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2017 (5) TMI 368 - HC - Income TaxNon-compliance of the provisions of section 40(a)(i) - commission payments received by the Indian agent on behalf of the Hong Kong entity in India - Non deduction of TDS - Held that:- An agreement had been entered into by the appellant with M/s.Textile Services Limited, Hong Kong for canvassing of export orders. Commission was paid on various dates between 2.7.2001 to 25.1.2002 amounting to ₹ 17,84,293/-. The amount was paid to M/s Textile Services Limited, an agent of the foreign entity based in Delhi. Concurrent orders of the authorities confirm the position that the commission has actually been received in India and no details were forthcoming to establish that the Indian entity received the same for onward transmission to Hong Kong. The inevitable conclusion in law is that the commission payments are liable to tax in India. The liability to deduction of tax at source is in terms of section 40(a)(i) of the Act. The argument of the learned counsel as well as the substantial question of law sought to be raised appear to be a clever afterthought, particularly since this argument was not raised either at time of assessment or first appeal but for the first time before the Tribunal even though all earlier orders were passed after the insertion of sub clause (ia) of section 40. Thus the commission payments have been received by the Indian agent on behalf of the Hong Kong entity in India, we find no infirmity in the order of the lower authorities and answer the substantial question of law against the appellant and in favour of the Revenue.
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