Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 532 - ITAT CHENNAI

2015 (10) TMI 532 - ITAT CHENNAI - TMI - Revision u/s.263 - AO failed to examine the relevant documents/agreement along with the correspondence and other evidences to determine whether the income is chargeable under the provisions of sec.9(1)(vii) read with relevant provisions of the DTAA and the Assessing Officer has not verified the purchase orders along with correspondences with M/s. Tarun Anvil Corporation, USA. - Held that:- Sec.195(1) prescribes that tax has to be deducted while making pay .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not discharged the burden cast upon it to show the nature of services rendered by non-resident agent. If there are services rendered by non-residents, who have no permanent establishment in India or have any business connection in India, by virtue of which the payment of commission accrued or arose in India then, it is exempted, if the assessee is able to prove that the services were rendered by those non-residents at abroad. In the present case, the assessee has not established the facts on rec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sales commission towards procurement of orders from abroad. Accordingly, the entire issue is remitted back to the file of the AO for fresh consideration and the AO is directed to make necessary enquiry regarding the nature of services rendered by the non-resident agent and the payments made thereof. - Decided in favour of assessee for statistical purposes. - ITA No. 848/Mds/2015 - Dated:- 28-8-2015 - SHRI CHANDRA POOJARI AND SHRI V. DURGA RAO, JJ. For The Appellant : Shri T. Vasudevan, Advocate .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

greement along with the correspondence and other evidences to determine whether the income is chargeable under the provisions of sec.9(1)(vii) of the Act read with relevant provisions of the DTAA and the Assessing Officer has not verified the purchase orders along with correspondences with M/s. Tarun Anvil Corporation, USA. 3. The ld. AR submitted that the Commissioner of Incometax erred in his finding that the assessment order dated 27-03- 2013 passed under section 143 (3) by the Income-tax Off .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ee had availed of technical services from M/s. Tarun of Anvil Corp. USA and utilized the same in India for the manufacturing of specified garments, without even mentioning in his order as to what the services were and the services rendered by M/s. Tarun of Anvil Corp. USA falls within the scope of Explanation to section 9 (1) (vii) of the Income-tax Act, 1961 and that for the purpose of taxability in India there is no need that the non-resident should have PE or business connection in India and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e passing the assessment order and the Commissioner of Income-tax failed to note that the Assessing Officer had issued a questionnaire through her letter dated 25-10-2012 in which she had specifically called for explanation from the assessee as to why tax was not deducted at source on overseas commission payment of ₹ 54,93,841. The ld. AR further submitted that the Commissioner of Income-tax also failed to note that in the said letter dated 25- 10-2012 the assessee had been called upon to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hall not be disallowed u/s., 40 (a) (ia) and also failed to note these issues were explained and the documents were furnished to the Assessing Officer by the assessee's authorized representative during hearing of the assessment. 3.3. The ld. AR further submitted that the Commissioner of Income-tax failed to note that the Assessing Officer had issued another letter dated 31-01-2013 in which she had called for original purchase vouchers for yarn, textile material, readymade garments, export in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng to the assessee s Counsel, the Commissioner of Income-tax failed to note that during the inspection, the assessee s records for the financial years 2007- 08 to 2012-13 were subjected to scrutiny by the Income-tax Officer (TOS) and on completion of the scrutiny, he had passed an order dated 6-3-2013 specifically stating that the payments made to M/s. Anvil Corporation USA had been verified and TOS provisions were not applicable on these payments. 3.4. Further, the ld. AR submitted that the Com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Anvil Corporation and the labour charges paid locally were allowed by the Assessing Officer without calling for and verifying the facts and circumstances of the case, the agreement and correspondences for the work done etc., and that therefore the assessment order is erroneous and prejudicial to the interests of Revenue. Further, the ld. AR pointed out that CIT has not discussed the various judicial decisions brought to his notice and relied on by the assessee through written submissions in repl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d prejudicial to the interests of Revenue. 3.5. Further, the ld. AR relied on the order of the Tribunal, Chennai Bench in the case of Shri S. Rajagopal v. ITO in ITA No.1647/Mds/2014 dated 27th March, 2015, wherein the Tribunal observed that the order passed by the Assessing Officer becomes erroneous and prejudicial to the interests of the Revenue under sec.263 in the following cases: (i) The order sought to be revised contains error of reasoning or of law or of fact on the face of it. (ii) The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e. Thus, he submitted that there was no error in the order of the AO, as the AO carried out detailed enquiry before coming to the conclusion that the provisions of TDS are not applicable to the payment made to M/s. Tarun Anvil Corporation, USA towards commission. He has also drew our attention to the order passed by the ITO, TDS, Ward-I(1), Coimbatore dated 6.3.2013, wherein it was observed in similar circumstances that foreign commission paid to M/s. Tarun Anvil Corporation, USA was verified an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

TDS on that payment and to that effect, the assessee has placed a letter of Anvil Corporation, without having no date, where it is confirmed that they procured orders from Billabong Group of Companies as an agent on behalf of the assessee. On the other hand, the contention of the ld. DR is that there is no need that non-resident should have PE or business connection in India and rendered services in India and it is enough that the services are utilized in India to assess the fees for technical s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the conclusion that the assessee is not liable for deduction of TDS in respect of payment of commission to M/s. Tarun Anvil Corporation, USA and he has not carried out any independent enquiry. The order of the ITO, Coimbatore has no basis on which he came to the conclusion that the payment made to M/s. Tarun Anvil Corporation, is not liable for TDS. Being so, the CIT assumed jurisdiction u/s.263 of the Act, to see whether the payment made to M/s. Tarun Anvil Corporation, USA is liable for TD .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

diture claimed by the assessee cannot be allowed. Sec.195(1) prescribes that tax has to be deducted while making payment to non-resident, which is chargeable under the provisions of the Act. Therefore, the condition precedent for deduction of tax is that the income must be chargeable under the provisions of the Act. In the present case, the assessee has not produced relevant agreement entered into with that foreign agent to show that they were appointed to act as commission agents outside India .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version