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2018 (10) TMI 1961 - AT - Income TaxDisallowing the taxpayer’s commission payments made to foreign export agents - non deduction of TDS u/s 40(a)(i) - HELD THAT:- There is no dispute so far as the basic facts pertaining to the instant issue are concerned. The assessee has made commission payments to overseas agents in lieu of procuring export orders for outside markets. There is no material in case file which could suggest either of these to have received any service in details. It is in this backdrop of facts that CIT(A) has held the said overseas commission agents not to have rendered any service in India giving rise to taxability of their commission income in India. Hon'ble apex court’s decision in G.E. India Technology Centre Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT] has settled the law that TDS deduction comes into play only if the corresponding income is taxable in the recipients’ hands in India. Assessee’s payees / agents neither have any permanent establishment in India u/s 9(1)(i) nor they have any commission activity performed in India so as to be exigible to assessment in India. We therefore uphold CIT(A)'s detailed findings extracted hereinabove based on correct appreciation of facts in light of various judicial precedents to conclude that he has rightly deleted the impugned foreign agents commission disallowance made in the course of assessment. The Revenue fails in its first substantive ground. Disallowance u/s 14A r.w.r 8D - HELD THAT:- It has come on record that Revenue’s only endeavour is to revive proportionate interest expenditure disallowance only. It fails to rebut the CIT(A)’s clinching findings that the instant taxpayer had sufficient interest free funds and also that the issue has attained finality in preceding assessment year. We therefore reject Revenue’s second substantive ground as well by adopting judicial consistency. TDS u/s 194C - Transportation Expenses – Addition u/s 40a(ia) - Revenue’s only argument during the course of hearing is that although assessee had complied with the relevant conditions u/s 194(6) of obtaining the necessary declaration alongwith PAN No. of the payees, it has failed to satisfy all the necessary condition enshrined in sec. 194(7) - HELD THAT:- We find no merit in the instant argument since the CIT(A) has considered a catena of case law vis-àvis sec. 194(6) of the Act to conclude that assessee’s liability to deduct TDS arises at the time of payments as against that envisaged in sec. 194C(7) of the Act. This tribunal’s decision in Soma Rani Ghosh vs. DCIT [2016 (10) TMI 55 - ITAT KOLKATA] also reiterates the very principle. We therefore uphold the CIT(A)’s findings deleting the impugned disallowance qua the instant issue as well. Disallowing / adding assessee’s employees contribution to PF & ESI - HELD THAT:- Hon'ble jurisdictional high court’s decision in CIT vs. Vijay Shree Ltd. [2011 (9) TMI 30 - CALCUTTA HIGH COURT] holds that the impugned disallowance is not sustainable in case the assessee deposits the impugned contribution the same before the due date filing its return. There is no exception pointed out to this legal position during the course of hearing. We decline Revenue’s instant last substantive ground as well. Revenue’s appeal is dismissed.
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