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A.C.I.T. 19 (3) , Mumbai Versus M/s Pahilajrai Jaikishin and M/s Pahilajrai Jaikishin Versus D.C.I.T. 19 (3) , Mumbai

Disallowance u/s 14A - whether interest payable to partners on their capital u/s. 40 (b) is an expenditure of the firm instead of holding same as an allowance claimed by the assessee & therefore and does not fall within the ambit of section 14-A. ? - Held that:- We hold that ‘expenditure’ as envisaged by Section 14A of the Act, duly include interest paid to the partners by the assessee firm if the same is incurred in relation to the income which is not includible in the total income u/s Section .....

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ome which does not form part of the total income of the assessee firm under the Act , and shall be allowed as deduction from the dividend income from Mutual Funds earned by the assesse firm as envisaged u/s 14A of the Act and shall go to reduce the exempt income earned by the assessee firm from dividend income from Mutual Funds as computed by the AO after applying provisions of Section 14A of the Act read with Rule 8D of Income Tax Rules, 1962 or in other words we uphold the disallowance of inte .....

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d with Section 2(24)(ve) of the Act after including the afore-said interest income in the hands of the partners.

Further, the AO has computed disallowance of ₹ 20,357/- under Section 14A of the Act read with Rule 8D(2)(i) of Income Tax Rules, 1962 being direct expenses incurred by the assessee firm having being incurred on STT paid of ₹ 18,633/- and PMS charges of ₹ 1,724/- paid to portfolio managers which is admitted to be paid by the assessee firm in relation to th .....

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-09 by Hon’ble Bombay High Court in the case of Godrej and Boyce Manufacturing Limited (2010 (8) TMI 77 - BOMBAY HIGH COURT). - Decided against assessee

TDS u/s 195 - disallowance u/s 40a(ia) - whether the assessee was using the services of overseas commission agent for procuring export orders and not for providing managerial/technical services attracting TDS? - Held that:- Keeping in view the facts and circumstances of the instant appeal , the assessee firm is entitled for deduction .....

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ns of Section 9 of the Act - Decided against revenue - I.T.A. No.1562/Mum/2014, I.T.A. No.994/Mum/2014 - Dated:- 1-2-2016 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Revenue : Shri C.W. Angolkar For The Appellate : Shri P. Daniel ORDER Per Ramit Kochar, Accountant Member: These are cross appeals by the assessee firm and the Revenue directed against the Order by the learned Commissioner of Income Tax (Appeals)-30, Mumbai ( CIT(A) for short) date .....

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n totality as well case law relied upon by the appellant. 2. Without prejudice to the above the appellant submits that Learned CIT (A) has erred in confirming the disallowance merely on the ground that in appellants' case Learned CIT(A) (his predecessor) for Assessment Year 2009- 10 had confirmed the similar disallowance in an order for Assessment Year 2009-10 without appreciating that (i) Appellant was in appeal against said disallowance before Hon'ble ITAT which appeal was pending. (ii .....

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4. The Appellants crave leave to add, amend alter and / or vary any of the grounds at the time or before the hearing of this appeal. 5. The Appellants therefore pray that disallowance of ₹ 15,36,264/- uls. 14 A made by the Learned Assessing Officer & confirmed by the Learned CIT (A) may please be deleted. 3. The brief facts of the case are that the assessee firm is a partnership firm engaged in the business of manufacturing , trading and export of textile goods. 4. During the course o .....

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ares etc. , income there-from would be exempt from tax. While in the Profit & Loss a/c the assessee firm has claimed several expenses including interest expenses. However, no expenditure has been disallowed by the assessee firm in relation to earning of exempt income in the computation of income. The assessee firm was asked to explain that why disallowance should not be made u/s 14A of the Act read with Rule 8D of Income Tax Rules, 1962. The assessee firm submitted that only expenses debited .....

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onsidered as an expenditure in the hands of assessee firm for the purpose of section 14A of the Act as has been clarified by Hon ble Apex Court in the case of CIT v. Walfort Share & Stock Brokers (P) Ltd (2010) 326 ITR-1(SC) wherein the Hon ble Supreme Court held that expenditure referred to in Section 14A of the Act refers to expenditure on rent, taxes, salaries, interest etc in respect of which allowances are provided for u/s Section. 30 to 37 of the Act and every payout is not entitled to .....

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ow the line. In this case of partnership firm , profit(loss) is arrived at before paying interest and remuneration to partners which is considered as actual profit earned by a firm and it is only thereafter that the interest and/or profit is payable to partners. The assessee firm relied upon decision of the Ahmedabad Tribunal-Special Bench in the case of Sh. Vishnu Anant Mahajan v. ACIT in ITA No. 3002/Ahd./2009 dated 25-05-2012 to contend that depreciation was held to be statutory allowance and .....

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direct and indirect expenditure incurred in relation to income which does not form part of total income. The assessee firm has invested in shares and mutual funds whose income would be exempt from tax. The assessee firm has received dividend income which is exempt from tax. The assessee firm has incurred interest on borrowed fund to the tune of 1.39 crores. The assessee firm has shown investment in mutual funds to the tune of ₹ 4.75 crores whose income would be exempt in the hands of the .....

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assessment orders dated 07-03-2013 passed u/s 143(3) of the Act by the AO, the assessee firm filed the first appeal before the CIT(A) and contended that no expenditure has been incurred in earning of exempt income or even if the expenditure is incurred for earning an exempt income, it is not claimed as and by way of deduction while computing the total income , so the provision of Section 14A of the Act are not attracted in such case. The assessee firm submitted that it has received the dividend .....

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essment year 2006-07 to 2008-09, but in the assessment year 2009-10 , a sum of ₹ 11,73,949/- was disallowed by the AO and confirmed by the CIT(A), against which the appeal is pending before the Tribunal . The CIT(A) held that for the assessment year 2009-10 , The CIT(A) has held that the AO was justifying in invoking the provisions of Section 14A of the Act and working out disallowance as per the Rule 8D of Income Tax Rules, 1962 for which adequate reasons has been given by the AO and Rule .....

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e assessee firm reiterated its submissions as made before the authorities below which are not repeated for sake of brevity. The assessee firm also submitted that disallowance of the interest paid on partners capital is to be deleted as the same is not covered u/s. 14A of the Act as the issue is squarely covered by the decision of Mumbai Tribunal dated 11.03.2015 in assessee firm s own case in the immediately preceding assessment year i.e. 2009-10 in ITA No. 6870/Mum/2012. The assessee firm conte .....

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the Act on account of interest expenditure which is not on the borrowed fund but on the capital contributed by the partners. 9.The ld. DR on the other hand relied upon the orders of the authorities below. 10. We have considered the rival submissions and perused the material on record including case laws relied upon. We have observed that the Mumbai Tribunal in ITA No. 6870/Mum/2012 in the assessee s own case for the assessment year 2009-10 has held as under:- We have considered the rival submiss .....

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is exempt in their hands. Therefore, when there is a direct relation between the share in the profit of the firm and the interest on capital account then the said interest cannot be treated as an expenditure to be attributable for earning the dividend income. Accordingly, in the facts and circumstances of the case, we delete the addition to the extent of disallowance u/s 14A on account of interest expenditure which is not on the borrowed fund but on the capital contributed by the partners. Accor .....

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the partners u/s 28(v) of the Act ?. Whether it is an expenditure as is referred to in Section 14A of the Act incurred and attributable to in relation to earning of an exempt income?. Whether it falls within the definition of Section 36(1)(iii) of the Act being an expenditure or it falls u/s 40(b) of the Act being an statutory allowance claimed by the assessee and therefore does not fall within ambit of expenditure as envisaged under Section 14A of the Act ? . The Mumbai Tribunal in ITA No 6870 .....

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l of the partners and hence the interest cannot be treated as an expenditure to be attributable for earning the dividend income . The Tribunal vide its orders dated 11.03.2015 has deleted the addition to the extent of disallowance u/s 14A of the Act on account of interest expenditure which is not on the borrowed fund but on the capital contributed by the partners. , while the rest of disallowance as computed under Section 14A of the Act read with Rule 8D of Income Tax Rules,1962 was affirmed by .....

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Corporation v. CIT (2008) 168 Taxman 43(SC) : 298 ITR 298(SC). 2. Ahmedabad Tribunal decision in the case of Shankar Chemicals Works v. DCIT (2011) 12 taxmann.com 461(Ahd.). While the assessee firm , inter-alia, brought to the notice of the Tribunal, decision of Hon ble Supreme Court in the case of CIT v. R.M.Chidambaram Pillai (1977) 106 ITR 292(SC) which is a decision pronounced by Hon ble Supreme Court on 17th November 1976, which is a decision rendered prior to major and substantial amendmen .....

