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2021 (4) TMI 93 - HC - Income TaxTDS u/s 195 - commission paid outside India - disallowance made u/s 40(a)(i) - Tribunal setting aside the disallowance made u/s 40(a)(i) by holding that the income of the non-residents by way of commission cannot be considered as accrued or arisen or deemed to accrue or arise in India as the services of such agents were rendered or utilized outside India and the commission was also paid outside India - HELD THAT:- In case of GE India Technology Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT] as dealing with remittance of royalty of purchase prices of subsidiary delivered by the foreign party. It was held that if the payment is made by the resident to the non-resident was an amount which was not chargeable to tax in India, then no tax is deductible at Source even though the assessee had not made an application under Section 195(2) of the Act. A reliance has also been placed upon the judgment delivered in the case of Exotic Fruits Pvt. Ltd. [2013 (10) TMI 826 - ITAT BANGALORE]and the judgment delivered by the Income Tax Appellate Tribunal is in favour of the assessee. Keeping in view the totality of the circumstances of the case, this Court is of the considered opinion that in the present case the Associated Enterprises has rendered services out of India in the form of placing orders with the manufacturers who are already outside India. The commission was paid to Associate Enterprises out of India. No taxing event has taken place within the territories of India and therefore, the Tribunal was justified in allowing the appeal of the assessee.
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