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TMI Blog2015 (12) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,17,47,291/- made on account of agency dealership commission which was disallowed by the AO for the reasons detailed therein, as such , for not deducting TDS while paying the said commission and attracted the Section 40(a)(ia) of the Act for violation of the same. Therefore, the only issue falls for our consideration, whether the Ld.CIT-A justified in deletion of the addition made by the AO under Section 40(a)(ia) of the Act 3. Brief facts of the case are that the assessee is a company engaged in the business of manufacturing and selling of diesel Hydraulic, Electric cranes, Forklift trucks and Generators. During the period under consideration the Assessee exported flame proof Forklift trucks and its spare parts to Ministry of Oil, Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed by the law. Further, the income of a Non-resident is not taxable in India and that a foreign agent of Indian exporter operates in his own country and no part of his income tax in India and such an agent is not liable to income tax in India on the commission in pursuance of the Circular No:786 dt:07-02-2000 issued by the CBDT clarifying that no tax is deductible u/s. 195 of Act. Thereby, the Ld. CIT(A) deleted the addition made by the AO as observing as under: "I have perused the assessment order and considered the submission of the appellant. In view of the fact that on the same ground in the earlier A.Y. i.e.2004-04 the HON'BLE ITAT, Kolkata 'B' Bench has deleted the entire disallowance made by the AO and upheld by the CIT(A), after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces relating to the transactions it had with the party who procured the above said goods for food for Oil programme and all the payments were routed through valid channels by way of Banks where it is shown that the expenditure by way of commission incurred in relation to business, having relevant material on record and accepting the same as genuine transactions, but, however, basing on a report which is not part of the assessment, disallowing the claim is unjustified. With reference to the Circular No:786 dt:07-02-2000 issued by the CBDT it is very clear that no tax is deductible u/s 195 of Act on export commission and related charges payable to a non-resident for services rendered outside India is an allowable expenditure. A coordinate Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sive or unreasonable. In any case, there is nothing on record to show that the full amount as claimed by the appellant company was not actually paid or that some part of it was routed back to the appellant company or its Directors in an indirect or underhand way. Therefore there is no case for disallowing the commission payment in this case from any angle whatsoever. Taking into consideration all these aspects, we hold the Commission payment under consideration is fully allowable. We, therefore, reverse the orders of the lower authorities and delete the entire disallowance in this regard." 7.1 Therefore, In the light of observations of above, we deem it proper to hold that the payment of commission to a agent outside India is a business e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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