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settled the controversy , brought in by the substantial amendments made by the Finance Act,1992. We are also fully aware that law declared by Hon ble Supreme Court is binding on all courts within the territory of India under Article 141 of Constitution of India which is binding on us and we are bound to follow the same. In the case of CIT v. Smt. Godavari Saraf [1978] 113 ITR 589 (Bom.), the Bombay High Court held that the Judgment of non-Jurisdictional High Court was binding on the Tribunal if .....

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bove background , we are now proceeding to adjudicate the issue in this appeal which, in our considered view, majorily deals purely with a legal issue being question of law as detailed by us. The assessee firm has raised capital from the partners, on which interest of ₹ 1.39 crores was paid. The assessee firm has made investments in Mutual Funds to the tune of ₹ 4.75 crores , income of which would be exempt from tax. The AO by invoking Section 14A of the Act read with Rule 8D of Inco .....

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the Income-tax Act, 1961 pertaining to taxation of partnership firms. One of the major changes effected was that the remuneration and interest paid to a partner were made allowable deductions in calculation of the firm s taxable income, while on one hand, firms were subjected to tax at the maximum marginal rate. In order to allow these deductions of remuneration and interest to partners, section 40(b) of the Act was reframed. Under the present scheme of taxation of partnership firms, the firm i .....

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is scheme of taxation of partnership, which was introduced in the Act, by the Finance Act, 1992 with effect from April 1, 1993, has been designed with a view to avoid double taxation of the same income both in the hands of the firm and its partners. A partnership firm is accorded a distinct status assessable to tax as a separate entity under the Income-tax Act, 1961. Under section 2(23) of the Act, the terms firm , partner and partnership have the same meaning as in the Indian Partnership Act, 1 .....

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gal position as it existed prior to the amendment made by the Finance Act, 1992, was that any amount paid as remuneration to the partners, whether called salary, bonus, commission or by any other name and interest paid to partners, was required to be disallowed and added back to the income of the partnership firm under the provision of section 40(b) of the Act of the preamended Act. The result was that any payment so made was, on the one hand, disallowed in the hands of partnership firm while, o .....

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bed for payment of interest on the capital contributed by the partners or loan advanced by them to the firm has been prescribed at 18 per cent per annum (now reduced to 12 per cent per annum ) while salary, commission or any other remuneration payable to the partners has been limited to the specified percentage of book profit. The Finance Act, 1992 inserted a new clause (v) in section 28 of the Act which enumerates classes of income which are chargeable to income-tax under the head Profits or ga .....

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its of a business carried on by all or any one of them acting for all. Persons who have entered into partnership are individually called partners and collectively called a firm. Section 4 of the Act provides for the charging of income-tax in respect of total income of the previous year of every person, at the rates prescribed in theFinance Act. Person has been defined under section 2(31) to include a firm . By virtue of section 2(23), the words firm , partner and partnership have the same meanin .....

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heme, all firms as understood under the Indian Partnership Act are assessed as firms. This type of assessment is available only when the firm fulfils the requirements as stated in section 184 of the Income-tax Act. HISTORICAL BACKGROUND The position under the 1922 Act was that where a firm was unregistered, the tax payable by the firm itself was determined, as in the case of any other distinct entity and the levy was made on the firm itself. On the other hand, where a firm was registered, the fi .....

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addition liable to be taxed in their individual assessment in respect of their share in the firm s income. There was, thus, double taxation of the identical income, once in the hands of the registered firm and second time in the hands of the partners on allocation of the firm s income amongst them. This scheme of double taxation was criticized by the Law Commission in its 12th Report, 1958. The position under the 1961 Act was the same as existed after the 1956 amendment under the 1922 Act. Till .....

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ified for registered firms in the schedule. An unregistered firm was taxed at the rates applicable for individuals. By the amendment introduced by the Finance Act, 1992 effective from April 1, 1993, the distinction between registered and unregistered firms has been removed and section 2(39) and section 2(48) of the Act have been omitted. A firm would be taxed as a separate entity and the share of the partner in the total income of the firm will not be included in calculating his total income, by .....

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or the purposes of the Income-tax Act. It is profitable to reproduce here circular no 636 dated 31-08-1992 explaining the changes brought in by The Finance Act,1992 to the scheme of taxation of partnership firm : Finance Act, 1992 Taxation of firm s income 48. Before the changes made by the Finance Act, the system of levy of tax on firms involved double taxation. The firm as such was taxed in respect of its total income at rates varying from 5% to 18% (the maximum rate being applicable at ₹ .....

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s taxed at the rates applicable to individuals, with the share income included in the hands of the partners for rate purposes only. There has been a consistent demand for removal of the double taxation. A new scheme of assessment of firms has been introduced from assessment year 1993-94. The scheme is modelled after the scheme introduced by the Direct Tax Laws (Amendment) Act, 1987, with suitable modifications to take care of the difficulties pointed out in the context of the 1987 scheme. The sc .....

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parate entity (sections 184 & 185). There will be no distinction between registered and unregistered firms, and clauses 39 and 48 of section 2 containing the definition of registered firm and unregistered firm have been omitted. After allowing remuneration and interest to the partners, the balance income of the firms will be subject to maximum marginal rate of tax of income-tax, which will be 40% for assessment year 1993-94. The surcharge on income-tax will be at the rate of 12%, of the tota .....

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ration. 48.2 The share of the partner in the income of the firm will not be included in computing his total income [section 10(2A)]. However, interest, salary, bonus, commission or any other remuneration allowed by the firm to a partner will be liable to be taxed as business income in the partner s hand, [section 2(24)(ve) and section 28(v)]. An Explanation has been added to the newly inserted clause (2A) of section 10 to make it clear that the remuneration or interest which is disallowed in the .....

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payable or paid to a partner [section 40(b)]. Remuneration due to or received by a partner is not to be assessed as income under the head Salaries (Explanation 2 to section 15). Any salary, interest, bonus, commission or remuneration due to or received by a partner in view of clause (v) to section 28 shall be chargeable to income-tax under the head Profits and gains of business or profession . 48.4 The payment of remuneration only to a working partner is allowable [defined in Explanation 4 to s .....

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e said date. However, as the financial year 1992-93 had already commenced, by the time the Bill received the Presidential assent, it would not have been possible for assessees to change the partnership deed with effect from 1-4-1992. Therefore, the Finance Act has provided that for the previous year 1992-93 interest or remuneration would be allowed if the partnership deed provides for such payment any time during the accounting period. Thus for the previous year 1992-93, relevant to assessment y .....

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d terms of the deed may be suitably amended. 48.6 Of the aggregate payment to all partners by way of salary, bonus, commission or other remuneration up to ₹ 50,000 is fully allowable in the hands of the firm. In case the aggregate payment exceeds the limit of ₹ 50,000, certain monetary limits have been prescribed under section 40(b)(v) in the form of a percentage of book profit [defined in Explanation 3 to section 40(b)]. Up to a book-profit of ₹ 1,00,000 or a loss, in the case .....

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w any expenditure, if it is excessive, having regard to the legitimate needs of the business. There have been several representations on this issue. A demand has been raised that this provision should not be used in the case of remuneration paid by a firm to its partners, since a ceiling is already separately provided. The Finance Minister, in his speech dated 30-4-1992 in Parliament during the Budget discussion stated as follows: There seems to be some apprehension that the provisions of sectio .....

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en by the Finance Minister to Parliament. 48.8 Interest paid to a partner would be allowed as a deduction in the hands of the firm. The payment of interest should be in pursuance of the partnership deed. The maximum rate of interest allowed would be 18% simple interest per annum [section 40(b)(iv)]. 48.9 Changes have been made in the scheme of set off and carry forward of losses. The existing provisions relating to firms and their partners in sections 76 and 77 have been omitted. Under the new s .....

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d as a set off in the assessment income of the firm subject to the condition that the partner continued to remain a partner in the said firm (section 75). 48.10 Although, the distinction between a registered and unregistered firm has been removed, a partnership will be assessed as a firm only if- (i) the partnership is evidenced by an instrument; and (ii) the individual shares of the partners are specified in that instrument. A copy of the partnership instrument duly certified has to accompany t .....

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association of persons and all the provisions of this Act shall accordingly be applicable (section 185). [Sections 3, 4, 6, 11, 16, 35, 36, 39, 40, 41, 49, 62 to 69, 83, 84, 86 and 88] Modification of the provisions regarding deduction of tax at source 49. Under the provisions of section 194A of the Income-tax Act, deduction of income-tax at source is to be made from interest in respect of time deposits with banks, etc., at the rates in force. Similarly, under the provisions of section 194H of .....

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t per annum ( now 12 percent per annum) , while the interest paid to partner to the extent as is allowed as deduction while computing income of the firm under the Act, is charged to tax as income of the partner under the head Profit and Gains of Business or Profession , under the new scheme of taxation of partnership firm. The firm shall be allowed as deduction of the interest paid to partner to the extent of 18/12 percent per annum even though there are no profits in the hands of the firm and t .....

