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2017 (5) TMI 413 - AT - Income TaxTDS u/s 195 - tax to be deducted at source with regard to the payment made to agents - Held that:- There is no doubt that the persons receiving the commission incomes were located outside India and they had no permanent establishment in India. It is also a fact that services were not rendered in India. In the circumstances, we are of the opinion that considering the peculiar facts and circumstances of the case it has to be held that provisions of section 40(a)(i) could not be applicable to the payments made by the assessee to the foreign agents. Considering the above, we are of the opinion that the FAA was not justified in sustaining the partial disallowance. So, reversing his order, we decide the first ground of appeal in favour of the assessee. Disallowance made u/s. 14A - Held that:- As stated earlier, the assessee had not these the issue before the FAA. Before us, it was argued that the AO had made disallowance of ₹ 17.18 lakhs, that the AO was not justified in making disallowance under the head interest expenditure, that the assessee had sufficient own interest-free funds to make investments, that it had made strategic investment, that the AO had not arrived at the conclusion that disallowance made by the assessee was not as per the provisions of the law. The DR stated that order of the AO did not require any interference. We have admitted the additional ground, raised by the assessee with regard to 14A disallowance. In our opinion, in the interest of Justice, the matter should be restored back to the file of the AO for fresh adjudication. He is directed to afford a reasonable opportunity hearing to the assessee. Second ground is decided in favour of the assessee, in part.
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