earned by him is not taxable in the India. Therefore, the provisions of Section 195 of the Act are not applicable. See M/S. FARIDA LEATHER COMPANY [2016 (2) TMI 798 - MADRAS HIGH COURT] - Decided in favour of assessee.
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