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st on capital paid to partner is nothing but statutory allowance and is part of allocable profits to the firm. This argument of the assessee firm is misconceived and fallacious. The Hon ble Apex Court in the case of Munjal Sales Corporation v. CIT (2008) 168 Taxman 43(SC) has elaborately discussed the provisions of Section 30 to 38 of the Act vis-à-vis Section 40(b) of the Act and has settled the controversy by holding that interest paid to partners is an expenditure whereby claim of dedu .....

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1 Act? 10. On the above question of law, Mr. S. Ganesh, learned senior counsel appearing on behalf of assessee, contended that prior to 1-4-1993, section 40(b) referred to disallowances per se but after the Finance Act, 1992 the said section 40(b)( iv) allows deduction, subject to the above limit of 18/12 per cent per annum. According to learned counsel, section 40(b)( iv) talks about statutory deduction and that the question of disallowance comes in only to the extent that payment of interest t .....

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under section 40(b)( iv) and, therefore, the said section 40(b) was a stand-alone section having no connection with the provisions of section 36(1)(iii) of the 1961 Act. Further, according to learned counsel, in this case section 36(1)(iii) had no application as this was a case of payment of interest to the partner on his capital contribution which cannot be equated to monies borrowed by the firm from third parties, hence the present case fell only under section 40(b)( iv) and not under section .....

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licable to the firm as an assessee and that it will apply to all other assessees. That, prior to 1-4-1993, section 40(b)( iv) disallowed interest paid to the partners but after 1-4-1993 the firm has to establish its claim for deduction under sections 30 to 38 and that it was not disentitled under section 40(b) would apply. According to learned counsel, section 40 is in nature of a proviso to sections 30 to 38 and, therefore, even if the assessee establishes its claim for deduction under section .....

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"36. Other deductions.-(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28- (i )and (ii)****** (iii)the amount of the interest paid in respect of capital borrowed for the purposes of the business or profession :- ****** Explanation.-Recurring subscriptions paid periodically by shareholders, or subscribers in Mutual Benefit Societies which fulfil such conditions as may be pr .....

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aid by a firm to any partner of the firm who has also paid interest to the firm, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the firm to the partner exceeds the payment of interest by the partner to the firm. Explanation 2.-Where an individual is a partner in a firm on behalf, or for the benefit, of any other person (such partner and the other person being hereinafter referred to as partner in a representative capac .....

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unt for the purposes of this clause. Explanation 3.-Where an individual is a partner in a firm otherwise than as partner in a representative capacity, interest paid by the firm to such individual shall not be taken into account for the purposes of this clause, if such interest is received by him on behalf, or for the benefit, of any other person;" Section 40(b)(iv ) after Finance Act ,1992 with effect from 1-4-1993 : "40. Amounts not deductible.-Notwithstanding anything to the contrary .....

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n per cent simple interest per annum;" Issue 13. Whether the claim for special deduction made by the assessee exclusively came only under section 40(b)( iv) and that it never came under section 36(1)(iii) of the 1961 Act as argued on behalf of the assessee? Legal Position Explained 14. Before enactment of Finance Act, 1992, broadly speaking, payment of interest by the firm to any partner of the firm, constituted Business Disallowance per se. After Finance Act, 1992, section 40(b)( iv) of th .....

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he words Notwithstanding anything to the contrary in sections 30 to 38 which shows that even if an expenditure or allowance comes within the purview of sections 30 to 38 of the 1961 Act, the assessee could lose the benefit of deduction if the case falls under section 40. In other words, every assessee including a firm has to establish, in the first instance, its right to claim deduction under one of the sections between sections 30 to 38 and in the case of the firm if it claims special deduction .....

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nts not Deductible . Therefore, sections 30 to 38 are Other Deductions whereas section 40 is a limitation on that deduction. It is important to note that sections 28 to 43C essentially deal with Business Income. Sections 30 to 38 deal with Deductions. Sections 40A and 43B deal with Business Disallowances. Keeping in mind the said scheme the position is that sections 30 to 38 are deductions which are limited by section 40. Therefore, even if an assessee is entitled to deduction under section 36(1 .....

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he position may be correct but we are concerned with the scheme of Chapter IV-D. After the enactment of Finance Act, 1992, section 40(b)( iv) was brought to the statute book not only to avoid double taxation but also to bring on par different assessees in the matter of assessment. Therefore, the assessee-firm, in the present case, was required to prove that it was entitled to claim deduction for payment of interest on capital borrowed under section 36(1)(iii) and that it was not disentitled unde .....

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nt of deduction which the assessee is entitled to under sections 30 to 38. In our view, section 40 is a corollary to sections 30 to 38 and, therefore, section 40 is not a stand-alone section. ********* ********* 18. Before concluding, we may mention that the importance of the judgment is the clarification which we were required to give in the context of deductions under sections 30 to 38 to be read with the limitation prescribed under section 40. Since there was some confusion with regard to the .....

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no order as to costs. The above decision of the Hon ble Supreme Court in the case of Munjal Sales Corporation(supra) which has adjudicated the issue under the post amendment period effected by the Finance Act, 1992 where by substantial changes were effected to the scheme of taxation of partnership firm and the partners , was not brought to the notice of the Tribunal while adjudicating the appeal for assessment year 2009-10.We are bound by law to follow the decision of Hon ble Supreme Court vide .....

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spect to the payment of interest u/s 36(1)(iii) of the Act and then the same shall be subject to limitation placed by Section 40(b) of the Act as Section 40(b) of the Act is not a standalone Section but is a corollary to Section 30 to 38 of the Act. Thus, the contention of the assessee firm is fallacious and misconceived that the interest on capital paid to partner is allowed u/s 40(b) of the Act being a statutory allowance and is not an expenditure being claim of deduction referred to in Sectio .....

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view of the decision of the Hon ble Apex Court in Munjal Sales Corporation(supra). The Ahmedabad Tribunal in the case of Shankar Chemicals Work v. DCIT (2011) 12 taxmann.com 461(Ahd.) has under identical facts and circumstances passed an elaborate and detailed order and held as under: 5. At the time of hearing before us, on behalf of the assessee, Shri S.N. Soparkar along with Shri Jaimin Gandhi appeared and filed a paper book containing 8 pages which, inter alia, include (1) submissions before .....

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of ₹ 17,04,535 made under section 14A be deleted. As against this, the ld. D.R. pointed out that no interest-free funds were available to the assessee. Therefore, disallowance has rightly been made. It is pertinent to note that no interest-free funds were available. The investments were made from capital of the partners on which interest at the rate of 10.5 per cent per annum is paid. Therefore, this plea of the assessee's counsel is hereby rejected. 5.1 The second plea raised by the .....

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o ₹ 21,66,108 has been allowed under section 40(b)( ii) of the Income-tax Act, 1961. This expenses has been claimed against exempted dividend income. Therefore, whether this expense is claimed or allowed under section 36(1)(iii) or 40( b)(ii) will not make any difference for the purpose of applying provisions of section 14A of the Income-tax Act, 1961. In rejoinder, the Counsel of the assessee drew our attention to para 48 of circular No. 636 dated 31-8-1992 wherein CBDT has explained the .....

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10 to make it clear that the remuneration or interest, which is disallowed in the hands of the firm, will not suffer taxation in the hands of the partner. Thus, if the interest is disallowed in case of the firm then it will not be taxed in the case of the partner. It may be noted that in case of the assessee firm, the partners to whom interest is paid are taxable at the maximum rate. He further submitted that amendment in the assessment of a firm has been made to avoid double taxation of the in .....

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e taxation. 6. We have heard both the sides on various pleas but we are not satisfied. We decide each and every contention raised by the ld. Counsel of the assessee. The first contention raised by him has already been rejected by us in para No. 5 above. Regarding the second contention raised by him that any disallowance of interest under section 14A will amount to double disallowance, we would like to point out that this contention is also devoid of any merit. For the purpose of deciding this as .....

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onsidered for computing total income under Chapter IV. It implies that such expenditures are to be allowed as deduction, while working out exempt income under Chapter III. Hence under section 14A, only some specific treatment is to be given to those expenditure, which are incurred for earning exempt income. This treatment is this that those expenses should be disregarded for computing total income under Chapter IV and should be reduced from exempt income under Chapter III. Hence, there is no dou .....

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rm, will be less and the share in those income, which are taxable in the hands of the firm, will be more but the entire share of profit receivable by a partner from a firm is exempt and hence there is no impact in the hands of the partner. Since there is no disallowance as such in the hands of the firm and the expenditure incurred for earning exempt income are not allowed to be reduced from taxable income but can be reduced from exempt income, there is no effective disallowance in the hands of t .....

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r attention to the provisions of section 28(v), which reads as under : "28. (v) any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from such firm : Provided that where any interest, salary, bonus, commission or remuneration, by whatever name called, or any part thereof has not been allowed to be deducted under clause (b) of section 40, the income under this clause shall be adjusted to the extent of the amount not so .....

