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DCIT, Circle-1, Kolkata Versus M/s. TIL Limited

2015 (12) TMI 1286 - ITAT KOLKATA

TDS u/s 195 - Disallowance u/s 40(a)(ia) - payment of commission to a agent outside India - CIT(A) deleted the addition - Held that:- In the present case, the asseessee produced all the evidences 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 o .....

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oper to hold that the payment of commission to a agent outside India is a business expenditure is allowable and we confirm the order passed by the Ld. CIT(A).- Decided in favour of assessee. - ITA No. 338/Kol/2013 - Dated:- 10-12-2015 - Shri M. Balaganesh, A.M. & Shri S.S.Viswanethra Ravi, J.M. For The Appellant : Shri Uday Kr. Sardar, JCIT For The Respondent : Shri Saurav Kedia, CA ORDER Per Shri S.S.Viswanethra Ravi, J.M. This appeal is filed by the Revenue against the order dated 06.11.20 .....

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ted 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 .....

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1,17,47,291/- out of the total ₹ 3,61,75,033/- being goods value exported to Ministry of Oil, Baghdad, apart from non compliance of Section 40(a)(i) Act, as discussed above, the AO also, was of the view that the name of the assessee being figured in the Volker commission report and with reference to the payment towards commission were not authorised by the UN, but, however, admitted to the fact that the assessee produced all the relevant material evidencing the agreement referring the natu .....

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essee which is against to the settled principles established 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 A .....

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e Revenue filed this appeal before this Tribunal. The Ld. DR submitted that the name of the assesee is figured in the Volker committee report constituted to examine transactions with reference to the FOOD for OIL programme with IRAQ relating to the kick backs said to have been exchanged between the parties and such transactions were not approved by the UN and relied on the AO s order and prayed to allow the appeal. In reply the AR contended that the assessee submitted all the agreements concerni .....

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the assessee s own case for A.Y 2003-04 7. Heard the representatives of both sides, perused the relevant material on recorded as well as the orders of both lower authorities and considered the submissions and circular and case laws relied on, In the present case, the asseessee produced all the evidences 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 .....

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India is an allowable expenditure. A coordinate Bench of ITAT at Kolkata B Bench, Kolkata in the assessee s own case for A.Y 2003-04 by an order dt:30-03-2007 in ITA 281/Kol/2007 decided the same identical issue in favovour of the assessee. The relevant portion of such order is at para 6.21 is reproduced as under: As discussed earlier the stand taken by the learned CIT(A) that in the absence of deduction of tax at source from the payment it is hit by the provisions of section 40(a)(ia) of the Ac .....

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