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2017 (5) TMI 435 - HC - Income TaxTDS u/s 195 - Addition of export commission - treating the payment of export commission as royalty for the purposes of Section 9 (1) (vi) read with Section 40 (a) (i) - export of specified models to specified countries - Held that:- The specific wording of the clauses of both the LTAA and the EA, it is not possible to accept the contention that the export commission was in fact the monetisation of the negative covenant of the LTAA viz., abstaining from exporting to territories outside India. This argument at its best is ingenious but far removed from what the transaction in fact is. The consideration for the EA is clearly spelt out. Consequently, there was no question of there having to be an principal-agent relationship to justify the payment of the export commission. The amount spent on that score by the Assessee was for the benefit of its business and in fact resulted in a benefit. The payment of export commission by the Assessee to HMCL was not in the nature of payment of royalty or fee for technical services attracting disallowance under Section 40 (a) (i) of the Act. No substantial question of law - Decided in favour of assessee.
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