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tion 40 but in the present case, the disallowance is under section 14A and not under section 40(b) and therefore, the proviso to section 28(v) is not applicable and the partner of the assessee firm did not deserve any relief on this account. Moreover, before us is the assessee firm only and not the partners and hence, we do not give any direction on this aspect. 6.4 The ld. Counsel of the assessee also drew our attention to the provisions of sub-section (2A) of section 10 and its explanation and .....

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planation.-For the purposes of this clause, the share of a partner in the total income of a firm separately assessed as such shall, notwithstanding anything contained in any other law, be an amount which bears to the total income of the firm the same proportion as the amount of his share in the profits of the firm in accordance with the partnership deed bears to such profits." 6.5 From the above provision, we find that it has been specified in the same that share of a partner in the total i .....

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rtner should be worked out, as per its profit-sharing ratio, as specified in the partnership deed and such share of the relevant partner should be considered as exempt under section 10(2A). Hence, this contention of the ld. Counsel is also rejected. 6.6 Next contention raised by him is this that interest paid to partners is distribution of profit allocated to the partners in the form of interest and hence interest to partners can be taxed once, either in the hands of the firm or in the hands of .....

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tnership deed, even if there is no profit in the hands of the firm. If the firm pays interest to the partners and the firm is having loss, loss of the firm will increase to that extent and it will be allowed to carry forward in the hands of the firm and therefore, payment of interest by the firm to its partners is not distribution of profits by the firm to the partners. We have also observed somewhere in above paragraphs that there is no disallowance as such of interest in the hands of the firm .....

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ed by him that section 14A talks of disallowing expenditure incurred by the assessee in relation to exempt income and interest paid to partners is not an expenditure at all and it is a special deduction allowed to the firm under section 40(b). This contention of the ld. Counsel of the assessee is also devoid of any merit because there is no deduction allowed under section 40(b). In fact, section 40(b) is a restricting section for various deductions allowable under sections 30 to 38. As per claus .....

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is actually restricting and regulating deduction allowable to the firm on account of payment of interest to partners and is not an allowing section. Hence, allowing section for allowing deduction of interest remands section 36(1)(iii) and therefore, the payment of interest to partners is also an expenditure only and therefore, the same is also hit by the provisions of section 14A, if it is found that the same has been incurred for earning exempt income. This contention is also rejected. 6.8 The .....

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to taxable and non-taxable and payment of interest. This plea of the ld. Counsel of the assessee is also liable to be rejected because if any expenditure has been incurred for earning exempt income, the same has to be disallowed even if there is no actual earning of any exempt income. If interest-bearing borrowed funds are utilised for the purpose of investment in shares and there is no receipt of dividend income or if there is only meagre amount of dividend income, even then, the whole amount o .....

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he logic was that the entire expenditure has been incurred for earning taxable dividend income and hence, it is allowable, even if there is nil or small amount of dividend income. This aspect has been approved by various courts and hence, the same judgment supports this view also that even in case of 'nil' or small amount of dividend income, the entire interest expenditure incurred for making investment in shares is to be considered as expenditure incurred for earning exempt income and t .....

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al are rejected. 7. In the result, the appeal of the assessee is dismissed. The above decision of the Ahmedabad Tribunal in the case of Shankar Chemicals Works(supra) was also not brought to the notice of the Tribunal while adjudicating appeal for the assessment year 2009-10. The Ahmedabad Tribunal after elaborately discussing the law in detail , after its amendment by the Finance Act,1992 has held that interest paid to partner on capital is an expenditure covered under the provisions of Section .....

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payer. We have observed that the assessee firm has relied upon following case laws: a) CIT v. Walfort Share & Stock Brokers Private Limited(20100 326 ITR 1(SC) b) CIT v. R M Chidambaram Pillai (1977)106 ITR 292(SC) c) Nectar Beverages Private Limited v. DCIT(2009) 314 ITR 314 d) Vishnu Anant Mahajan v. ACIT in ITA no 3002/Ahd/2009(Ahd.-SB)- (2012) 22 taxmann.com 88 e) Maxopp Investments Limited & Ors. V. CIT (2012) 247 CTR 162(Del.) f) Kodak India Private Limited v. Addl. CIT (ITA No 734 .....

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. We have already discussed that the claim of deduction of interest on capital paid to partner is to be allowable firstly if all the conditions as stipulated u/s 36(1)(iii) of the Act is complied with, and that Section 40(b)(iv) of the Act is not a stand alone section and is a corollary to Section 36(1)(iii) of the Act and its object is to put limitation on the amount of deduction which the assessee firm is otherwise entitled to under Section 36(1)(iii) of the Act (Reference- decision of Hon bl .....

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whereby the scheme of taxation of partnership firm has gone substantial and major change by the Finance Act,1992 . The Hon ble Supreme Court in 106 ITR 292 held that : First principles plus the bare text of the statute furnish the best guide light to understanding the message and meaning of the provisions of law. Thereafter, the sophisticated exercises in precedents and booklore. Here the first thing that we must grasp is that a firm is not a legal person even though it has some attributes of p .....

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trict law, between a firm and one of its partners. So that any agreement for remuneration of a partner for taking part in the conduct of the business must be regarded as portion of the profits being made over as a reward for the human capital brought in. Section 13 of the Partnership Act brings into focus this basis of partnership business. This legal ideology expresses itself in the Income-tax Act in section 10(4)( b) and section 16(1)(b). A firm, partner and partnership, according to section 2 .....

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(1) and 10(4) to the extent relevant: "10. (1) The tax shall be payable by an assessee under the head 'Profits and gains of business, profession or vocation' in respect of the profits or gains of any business, profession or vocation carried on by him…… (4) Nothing in clause (ix) or clause (xv) of sub-section (2) shall be deemed to authorise the allowance of any sum paid on account of any cess, rate or tax levied on the profits or gains of any business, profession or vo .....

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e reason behind it be. The procedure for computation of the total income of a partner, found in section 16(1)(b) also fits into this understanding of the law behind the law. Section 16 (relevant part) reads thus: "16. (1) In computing the total income of an assessee-…. (b) when the assessee is a partner of a firm, then, whether the firm has made a profit or a loss, his share (whether a net profit or a net loss) shall be taken to be any salary, interest, commission or other remunerati .....

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is obvious, even if the explanation or motivation for it may be more than one. It is implicit that the share income of the partner takes in his salary. The telling cost is that where a firm suffers loss the salaried partner's share in it goes to depress his share of income. Surely, therefore, salary is a different label for profits, in the context of a partner's remuneration. The scheme of the Act, eyeing it with special reference to sections 10(4)( b) and 16(1)(b), designates employee& .....

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paid to partners as per provisions of Section 30 to 37 of the Act read with Section 40 of the Act . The salary, bonus, commission or remuneration so allowed as deduction while computing income of the firm shall be added to the income of the partners albeit under section 28(v) of the Act read with Section 2(24)(ve) of the Act while as per the law as applicable prior to Finance Act,1992, the said salary, bonus, commission or remuneration payable to partner and interest paid to partner was added to .....

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am Pillai in 106 ITR 292 cannot be applied under the new changed law post Finance Act,1992 whereby the partnership firm is taxed as a separate entity. c &d) Nectar Beverages Private Limited v. DCIT(2009) 314 ITR 314(SC) & Vishnu Anant Mahajan v. ACIT in ITA no 3002/Ahd/2009(Ahd.-SB)-(2012) 22 taxmann.com 88 - The reliance of the assessee firm on the above decisions to contend that since depreciation u/s 32 of the Act is held to be statutory allowance and cannot be considered as an expend .....

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and is a corollary to Section 36(1)(iii) of the Act limiting the deduction. Thus, the contention of the assessee firm that interest paid to partner is a statutory allowance and cannot be considered as an expenditure as envisaged u/s 14A of the Act for disallowance cannot be accepted and is rejected. e &f) Maxopp Investment Limited & Ors. V. CIT (2012) 247 CTR 162(Del.) & Kodak India Private Limited v. Addl. CIT (ITA No 7349/Mum/2012)- The contention of the assessee firm that the AO .....

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77; 1.39 crore and has no other borrowings while investments to the tune of ₹ 4.75 crores has been made in Mutual Funds out of partner s capital contribution which yield exempt income. The AO has by applying Rule 8D(2)(ii) of Income Tax Rules, 1962 has proportionately disallowed ₹ 12,66,679/- as interest bearing funds being capital contribution by partners were utilised to invest in Mutual Funds which yielded tax free income to the assessee firm .Thus, the AO has duly complied with t .....

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amp;H.)- The contention of the assessee firm that the AO should have proved nexus of expenditure with exempt income before invoking provisions of Section 14A of the Act read with Rule 8D of Income Tax Rules, 1962 again is devoid of merits as the assessee firm has paid interest on capital to partners and the same funds are deployed to make investment in Mutual Fund and by applying Rule 8D (2)(ii) of Income Tax Rules, 1962 the proportionate disallowance as per formula provided in the said rule is .....

