TMI Blog2015 (12) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has not established the facts on record that the non- resident has rendered services abroad and there is no business connection in India by producing relevant records, viz., either agreement entered into by the assessee with them or the correspondence took place between the parties. Without examining these details, we are not in a position to decide the nature of services rendered by the non-resident agent. Therefore, it is appropriate to remit the entire issue back to the file of the Assessing Officer with direction to the assessee to prove that it was sales commission towards procurement of orders from abroad. - I. T. A. Nos. 139 and 140 /Mds/ 2015 (assessment years 2004-05 and 2008-09). - - - Dated:- 16-10-2015 - CHANDRA PO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. 4. The learned Commissioner of Income-tax (Appeals), on the facts of the appellant's case, erred in law in confirming the disallowance of interest on the grounds that there was no commercial expediency. The Commissioner of Income-tax (Appeals) ought to have seen that the reasoning of the Assessing Officer in disallowing the interest paid to the bank on the overdraft facility availed of is not sustainable and the said reason was only an assumption of the Assessing Officer. Besides the Commissioner of Income-tax (Appeals) erred in not appreciating the contention that the Assessing Officer has failed to establish any nexus to the said overdraft facility availed of from the bank and the interest-free amount advanced. The Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion payment and debit balances. 9. Copy of interest Income-tax issues relating to tax deduction in respect of payment made to or by foreign firms and copy of Circular No. 786. 10. Income-tax assessment order under section 143(3) dated December 29, 2009. 11. Copy of Form 35, statement of facts and grounds of appeal. 8. The learned authorised representative submitted that the above documents were filed before the Assessing Officer, who had not gone through it. Hence, the learned authorised representative pleaded that the same documents are filed before the Tribunal for proper adjudication of the above grounds. Admittedly, these additional evidences were produced before the lower authorities, which were not examined by them. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be read with section 195 of the Act. According to the learned authorised representative, the Commissioner of Income-tax (Appeals) has failed to note that the reasoning of the Assessing Officer in rejecting the payment of commission to the non-resident and adding the same under section 40(a) of the Act is not sustainable in law and on the facts and circumstances of the assessee's case. Further, he submitted that the Commissioner of Income-tax (Appeals) ought to have seen that section 195(5) read with Circular No. 10 of 2002 dated October 9, 2002 ([2002] 258 ITR (St.) 9 ), based on which the Assessing Officer disallowed the commission payment has no applicability in this case. According to the learned authorised representative, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company or to a foreign company on which tax is deductible at source. Therefore, the first condition required to be fulfilled is the payment must be chargeable under the Act, thereafter the question of deduction of tax will arise. Section 195(1) of the Act also 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 the income must be chargeable under the provisions of the Act. In the facts of the present case, the assessee has not produced the agreement entered into by the assessee with foreign agents to show that they were appointed to act as commission agents outside India in their respective countries. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of services rendered by the non-resident agent and the payments made thereof. With these observations, the appeal is partly allowed for statistical purposes. 16. Now, we take up the assessee's appeal in I. T. A. No. 140/Mds/2015. The only issue in this appeal is with regard to disallowance of payment of ₹ 1,37,090 made to non-resident towards commission. 17. We have decided this issue for the assessment year 2004-05 vide para 15 of this order. Accordingly, we remit this issue to the file of the Assessing Officer for fresh consideration with the same directions. 18. In the result, the assessee's appeal in I. T. A. No. 139/Mds/15 is partly allowed for statistical purposes and I. T. A. No. 140/Mds/15 is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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