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2018 (4) TMI 257 - ITAT MUMBAITDS u/s 195 - Addition u/s 40(a)(i) - Non deduction of tds - commission payment made to non-resident agents & outward freight charges paid to foreign shipping company through agents - Inocme accrued in India - PE in India - Held that:- Admittedly, these payments are on account of commission made to foreign parties and similarly, the outward freight payments also made to foreign shipping companies. Admittedly there is no TDS deducted by the assessee on these payments. On identical facts and circumstances the coordinate bench of ITAT in the case of DCIT vs. Ardeshi B. Cursetjee & Sons Ltd. (2008 (3) TMI 500 - ITAT MUMBAI) held that where the assessee has paid commission to its foreign agents outside India for services rendered outside India and claimed deduction of the same as business expenditure, the case of foreign agent is not covered by the provisions of section 9 and income of the foreign agent will not be taxed in India. The responsibility of deducting tax at source from the remittances of the commission to the foreign agent would arise only when such commission is taxable in India in the hands of the recipient. The income of the recipient in the form of commission received from assessee was not chargeable to tax in India. Therefore in the present case also the lower authorities have wrongly interpreted the provisions of section 40(a)(i) of the Act and also section 195 of the Act. The assessee has submitted copy of letter of nonresidence regarding their tax residence and non-permanent establishment in India that there company is incorporated in New Zealand and Singapore. - Decided in favour of assessee. Addition on account of notional interest chargeable on debit balance of one of the partners of the firm - Held that:- As assessee’s counsel could not satisfied its claim by filing any evidence and could not point out any infirmity in the order of CIT(A). Hence, the same is confirmed and this issue of the appeal of assessee is dismissed.
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