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rejected. We are bound by the decision of Hon ble Supreme Court in the case of Munjal Sales Corporation (supra) and we also fully agree with the decision of Ahmedabad Tribunal in the case of Shankar Chemical Works(supra) . Moreover, under the new scheme of taxation of partnership firm introduced by the Finance Act,1992, the interest paid to the partner on capital has to be claimed as deduction u/s 36(1)(iii) read with Section 40(b) of the Act, from the income of the firm and if after allowing su .....

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expenditure as envisaged u/s 36(1)(iii) of the Act and the assessee firm has to firstly establish its claim of deduction of interest on capital by satisfying the provisions of Section 36(1)(iii) of the Act and then, Section 40(b) of the Act puts limitation on allowability of interest once it passes the requirements of provisions of Section 36(1)(iii) of the Act and thus , interest paid to partners on capital contribution is not a statutory allowance u/s 40(b) of the Act but is an expenditure u/ .....

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of taxation under Section 44AD and 44AE of the Act, the salary and the interest payable to partner is deducted from the income of the firm computed under 44AD(1) and 44AE(1) of the Act , subject to the conditions and limits specified in clause (b) of section 40 , rather this contention of the assessee support the stand that the salary and interest payable to partners are an expenditure covered under Section 30 to 37 of the Act as held by Hon ble Supreme Court in Munjal Sales Corporation(supra) . .....

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tal to the tune of ₹ 12,66,679/- as computed by the AO u/s 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 is an expenditure , which is allowable as an expenditure being incurred by the assessee firm in relation to an income which does not form part of the total income of the assessee firm under the Act , and shall be allowed as deduction from the dividend income from Mutual Funds earned by the assesse firm as envisaged u/s 14A of the Act and shall go to reduce the exempt in .....

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Act or in other disallowance u/s 14A of the Act, will not entitle the partner to claim relief in their individual return of income which shall be chargeable to tax as per the existing and applicable provisions of Section 28(v) of the Act read with Section 2(24)(ve) of the Act after including the afore-said interest income in the hands of the partners. Further, the AO has computed disallowance of ₹ 20,357/- under Section 14A of the Act read with Rule 8D(2)(i) of Income Tax Rules, 1962 bein .....

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Income Tax Rules, 1962 to cover administrative and other indirect expenses, which disallowance also we uphold. It is noteworthy that Rule 8D of Income Tax Rules, 1962 is held to be applicable w.e.f. assessment year 2008-09 by Hon ble Bombay High Court in the case of Godrej and Boyce Manufacturing Limited(supra). 11. In the result, the appeal filed by the assessee firm in ITA No. 994/Mum/2014 is dismissed. ITA No.: 1562/Mum/2014(Revenue Appeal) 12. The Grounds of appeal raised by the Revenue in .....

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t of the AO be restored. 13. It was observed by the AO from the perusal of the Profit and Loss A/c that the assessee firm has claimed expenses on foreign commission of ₹ 34,18,126/- .The assessee firm, during the course of assessment proceedings u/s 143(3) of the Act read with Section 143(2) of the Act has produced the details of commission payment as under:- Sr. No. Name Amount 1. Tawfiq Ahmed Al Rasheed 90127 2. Mian Shafiq Ahmed Mushtaq 26946 3. K.T Varindani 505147 4. Doulat Aswani 254 .....

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x in India as per the provisions of the Act , on the payment of commission made to them which is either remitted through banking channels with due permission or as directly deducted from the sale proceed received in convertible foreign exchange , no tax is required to be deducted and the expenses on export commission and other related charges payable to a non-resident for services rendered outside India shall be allowed as deduction . The assessee firm submitted that CBDT has issued circular bea .....

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hat commission paid to non-resident agent for services rendered outside India not being chargeable to tax in India could not be disallowed u/s 40(a)(ia) of the Act and Section 195 of the Act clearly speaks that unless the Income is liable to be taxed in India, there is no obligation to deduct tax at source and Section 9 of the Act does not provide scope for taxing such commission payment because the basic criteria provided in the section is about genesis or accruing or arising of income in India .....

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buyer deduct the commission from the sale proceeds and give the same to the agents. The services are rendered by the agent in their country only and payments are also received in the foreign country on which no tax is deductible at source on these payments , which are claimed as business expenses by the assessee firm. The services by these agents were rendered abroad and no part of it is attributable to Indian Territory. The assessee firm submitted that no technical/managerial services were inv .....

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mission agent on your behalf canvassing your business, visit the customers and procure business of textile items after knowing requirements of various customers discussing with you telephonically / by e-mail, again communicating with customers here and then fix the price and thereafter place orders on behalf of the prospective buyers with you as per samples given to us. Sometimes, we get samples from you which we show to various customers and book orders on your behalf. It is also placed on reco .....

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he above services rendered by us in your country we get from you commission @..... %. We confirm that we have neither any permanent establishment in India nor are assessed to tax in India. The AO observed that these foreign agents are doing the following activities on behalf of the assessee firm:- (i) The agent helps the company to facilitate and secure the overseas orders and collect the payments from different overseas. (ii) He gets samples of products approved by the overseas buyers and book .....

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eir respective countries. 14. The AO concluded that these foreign(non-resident) commission agents are providing services which included broad gamut of services which include marketing of assessee s various products, providing information relating to the overall demand position of the concerned country and informing the assessee of the respective government policies, restrictions and requirements, providing information about the competition, their products, strength and weakness, coordinating exi .....

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deducted at source by the assessee firm u/s 195 of the Act or an application should have been made by the assessee firm for no deduction of tax at source u/s 195(2) of the Act . Thus the AO held that these payments to non-resident by assessee firm is income deemed to accrue or arise in India and chargeable to tax u/s 9(1)(vii) of the Act and as per the explanation to section 9(2) of the Act , the fees for technical services means any consideration for rendering of managerial , technical or consu .....

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bai Tribunal in the case of ACIT v. Anchor Health and Beauty Care Pvt. Ltd. in ITA No. 7164/Mum/2008 for the AY 2004-05 which held that: in the light of the decision of Hon ble Karnataka High Court and also in the absence of any contrary decision on this issue, I am of the view that the assessee cannot escape from taxation by virtue of provisions of section 40(a)(i) of the Act, in the event of non-payment of tax at source u/s 195 of the Act without obtaining clearance u/s. 195(2) of the Act. Hen .....

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e assessment orders dated 07-03-2013 passed by the AO u/s 143(3) of the Act, the assessee firm filed the first appeal with the CIT(A) and submitted that the AO erred in terming the payment as management service charges while the payment were made to persons abroad purely for procuring the business at the rates and other terms of the assessee firm and they had no authority to either reduce the price or change any other term of the supply. The commission agents is helping in securing the overseas .....

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ect to the AO holding that the agent helps in development of new customized products , market feed back and information etc. , the assessee firm submitted that agent has given the feedback of the market by informing the assessee firm what is in demand and ultimately it is the suppliers choice to develop the particular product or not and the agent has no say in the same. The assessee firm submitted that these agents tries to maximize the sale with the buyers to increase their commission and hence .....

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imilar issue was decided in favour of the taxpayer . The assessee also relied upon the decision of Mumbai Tribunal in the case of Armayesh Global v. ACIT in ITA No. 8822/Mum/2010 dated 04.05.2012 whereby Mumbai Tribunal held that the taxpayer was using services of overseas commission agents for procuring export orders it was only acting as an agent on commission basis and had not been providing any managerial/technical services. The assessee firm also furnished party-wise details of commission p .....

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f ₹ 34,18,126/- has been made to seven parties, out of which major payment of ₹ 25,44,625/- has been made to Shri Daulat Aswani a non-resident Indian, residing in Gambia, West Africa. Payment of commission to Aswani has been regularly made from financial year relevant to the assessment year 2006-07 onwards. In the assessment year 2009-10, payment of commission made was ₹ 34,95,099/-. Of the remaining six parties, from the details it was observed that the commission payment to f .....

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nical or other personnel and they were made to facilitate and secure the overseas orders and to collect the payment from different overseas parties and to carry out liaison work, on behalf of the assessee firm. The CIT(A) observed that the facts in the case of the assessee firm are different from the facts in the case of Samsung Electronics(supra) decided by the Karnataka High Court . The CIT(A) held that there is nothing on record to suggest that these agents were providing managerial, technica .....

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vices. The CIT(A) held that these commission agents were not having permanent establishment in India, amount in question did not accrue or arise in India and, thus, there was no need for deducting tax at source u/s. 195 of the Act . The CIT(A) referred to decision of the Mumbai Tribunal in the case of Yash Raj Films Private Limited (2013) 140 ITD 625. Thus, addition of ₹ 34,18,126/- made by the AO u/s 40(a)(i) of the Act was deleted by the CIT(A) vide orders dated 30.12.2013. 16. Aggrieved .....

