9911796707
TMI Blog2013 (12) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... ny of the assessee in USA. 3. Facts apropos are that assessee, engaged in the business of manufacturing and selling of tractors and farm equipments, had filed its return for the impugned assessment year declaring an income of Rs. 17,71,86,570/-. During the course of assessment proceedings, it was noted by the Assessing Officer that assessee had debited a sum of Rs. 163.05 lakhs as commission to selling agents. From the break-up, Assessing Officer noted that this included a sum of Rs. 28,91,685/- paid as commission to selling agents. Assessee had not effected any deduction of tax at source on the said amount. When called for the explanation, reason for non-deduction of tax given by the assessee was that the activities of the selling agents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... USA had no business connection or permanent establishment in India. Insofar as reimbursement of expenditure to the offices at Belgrade, Vienna and London was concerned, argument of the assessee was that these were also purely reimbursements of expenditure incurred. Since these were reimbursements of expenditure, assessee argued that there was no necessity to deduct any tax at source. 6. However, Assessing Officer was not impressed. According to him, the nature and services rendered by M/s TAFE Inc., USA brought it clearly within the ambit of "fee for technical services". Similarly, the reimbursements of expenditure to the offices at Belgrade, Vienna and London were also found to fall in the category of consultation service. According to A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements were routine outgo like rent, telephone charges, stationery, etc. 9. Ld. CIT(Appeals) was appreciative of the contentions of the assessee. He held that by virtue of the decision of Hon'ble Apex Court in the case of GE India Technology Centre (P.) Ltd. (supra), the remittances did not result in any accrual of income to the non-residents to be liable for tax in India. He held that Section 40(a)(i) could not be applied and deleted the disallowance. 10. Now before us, Shri Suneel Verma, appearing for Revenue, strongly assailing the order of CIT(Appeals), submitted that the CIT(Appeals) had not examined the agreement entered between assessee and non-residents, nor with M/s TAFE Inc., USA. Ld. CIT(Appeals) had simply came to a conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., USA were considered as technical services, it fell within the ambit of Double Taxation Avoidance Agreement between India and USA. According to him, unless technical services were made available by M/s TAFE Inc., USA to the assessee, it would not fall within the purview of taxability. Similar was the case with reimbursements of expenditure with regard to offices of the assessee at Belgrade, Vienna and London. Therefore, according to learned A.R., CIT(Appeals) was justified in deleting the disallowance made by the A.O. under Section 40(a)(i) of the Act. 12. We have perused the orders and heard the rival submissions. Insofar as payment of Rs. 28,91,685/- to M/s Wallace Cartwright & Co. is concerned, we find that none of the authorities hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement between India and USA was not verified. Similar is the case of reimbursements of expenditure to Belgrade, Vienna and London offices. 14. Considering all the above aspects, we are of the opinion that the matter requires a fresh look by the Assessing Officer. We, therefore, set aside the orders of authorities below and remit the issue regarding requirement of deduction of tax at source on payments made to M/s TAFE Inc., USA, M/s Wallace Cartwright & Co., Tunisia and to offices of the assessee in Belgrade, Vienna and London, back to the file of the A.O. for consideration afresh in accordance with law. 15. Ground Nos.2 and 3 are allowed for statistical purposes. 16. Vide its ground No.4, grievance raised by the Revenue is that the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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