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2019 (5) TMI 839 - AT - Income TaxTDS u/s 195 - addition u/s 40(a)(i) - disallowance of foreign commission expenses - expense paid to non-residents - income accrued in India - HELD THAT:- As decided in assessee's own case [2019 (5) TMI 705 - ITAT AHMEDABAD] Commission payments made to the non-resident agents did not have any taxability in India, even under the provisions of the domestic law i.e. Section 9. Once we come to the conclusion that the income embedded in these payments did not have any tax implications in India, no fault can be found in not deducting tax at source from these payments or, for that purpose, even not approaching the Assessing Officer for order u/s 195. In our considered view, the assessee, for the detailed reasons set our above, did not have tax withholding liability from these payments. - Decided in favour of assessee. TDS u/s 195 - Disallowance u/s 40(a)(ia) on account of professional consultancy fees - HELD THAT:- the said consultancy fee was paid to Momaja SRO for the professional services having rendered outside India. It further appeared that in European country the import of chemicals from outside country is subjected to restriction establishing office there or by first registering the assessee company under REACH (EU Regulations, 1907/2006). Thus, to export in these countries is for making income from sources outside India, otherwise, it would not be able to earn any Income by exports to these EU countries. The said Momaja SRO already completed all necessary formalities in making compliance with REACH in EU Regulations to make the appellant eligible to export in EU countries and thus section 9(1)(vii) does not apply. CIT(A) came to a conclusion that the aforesaid service was rendered by the processional outside India and therefore the income has not accrued in India u/s 195 and thus the question of obligation to make the TDS u/s 195 does not arise. AO has failed to point out in what manner the professional income has arisen or accrued in India or the said party had any permanent establishment or business connection in India or rendered any services in India, in absence of which the case made out by the assessee has been accepted and the application of provisions of section 195 r.w.s. 40(a)(ia) as made by the Learned AO has been rejected by the first appellate authority upon deleting the addition correctly - Decided in favour of assessee.
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