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e Court in the case of GE India Technology Centre Private Limited (2010) 7 taxmann.com 18 (SC). The ld Counsel of the assessee firm submitted that amount has been paid by the assessee firm to the commission agents for procuring orders and the same was not allowed by the AO , the assessee firm also relied on the decisions of the Mumbai Tribunal in the assessee s own case vide orders dated 11.03.2015 in ITA No. 6870/Mum/2012 & 7335/Mum/2012 for the assessment year 2009-10 and submitted that th .....

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place of establishment in India . The assessee firm also contended that circular No. 07/2009 dated 22.10.2009 has been introduced prospectively and earlier circulars clearly stipulating no tax is to be deducted at source on payments of export commission to foreign brokers for services rendered outside India for sourcing export orders and for collecting payments which are withdrawn from 22.10.2009. The assessee firm submitted that these foreign agents did not have any PE in India and hence the d .....

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Autolektrik Ltd. 49 Taxmann.com 412 (Delhi) The assessee firm contented that no managerial/technical services has been rendered by these foreign agents and the commission on exports should be allowed. 19. We have considered the rival contentions and perused the material on record including case laws relied upon. We have observed that the assessee firm has paid the export commission of ₹ 34,18,126/- to the foreign agents for rendering services abroad in relation to sourcing of export order .....

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foreign agents do not have any permanent establishment or any place of establishment in India .These foreign agents are operating in their respective countries and rendering services to the assessee firm from abroad and no part of the such income can be reasonably attributable to any operation carried out in India by these foreign brokers as per the facts which has emerged from records. The payments to said foreign brokers have been sent by the assessee firm from India directly to their bank ac .....

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material to substantiate that there is any PE or business association in India of these foreign agents , nor any evidence is brought on record to establish that there is any portion of services rendered by these foreign agents from India. In our considered view, these foreign agents have rendered services for sourcing export orders and for collecting payments for and on behalf of the assessee firm which is their business income not liable to tax in India . The other services such as sample appro .....

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on of payments for the assessee firm. Under Section 9(1)(vii) of the Act , income is deemed to accrued or arise in India if fees payable for any technical services utilised in a business or profession in India or for earning any income from any source in India. Fees for technical services include managerial , technical or consultancy as stipulated in explanation 2 to Section 9(1)(vii) of the Act. The Hon ble Delhi High Court in the judgment in the case of DIT v. Panalfa Autoelektric Limited (201 .....

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nstitute managerial services. The decision of Hon ble Delhi High Court is reproduced as under: The present appeal by the Revenue, which arises out of proceedings under Section 195/197 of the Income-tax Act, 1961 ('Act', for short), relating to assessment year 2010-11 on an application filed by Panalfa Autoelektrik Ltd. (assessee, for short), requires adjudication of the following substantial question of law:- "Whether the ITAT was right in holding that the commission paid to Agenta .....

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mmission for arranging export sales and realizing payments to Agenta World Trading and Consulting Establishment, a nonresident company registered in Liechtenstein. There is no Double Taxation Avoidance Agreement between India and Liechtenstein and, therefore, in the present appeal we are only concerned with the question of receipt, accrual or deemed accrual of the said income in India as per the mandate of the Act. 4. The Assessing Officer relying upon the decision of the Authority for Advance R .....

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er rate would not be applicable in the present case. 5. The Commissioner of Income Tax (Appeals), however, reversed the aforesaid finding holding that the commission payment in the present case was not in the nature of 'fee for technical service' and he distinguished the decision in the case of Wallace Pharmaceuticals P. Ltd. (supra). The said finding has been affirmed by the Tribunal in the impugned order. 6. In order to appreciate the controversy, we would first like to refer and inter .....

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or (b) accrues or arises or is deemed to accrue or arise to him in India during such year. Explanation 1. - Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India. ** ** ** 9. Income deemed to accrue or arise in India.-(1) The following incomes shall be deemed to accrue or arise in India- (i) all income accruing or arising, whether directl .....

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y attributable to the operations carried out in India; ** ** ** Explanation 4 - For the removal of doubts, it is hereby clarified that the expression "through" shall mean and include and shall be deemed to have always meant and included "by means of", "in consequence of" or "by reason of". ** ** ** (vii) income by way of fees for technical services payable by- ** ** ** (b) a person who is a resident, except where the fees are payable in respect of services .....

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n for any construction, assembly, mining or like project undertaken by the recipient, or consideration which would be income of the recipient chargeable under the head "Salaries".' 7. Section 5(2) states that total income of a person, who is a non-resident, includes income from all sources which (a) is received or deemed to be received in India in such year by or on behalf of such person; (b) accrues or arises in India; or (c) is deemed to accrue or arise in such year in India. Exp .....

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oes not fall under any of the aforesaid categories. Section 9 creates a deeming fiction of income which is not received in India or accrues or arises in India but is deemed to accrue or arise in India. While interpreting a deeming clause, the courts have to be cautious that they should not expand the scope beyond what is mandated and required by the deeming clause. The deeming clause by its very nature enacts a fiction to treat what is unreal as real and, therefore, unless the situation is cover .....

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rom any business connection in India, or through or from any property in India etc. 10. What is meant by 'business connection' has been interpreted by the Supreme Court in the case of CIT v. R.D. Aggarwal & Co. [1965] 56 ITR 20 and subsequently inBarendra Prasad Ray v. ITO [1981] 129 ITR 295/6 Taxman 19 (SC). We need not dwell on the said aspect in detail for several reasons, though Circular No. 23 dated 23rd July, 1969 issued by the Central Board of Direct Taxes would not be applica .....

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with retrospective effect from 1st April, 1962, clarifying the expression "through" to have always meant and included, "by means of", "in consequence of" or "by reason of". There is no finding by the Assessing Officer and there is no allegation that a non-resident was carrying on any operation whatsoever in India. Thus, there is no question of attributing any income to operations carried on by the non-resident in India. No such argument has been addressed. .....

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examine Section 9(1)(vii) of the Act. 12. In the present case, clause (b) to Section 9(1)(vii) would be applicable as the respondent-assessee, the payer was a resident of India. The exceptions carved out under clause (b) are not applicable as it is not the case of the respondent-assessee that the fee paid was in respect of services to be utilised in business or profession carried out by the payer outside India, or for the purpose of making or earning of any income from any source outside India. .....

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services as per Explanation 2; managerial services, technical services and consultancy services, and it includes provisions for services of technical and other personnel albeit there are specific exclusions, but we are not concerned with the same in the present appeal. 14. The expressions "managerial, technical and consultancy services" have not been defined either under the Act or under the General Clauses Act, 1897. The said terms have to be read together with the word 'services& .....

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a technical service. According to an Article on "Management Sciences", in 14 Encyclopaedia Britannica 747, the management in organisations include at least the following: "(a) discovering, developing, defining and evaluating the goals of the organization and the alternative policies that will lead toward the goals, (b) getting the organization to adopt the policies, (c) scrutinizing the effectiveness of the policies that are adopted, (d) initiating steps to change policies when th .....

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gement to operational management.' Recently this Court in CIT v. Bharti Cellular Ltd., [2009] 319 ITR 139/[2008] 175 Taxman 573 had observed:- 'The word "manager" has been defined, inter alia, as: "a person whose office it is to manage an organization, business establishment, or public institution, or part of one; a person with the primarily executive or supervisory function within an organization, etc., a person controlling the activities of a person or team in sports, en .....

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5 Taxman 375, wherein it was elucidated:- 'First, about the connotation of the term "managerial". The adjective "managerial" relates to manager or management. Manager is a person who manages an industry or business or who deals with administration or a person who organizes other people's activity [New Shorter Oxford Dictionary]. As pointed out by the Supreme Court inR. Dalmia v. CIT [1977] 106 ITR 895, "management" includes the act of managing by direction, .....

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ecutor, any supervisory function whatsoever. This is clear from the facts as recorded by the Commissioner of Income Tax (Appeals), which have been affirmed by the Tribunal. The Commissioner of Income Tax (Appeals) has quoted excerpts of the agreement between the respondent-assessee, who has been described as 'PAL', and the non-resident, who has been described as 'AGENTA'. The relevant portions thereof read as under:- "2. Appointment (1) PAL hereby appoint AGENTA as its commi .....

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r of AGENTA. ** ** ** 4. Commission (a) PAL agrees and AGENTA accepts that the amount of commission payable to it shall be the difference between consideration which PAL receives in terms of the purchase contract/order form the purchaser(s) and the pre determined guaranteed consideration settled and agreed between the parties, as described in Annexure 1 annexed hereto; (b) The parties agree that all the taxes applicable and required to be deducted in India to the transaction contemplated herein .....

