9911796707
TMI Blog2013 (7) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... cts apropos are that assessee engaged in manufacture and export of shoe uppers had filed its return for the impugned assessment year declaring an income of `34,30,706/- . During the course of assessment proceedings, Assessing Officer noted that assessee had paid a sum of `60,79,855/- as overseas agents commission. Assessee was required to clarify whether any tax deduction at source were done on such payments. Reply of the assessee was that such agents were procuring orders abroad on commission basis, from non-residents located abroad. As per the assessee, these agents were not having any establishment in India. Reliance was also placed on CBDT Circular No.786 dated 07.02.2000 and CBDT Circular No.7 of 2009 dated 22.10.2009. However, Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any deduction of tax under section 195 of the Act. As per the Ld.CIT(A), services rendered by the foreign agents were in foreign countries and there were no services rendered by such agents for the assessee in India. He, therefore, deleted the disallowance. 5. Now before us, ld. D.R. strongly assailing the order of CIT(A), submitted that there was nothing on record to show overseas agents concerned were not having an establishment in India. Assessee had not produced the tax residency certificate of such agents. There was no certification from any authority of the foreign state, which could show that these agents were not having a permanent establishment in India. Assessee also could not show that payments were covered under any Double Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any case, there is no dispute that the agents were canvassing sales for the assessee for customers abroad. Similar disallowance made in the hands of M/s.Farida Shoes Pvt Ltd. and M/s.Farida Prime Tannery Pvt. Ltd.,had come up before this Tribunal on Revenue's appeal. These concerns were also engaged in the same business of leather uppers like the assessee. This Tribunal in its order dated 11.04.13 in ITA Nos.359 & 360/Mds./13 had held as under:- "10. We have heard both sides, perused the materials available on record and case law cited. In this case, the assessee has made certain payments to overseas agents as commission and no TDS was deducted. According to the Assessing Officer, the assessee's business is situated in India and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The head note of order is reproduced hereunder: "Section 9 of the Income-tax Act, 1961 - Income - Deemed to accrue or arise in India Assessment year 2007 -08 - Assessee-company was engaged in business of development and export of software - During relevant assessment year, it had paid commission to its British parent/holding company ETUK on sales and amounts realized on export contracts procured by ETUK for assessee - Assessing Officer held that commission income earned by ETUK had accrued in India or was deemed to accrue in India and, therefore, assessee was liable to deduct tax at source therefrom and as there was failure, said expenditure should be disallowed under section 40(a)(ia) - Whether when ETUK was not rendering any service or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sident agent did not accrue or arise in India and thus, there was no need for deducting TDS under section 195 of the Act. 14. In the present case, the assessee paid certain amounts to overseas agents for procurement of export orders. The agents have not provided any managerial/technical services. The payments received by the non-resident Indian are not taxable in India. Taking into consideration of entire facts and circumstances and by following aforesaid decisions, we are of the opinion that the issue involved in this appeal is covered in favour of the assessee and section 195 have no application to assessee's case. Accordingly, the appeal of the Revenue is dismissed. " Thus, assessee had every reason to hold a bona fide belief that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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