TMI Blog2015 (3) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee engaged the services of non-resident agent to procure export orders and paid commission. That apart, the Commissioner of Income-tax (Appeals) as well as the Tribunal have correctly applied the principle laid down in GE India Technology Centre (P.) Ltd.'s case, [2010 (9) TMI 7 - SUPREME COURT OF INDIA] to hold that the assessee is not liable to deduct tax at source when the non-resident agent provides services outside India on payment of commission. - Thus the services rendered by the non-resident agent can at best be called as a service for completion of the export commitment and would not fall within the definition of fees for technical services, we are the firm view that section 9 of the Act is not applicable to the case on hand and, consequently, section 195 of the Act does not come into play. Also see Faizen Shoes case [2014 (8) TMI 170 - MADRAS HIGH COURT]- Decided in favour of assessee. - T.C.A. NO. 92 OF 2015 - - - Dated:- 2-3-2015 - R.Sudhakar And S.Vimala JJ. For the Appellant : Mr. M.Swaminathan For the Respondent : None JUDGMENT (DELIVERED BY R.SUDHAKAR, J.) Aggrieved by the order passed by the Tribunal in dismissing the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l filed by the assessee. The relevant portion of the order of CIT (Appeals), is extracted hereunder, for better clarity :- 5.1 Therefore, I am of the considered view that the assessee could not be put in a position where it can be visited with the rigours associated with non-deduction of tax at source. It cannot be fastened with any liability associated with non-deduction of tax at source on such payments. Keeping in view of the various judicial pronouncements mentioned supra and respectively following the ratios held in the above case laws as well as considering various submissions made by the AR of the appellant, the commission paid by the appellant does not constitute income in the hands of the non-resident agents and does not come within the purview of Sec. 195. The appellant neither received any services such as managerial, technical from the foreign agents except procurement of orders on commission basis which is received abroad constituting income in the hands of the agents accruing and arising outside India. Thus the relationship between the appellant and the agents is contractual and entire service is provided outside India and duly compensated by way of commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n agreement made on or after the 1st day of April, 1976, shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date. Explanation 2.For the purposes of this clause, 'fees for technical services' means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head 'Salaries'. (2) Notwithstanding anything contained in sub-section (1), any pension payable outside India to a person residing permanently outside India shall not be deemed to accrue or arise in India, if the pension is payable to a person referred to in article 314 of the Constitution or to a person who, having been appointed before the 15th day of August, 1947, to be a Judge of the Federal Court or of a High Court within the meaning of the Government of India Act, 1935, contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 10. While dealing with section 9(1) of the Act, the Supreme Court in CIT v. Toshoku Ltd. [1980] 125 ITR 525(SC), on considering a transaction where tobacco was exported to Japan and France and sold through non-resident assessees who were paid commission, held as under : 8. The second aspect of the same question is whether the commission amounts credited in the books of the statutory agent can be treated as incomes accrued, arisen, or deemed to have accrued or arisen in India to the non-resident assessees during the relevant year. This takes us to section 9 of the Act. It is urged that the commission amounts should be treated as incomes deemed to have accrued or arisen in India as they, according to the department, had either accrued or arisen through and from the business connection in India that existed between the non-resident assessees and the statutory agent. This contention overlooks the effect of clause (a) of the Explanation to clause (i) of sub-section (1) of section 9 of the Act which provides that in the case of a business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by us on the earlier issue that the services rendered by the non-resident agent can at best be called as a service for completion of the export commitment and would not fall within the definition of fees for technical services, we are the firm view that section 9 of the Act is not applicable to the case on hand and, consequently, section 195 of the Act does not come into play. In view of the above finding, the decision of the Supreme Court in Transmission Corporation of A. P. Ltd.'s case, referred to supra, relied upon by the learned standing counsel for the Revenue is not applicable to the facts of the present case. We find no infirmity in the order of the Tribunal in confirming the order of the Commissioner of Income-tax (Appeals). The above decision of this Court in Faizen Shoes case (supra) is squarely applicable to the facts of the present case. 7. In the result, this Court finds no reason to interfere with the order passed by the Tribunal. No question of law, much less substantial question of law arise for consideration in this appeal. Accordingly, the order passed by the Tribunal is confirmed and this appeal is dismissed. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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