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epted. The non-resident, therefore, was acting as an agent for procuring orders and not rendering managerial advice or management services. Further, the respondent-assessee was legally bound with the non-residents' representations and acts, only when there was a written and signed authorization issued by the respondent-assessee in favour of the non-resident. Thus, the respondent-assessee dictated and directed the non-resident. The Commissioner of Income Tax (Appeals) has also dealt with quan .....

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the agreement to contend that the aforesaid clauses do not represent the true nature of the transaction. The Assessing Officer in his order had not bothered to refer and to examine the relevant clauses, which certainly was not the right way to deal with the issue and question. 18. It would be incongruous to hold that the non-resident was providing technical services. To quote from Skycell Communications Ltd. v. Dy CIT [2001] 251 ITR 53/119 Taxman 496 (Mad), the word 'technical' has been .....

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a book or article) requiring special knowledge to be understood: a technical report. 2. of involving, or concerned with applied and industrial sciences: an important technical achievement. 3. resulting from mechanical failure: a technical fault. 4. according to a strict application or interpretation of the law or the rules: the arrest was a technical violation of the treaty. Having regard to the fact that the term is required to be understood in the context in which it is used, "fee for tec .....

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esident had not undertaken or performed "technical services", where special skills or knowledge relating to a technical field were required. Technical field would mean applied sciences or craftsmanship involving special skills or knowledge but not fields such as arts or human sciences (see paragraph 24 below). 20. The moot question and issue is whether the non-resident was providing consultancy services. In other words, what do you mean by the term "consultancy services"? Thi .....

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s a derivative of the word "consult" which entails deliberations, consideration, conferring with someone, conferring about or upon a matter. Consult has also been defined in the said Dictionary as "ask advice for, seek counsel or a professional opinion from; refer to (a source of information); seek permission or approval from for a proposed action". It is obvious that the service of consultancy also necessarily entails human intervention. The consultant, who provides the cons .....

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could also be technical service. However, the category of consultancy services also includes an advisory service, whether or not expertise in technology is required to perform it." 21. The word 'consultant' refers to a person, who is consulted and who advises or from whom information is sought. In Black's Law Dictionary, Eighth Edition, the word 'consultation' has been defined as an act of asking the advice or opinion of someone (such as a lawyer). It may mean a meeting .....

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nresident had not rendered any consultation or advice to the respondent-assessee. The nonresident no doubt had acquired skill and expertise in the field of marketing and sale of automobile products, but in the facts, as notice by the Tribunal and the Commissioner of Income Tax (Appeals), the non-resident did not act as a consultant, who advised or rendered any counselling services. The skill, business acumen and knowledge acquired by the non-resident were for his own benefit and use. The non-res .....

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ltation or advise rendered by the non-resident to the respondent-assessee. 23. Decision in the case of Wallace Pharmaceuticals (P.) Ltd. (supra) is clearly distinguishable as in the said case the non-resident consultant had to perform several services in the nature of attending meetings on mutually agreeable dates and providing advice and counselling, which were in the nature of consultancy services as they entailed support from a product team, compliance with all legal and administrative formal .....

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, has elucidated:- 'Technical services 39. For the Group, services are of technical nature when special skills or knowledge related to a technical field are required for the provision of such services. Whilst techniques related to applied science or craftsmanship would generally correspond to such special skills or knowledge, the provision of knowledge acquired in fields such as arts or human sciences would not. As an illustration, whilst the provisions of engineering services would be of a .....

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ugh the internet). 41. In that respect, it is crucial to determine at what point the special skill or knowledge is used. Special skill or knowledge may be used in developing or creating inputs to a service business. The fee for the provision of a service will not be a technical fee, however, unless that special skill or knowledge is required when the service is provided to the customer. For example, special skill or knowledge will be required to develop software and data used in a computer game .....

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categories of e-commerce transactions similarly involve the provision of the use of, or access to, data and software (see, for example, categories 7, 8, 9, 11, 13, 15, 16, 20 and 21 in annex 2). The service of making such data and software, or functionality of that data or software, available for a fee is not, however, a service of a technical nature. The fact that the development of the necessary data and software might itself require substantial technical skills is irrelevant as the service pr .....

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Managerial services 43. The Group considers that services of a managerial nature are services rendered in performing management functions. The Group did not attempt to give a definition of management for that purpose but noted that this term should receive its normal business meaning. Thus, it would involve functions related to how a business is run as opposed to functions involved in carrying on that business. As an illustration, whilst the functions of hiring and training commercial agents wo .....

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and software, and the management of the business of providing it to customers, might itself require substantial management expertise is irrelevant as the service provided to the client is neither managing the client's business, managing the supplier's business nor developing that data and software (which may well be done by someone other than the supplier) but rather making the software and data available to that client. The mere provision of access to such data and software does not re .....

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nd managerial services to the extent that the latter types of services could well be provided by a consultant.' We broadly agree with the aforesaid observations. However, in the case of selling agents, we add a note of caution that taxability would depend upon the nature of the character of services rendered and in a given factual matrix, the services rendered may possibly fall in the category of consultancy services. Paragraphs 41 and 42 do not emanate for consideration in the present case, .....

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lification that allow him to do so. In the present case, the aforesaid requisites and required necessities are not satisfied. Indeed, technical, managerial and consultancy services may overlap and it would not be proper to view them in watertight compartments, but in the present case this issue or differentiation is again not relevant. 26. In view of the aforesaid discussion, the substantial question of law mentioned above has to be answered in favour of the respondent-assessee and against the a .....

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income of these foreign agents have accrued or arisen in India or deemed to have accrued or arisen in India as contemplated u/s 9 of the Act to bring in within the fold of chargeability of tax under the Act and hence the same cannot be brought to tax within the provisions of the Act. As the instant appeal is for assessment year 2010-11 whereby vide circular no 07/2009 dated 22.10.2009, CBDT has withdrawn circular no 23 dated 23-07-1969 and circular no 786 dated 07-02-2000, we have to see the eff .....

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ed disallowance under section 40(a)( ia) of the Act or not. Whether the payment in dispute made by way of cheque or demand draft by posting the same in India would amount to payment in India and consequently whether mere payment would be said to arise or accrue in India or not? First we will take up the issue whether the payment of commission to overseas agents with out deduction of tax is attracted disallowance under section 40(a)( ia) of the Act or not. We find that the CBDT by its recent Circ .....

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195 of the Act very clearly speaks that unless the income is liable to be taxed in India, there is no obligation to deduct tax. Now, in order to determine whether the Income could be deemed to be accrued or arisen in India, section 9 of the Act is the basis. This section, in our opinion, does not provide scope for taxing such payment because the basic criteria provided in the section is about genesis or accruing or arising in India, by virtue of connection with the property in India, control an .....

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t received by him or on his behalf in India and such an overseas agent is not liable to income-tax in India on these commission payments. This view is fortified by the judgment of Apex Court in the case of Toshoku Ltd. (supra). 9. It is pertinent to note that the section 195 of the Act has to be read along with the charging sections 4, 5 and 9 of the Act. One should not read section 195 to mean that the moment there is a remittance; the obligation to deduct TDS automatically arises. If we were t .....

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rrect, that any person making payment to a non-resident is necessarily required to deduct tax, then the consequence would be that the department would be entitled to appropriate the monies deposited by the payer even if the sum paid is not chargeable to tax because there is no provision in the Income-tax Act by which a payer can obtain refund. As per section 237 read with section 199 of the Act implies that only the recipient of the sum i.e., payee would seek a refund. In view of the above, henc .....

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Corporation of AP Ltd. v. CIT (1999) 105 Taxman 742 (SC)and GE India Technology Centre Private Limited v. CIT ( 2010) 193 Taxman 234 (SC) has held that the obligation to deduct tax at source u/s 195 of the Act arises only when the payment is chargeable to tax under the provisions of the Act, in the hands of non-resident. Thus, determination of taxability of the income of the non-resident is governed by the provisions of the Act, rather than by the circulars issued by the CBDT. We have also obse .....

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orders of the authorities below and also deliberated on the judicial pronouncements cited before us in the context of factual matrix of the case. From the record we found that during the year assessee has paid commission to various non-resident foreign brokers amounting to ₹ 92,14,509/- for rendering services outside India in relation to export orders and recovery of the sale proceeds. Nothing was brought on record by the AO to establish that the said non-resident brokers have their place .....

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urt in the case of Eon Technology Pvt. Ltd., 343 ITR 366 (Del). There is no dispute to the well settled proposition that provisions of Section 195 does not apply when no income is found to be taxable in India, therefore, there was no reason for making any disallowance under provisions of Section 40(a)(i) in view of decision of the Hon ble Supreme Court in the case of G.E.India Technology Centre Pvt. Ltd., 327 ITR 456. There are also judicial pronouncements supporting this proposition, which are .....

