Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 1283 - AT - Income TaxTDS u/s 195 - Non deduction of TDS - commission expenses on export sales - expenses incurred are in the nature of ‘fee for technical services’ and thus falls within the sweep of Section 9(1)(vii) r.w. Explanation (2) thereto as against the claim of the assessee that commission payments are business expenses without involvement of any managerial, technical or consultancy services - HELD THAT:- It is the case of the assessee that the remittance have been made towards commission payments almost to the same parties as in the earlier years for which favourable view has been taken by the Tribunal on facts. It is the case of the assessee that the commission agents have rendered the services abroad and the situs of accrual or receipt of their commission income is outside India. It is further claimed that services rendered by agents have been utilized by the assessee outside India in procuring the export orders. The issue is squarely covered in favour of the assessee by the decision of co-ordinate bench for AY 2010-11 as rightly acknowledged by the CIT(A). The commission payments are seen to be made to the similar set of parties as in AY 2010-11. The allegation on behalf of the Revenue that expenses incurred are covered in the wider definition of ‘fees for technical services’ as defined in Explanation (2) to Section 9(1)(vii) of the Act is devoid of any rationale. Except for bald allegation of the services being akin to managerial or consultancy services, the AO has not brought any material on record to discard the stand of assessee. The co-ordinate Bench of Tribunal has duly analyzed this aspect in length [2017 (11) TMI 562 - ITAT AHMEDABAD] in the case of assessee itself and has delivered a speaking order in favour of the assessee on all aspects of subject matter on facts. The services in respect of commission expenses are stated to be rendered outside India as well as utilized outside India and therefore the income arising by way of commission against rendition of agency services cannot be deemed to accrue or arise in India in the hands of the recipients of such commission payments. In the circumstances, where the income arising to non-resident commission agents is not found to be chargeable in India under S.4 r.w.s. 5(2) of the Act, the obligation u/s 195 of the Act for deduction of tax at source cannot be fastened upon the remitter assessee. In the absence of statutory obligation arising u/s 195 for deduction of tax in the absence of chargeability of remittances, the corresponding disallowance u/s 40(a)(i) is without any merit and thus uncalled for. We thus see no error in the action of the CIT(A) who has rightly applied the decision of the Tribunal in the facts of the case. Appeal of the Revenue is dismissed.
|