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2020 (12) TMI 251 - AT - Income TaxCommission expenses paid to its holding company - Whether such payments were at arm's length or were for business expediency? - As per assessee has not furnished the necessary details about the quantification of the amount of commission - It is the 2nd round of litigation - HELD THAT:- AO was directed to verify the quantum of the commission expenses. But he has not done so despite having all the details furnished by the assessee in connection with the quantum of commission expenses. These details can be verified from the submission of the assessee before the ld. CIT-A. AO has not pointed out any defect in the contentions of the assessee as well as the documents filed by it. Thus it can be transpired that the AO has accepted the quantum of the commission expenses as claimed by the assessee. Similarly, it was also directed by the ITAT to verify the nature of services obtained by the assessee from the company namely BG Energy Holding Limited which were discernable from the copies of the agreements. But the AO has not made any comment on such services which implies that he has accepted all the contentions of the assessee. Assessee in the set-aside proceedings has duly complied with the direction of the ITAT as discussed above and the AO has not pointed out any infirmity in the submission of the assessee. Thus in the present facts and circumstances, the AO has no power to make the disallowance of the commission expenses as claimed by the assessee for any other reason i.e. Non deduction of TDS which is beyond his power in the given facts and circumstances. Revenue has accepted the identical expenses incurred by the assessee in the other assessment years, more particularly in the assessment years 2007-08 to 2012-13. As such these assessment years, the disallowance was made on account of non-deduction of TDS under section 195 of the Act. Thus it can be inferred that the question of arm length and business expediency does not arise in the given facts and circumstances. Accordingly we do not find any merit in the grounds of appeal raised by the revenue. Hence the ground of appeal of the revenue is dismissed. TDS u/s 195 - payment of commission expenses - HELD THAT:- We find that the learned CIT (A) has deleted the addition made by the AO after having reliance on the order of his predecessor for the assessment year 2011-12 wherein the issue was related to the TDS - we find that authorities below have not adjudicated the issue in terms of the directions issued by the ITAT which was binding upon them. Therefore, we are of the view that the issue raised by the revenue for non-deduction of TDS does not require any separate adjudication. Thus we dismiss the same as infructuous.
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