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lhi Bench of the tribunal in the case of Adidas Sourcing Ltd., 28 taxmann.com 267 (Del). Even the amended section 9 applies only to technical services and not to brokerage. Accordingly, the payment of brokerage to non-resident did not attract the provisions of Section 9 r.w.s.195 as was held by the Delhi Bench in the case of Angelique International Ltd., 28 taxmann.com 219 (Del) and Allahabad Bench of the Tribunal in the case of Model Exims, 42 taxmann.com 446 (All). 11. In view of the above, we .....

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for assessment year 2011-12 whereby the Tribunal held as under : This appeal by the assessee is directed against the order passed by the CIT u/s 263 of the Income-tax Act, 1961 (hereinafter also called 'the Act') on 8.7.14 in relation to the assessment year 2011-12. 2. Briefly stated, the facts of the case are that the assessee is engaged in manufacturing of engineering items. The AO observed during the course of assessment proceedings that a sum of ₹ 23,58,813/- was paid by the as .....

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ource on such payment of commission to foreign parties. Having not done so, the ld. CIT held that the assessment order passed by the AO on this score was erroneous and prejudicial to the interests of the Revenue. In support of his conclusion, the ld. CIT also relied on the opinion of the Authority of Advance Ruling in SKF Boilers & Driers (P.) Ltd., Inre [2012] 343 ITR 385/206 Taxman 19/18 taxmann.com 325 (AAR - New Delhi) and Rajiv Malhotra, Inre [2006] 284 ITR 564/155 Taxman 101 (AAR - New .....

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by stating that the non-resident commission agent provided services outside India and, hence, the amount was not chargeable to tax in his hands. It goes without saying that liability for deduction of tax at source arises only when the amount is chargeable to tax in the hands of the payee. If the amount itself is not so chargeable to tax, the liability for deduction of tax at source is also obliterated. 4. Firstly, we will endeavour to determine if the amount of commission is taxable in the hand .....

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ia inasmuch as the assessee made payment for such commission to the non-resident outside India. Section 7 defines 'Income deemed to be received'. It refers to the annual accretion to the balance at the credit of an employee participating in a recognized provident fund; transferred balance in a RPF to some extent; and the contribution made by the Central Government or any other employer to the account of an employee under Pension Scheme referred to in section 80CCD. From the description o .....

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e source of accrual or arising of income cannot be relevant because the incidence of tax is attached with the place of accrual of income and not its source. Ordinarily, there can be several places involved in a transaction, such as, a place where an agreement is entered into or a place where services are actually performed or a place where the services are utilized or a place where entries are made in the books or a place where consideration is paid or received etc. In the context of rendering o .....

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orders are also sold outside India, no part of his income can be said to accrue or arise in India. The last component of section 5(2) is income which 'is deemed to accrue or arise' in India. The expression - 'Income deemed to accrue or arise in India' - has been defined in section 9(1) of the Act. Sub-section (1) of section 9 has seven clauses. Clause (i) deals with income accruing or arising, whether directly or indirectly, through or from any business connection in India or fr .....

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ncome as is attributable to the operations carried out in India, shall be deemed to accrue or arise in India. Thus, it is clear that in order to bring any income within the ambit of section 9(1)(i), it is sine qua non that the activity resulting into such income should be carried out in India. Notwithstanding the existence of a business connection in India, as even understood in the widest possible amplitude, an income will fall u/s 9(1)(i) only to the extent it results from the operations carri .....

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th 'Interest'; clause (vi) dealing with 'Royalty'; and clause (vii) dealing with 'Fees for technical services', have no application to the facts and circumstances of the instant case. The amount of commission paid to the non-resident cannot be described as salary or dividend or interest or royalty or fees for technical services. 5. The argument of the ld. DR that Explanation below section 9(2) will bring the instant case within the fold of section 9(1), is devoid of any m .....

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ident which is in the nature of interest or royalty or fees for technical services, then, such income shall be deemed to accrue or arise in India irrespective of the non-resident rendering services in or outside India etc. The pre-condition for magnetizing this Explanation is that the income of the non-resident should be in the nature of interest or royalty or fees for technical services. It is only in respect of these three categories of incomes that the deeming provision is attracted notwithst .....

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n India or accruing or arising or deemed to accrue or arise to him in India in terms of section 5(2) of the Act. Once it is held that the commission income of a non-resident for rendering services outside India does not fall within the scope of his total income, it automatically implies that the same is not chargeable to tax in his hands. 7. Sub-section (1) of section 195 provides that any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest .....

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he hands of the payee under the provisions of this Act. It is quite natural also because a liability for deduction of tax at source pre-supposes tax liability in the hands of the payee. If there is no tax liability in respect of the payments made to the payee, there can be no question of deducting any income-tax at source from such payment. Only if the amount is chargeable to tax in the hands of the recipient that the question of deducting any tax at source therefrom arises. In an earlier para, .....

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sion to the non-resident. Before evaluating such a submission, it would be apposite to consider the prescription of the Explanation 2, as under:- "Explanation 2. - For the removal of doubts, it is hereby clarified that the obligation to comply with sub-section (1) and to make deduction thereunder applies and shall be deemed to have always applied and extends and shall be deemed to have always extended to all persons, resident or non-resident, whether or not the non-resident person has - (i) .....

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esidence or place of business or business connection in India or any other presence in any manner whatsoever in India. The Explanation simply clarifies that the obligation to deduct tax at source in terms of section 195(1) is not restricted only to the residents, but also extends to the non-residents irrespective of such non-resident not having a place of business or a business connection in India etc. Since the main part of sub-section (1) of section 195 casts obligation for withholding of tax .....

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is made on account of any sum which is chargeable under the provisions of this Act, then, there will be an obligation to deduct tax at source. Per contra, if the amount is not chargeable to tax in the hands of the payee, then, no liability to deduct tax at source can be fastened on the payer. Thus it is vivid that the insertion of the Explanation 2 has not brought any change to the factual position obtaining before us. The effect of insertion of Explanation to section 195(1) is simply to clarif .....

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owance u/s 40(a)(i) of the Act. 10. The ld. DR vehemently accentuated on Circular no. 7 of 2009 to contend that with the withdrawal of the earlier benevolent circulars on this issue, the instant commission payment has become chargeable to tax in the hands of the payee and in the absence of the assessee having deducted tax at source, the ld. CIT was justified in setting aside the assessment order allowing deduction for such commission payment. 11. We do not find any force in this argument. It is .....

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ion payable to a non-resident for services rendered outside India is not disallowable u/s 40(a)(i) of the Act. Thereafter, Circular no. 7 dated 22/10/2009 was issued withdrawing, inter alia, the above two circular nos. 23 and 786. The legal position contained in section 5(2) read with section 9, as discussed above about the scope of total income of a non-resident subsisting before the issuance of circular nos. 23 and 786 or after the issuance of circular no. 786 has not undergone any change. It .....

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ved by him in India nor any deeming provision of receipt or accrual is attracted. It is further relevant to note that the latter Circular simply withdraws the earlier circular, thereby throwing the issue once again open for consideration and does not state that either the export commission income has now become chargeable to tax in the hands of the foreign residents or the provisions of section 195 read with sec. 40(a)(i) are attracted for the failure of the payer to deduct tax at source on such .....

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v Malhotra (supra). It is correct that at least in SKF Boilers (supra),the Authority has held that the payment of commission on export orders is chargeable to tax u/s 5(2)(b) read with section 9(1)(i) of the Act. By an independent evaluation of the matter in the light of the provisions of section 5(2) read with section 9 of the Act, we have held above that the foreign commission is not chargeable to tax in the hands of the non-resident. Be that as it may, it is important to note that it is not a .....

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sident company. The AO held that the commission payment was taxable as fees for technical services u/s 9(1)(vii) of the Act. That is how, when assailed, the Hon'ble High Court held that the payment of commission cannot be considered as fees for technical services in terms of section 9(1)(vii) so as to call for any deduction of tax at source. The Hon'ble Madras High Court in CIT v. Faizan Shoes (P) Ltd. [2014] 367 ITR 155/226 Taxman 115/48 taxmann.com 48, has also held that no disallowanc .....

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T v. Max India Ltd. [2007] 295 ITR 282/[2008] 166 Taxman 188. In this case, the Hon'ble Summit Court held that when two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue, unless the view taken by the ITO is unsustainable in law. Adverting to the facts of the instant case, it can be seen that the AO, after considering certain decisions relied by the assessee favouring nonde .....

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Forum: Duty Drawback & Input Credit - under GST

Forum: Excise duty credit on finished stock at additional place of business.

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Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

Forum: Trans1 return

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex — Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports – Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

Highlight: Cenvat credit availed on Club Membership for the Director is not admissible as it cannot be said to be remotely connected with the activity of manufacture

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Jaitley asks biz not to wait till last day to file GST returns

Circular: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg.

Article: 20 Things You must know about E Way Bills in GST Law

Article: ‘DUTY DRAWBACK’ CANNOT BE EQUATED WITH ‘REBATE OF DUTY’

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

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Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.



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