TMI Blog2015 (6) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... ails to prove the payments to have been accrued, arisen or paid in India so as to make it taxable under provision of the Act. Thus we hold that the assessee was not liable to deduct TDS qua abovestated commission paid to its non resident payees. Accordingly, the CIT(A)'s findings stand affirmed. - Decided in favour of assessee. - I.T.A. No.478/Mds/2013 - - - Dated:- 25-4-2014 - A.MOHAN AND S.S. GODARA, JJ. For the Appellant : Guru Bhashyam. For the Respondent : S. Sridhar. ORDER:- PER : S.S. GODARA This Revenue's appeal for assessment year 2009-10; arises from order of the Commissioner of Income Tax (Appeals)-IX, Chennai dated 28.12.2012, passed in ITA No.276/11-12, in proceedings under section 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted on ,it as according to the assessee, Circular No.786 of CBDT approved the act of', Non-compliance by the assessee. The assessee had failed to deduct TDS on this payment on the pretext that the transactions are treated under exempted category, vide Circular No. 786 of 2000 which exemplified the correctness of the contents and Intention pronounced in Circular No.23 of 1969., However, Circular No. 7/2009: dated 22-10-2009 had made both Circular No.23 dated 23-07-1969 and Circular No. 786 dated 07-02-2000 redundant and inapplicable on its withdrawal vide Circular No. 7/2009 by the Central Board of Direct Taxes. The commission income under consideration, in the absence of the immunity granted vide Circular N023 dated 23-07-1 969 is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and held that the situs of the payer and the situs of the utilization of the services which determine the taxability of the such services in India is not relevant as long as the services 9re utilized in India and thereby invoked the provisions u/s 40(a)(ia) of the I.T. Act. The appellant company has paid Commission to its overseas agent for the purpose of procuring orders abroad which is in the nature of commission payment. . As the services are rendered outside India the provisions of section 5 cannot bE1 accepted to the commission paid so as to make it taxable in India. Further, 'in order to attract section 195, the services by the non resident agent should have been rendered in India and also should have been used in India. It is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the AY 2005-06 in ITA no. 250/Mds/2010 dated 16/12/2010 and in ITA no. 163/Mds/2012 dated 27/07/2012 for the AY 2003-04 had held this issue in favour of the appellant. 6.2 Since the facts of the appellant case are similar to that of the cases mentioned supra, respectfully following the decisions in the above cases, I am of the opinion that the commissions received by the non resident agent cannot be said to have accrued or arisen to the payee in India and therefore the appellant company is not under obligation for withholding of tax u/s 1~.5 on the abovesaid amount of ₹ 58,80,824/-. Therefore the AO is not justified in making the disallowance of ₹ 58,8.0,824/- u/s 40(a)(i) of the Act and hence the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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