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2020 (2) TMI 29 - AT - Income TaxTDS u/s 195 - commission to foreign entity and also paid advertisement fee and registration charges to Arab Fertilizers Association and foreign exhibition without deduction of TDS - Addition u/s 40(a)(ia)/40(a)(i) - HELD THAT:- Neither the A.O. nor the ld. CIT(A) has examined the actual nature of services rendered by the agent so as to bring them to the ambit of the fee for technical services. We further note that the assessee has made payment of commission in respect of sale to one party namely Indo-Jordan Chemical Limited, Jordan. This fact is relevant to consider the nature of services rendered by the foreign agent when the assessee has made sales only to one party. Even it is not clear from the record produced before us whether the sale made to the Indo-Jordan Chemical Limited, Jordan was an international transaction being sold to associated enterprises (AE) or not. Since the A.O. has not taken up this issue and even held that the agent has rendered the services which is in the nature of managerial acumen and expertise and consequently payment is in the nature of fee for technical services, therefore, we do not go into the said issue whether any services were rendered by the agent or not. As regards the advertisement payment, the assessee has made payment to two different media entities namely Argus Media Limited, London, U.K. and Arab Fertilizers Association, Cairo Egypt, therefore, the issue of existence of PE of the recipient can be considered only when there is a DTAA between the India and the countries of the recipient non-resident entities. The registration fee and foreign exhibition participation fee was paid to Arab Fertilizers Association, Egypt, therefore, in order to consider benefit of DTAA and existence or non-existence of PE, the provisions of the respect DTAA are required to be considered. Since neither the A.O. nor the ld. CIT(A) have examined this issue by considering the relevant facts as well as the respective DTAAs if any between the India and the country of the recipient/non-resident, therefore, in our considered opinion, this issue requires a proper verification and examination. Accordingly, we set aside this issue to the record of the ld. CIT(A) for adjudication of the same afresh - Appeal of the assessee is allowed for statistical purposes only.
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