TMI Blog2011 (8) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... source. The CIT(A) has not appreciated the following facts: i. That this commission payment was made for services rendered in India and hence section 9 is squarely applicable in this case. ii. The CIT(A) has relied on Circular No. 786 dated 7.2.2000 which has been withdrawn by the Board vide Circular No. 7 of 2009 dated 22.10.2009. 2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in not giving any reasons nor abutting the A.O. s reasoning mentioned in the assessment order to conclude that the commission payment has been made for services rendered outside India and hence the commission payment is not liable to tax in India. 3. Briefly stated, in the course of assessment proceedings t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and see that the buyer is creditworthy, the (ii) ensuring payment and sale proceeds are remitted. It is a commission simplicitor as the services are rendered outside India and commission agent is not liable to tax in India. As stated the agent has no business connection or any establishment in India and relying on the circular No. 23 dated 23.07.1969 and circular No. 786 dated 07.02.2000, it was submitted that no tax was deductible under section 195. Assessee also relied on the decision in the case of Spahi Projects Pvt. Ltd. 315 ITR 374 in this regard. The learned CIT(A) examined the issue and deleted the addition on the following reasons: - 4.5 I have gone through the submission of the appellant and have also noted in detail the obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there was no such disallowance and the issue of TDS never arose as the said person has no permanent establishment in India and the amount was not taxable as the services were not rendered in India. He relied on the following case laws: - i. Spahi Projects (P) Ltd. 315 ITR 374 (AAR) ii. Armayesh Global vs. ACIT 45 SOT 69 (Mum) iii. CIT vs. Toshoku Ltd. 125 ITR 525 (SC) iv. Sheraton International Inc. vs. Dy. Director of Income Tax 107 ITD (Del) v. Linde A.G. vs. ITO 62 ITD 330 (Mum) He also placed on record the appointment order given by the assessee to support the fact that Shri Mahendra Singh Jamnadas is a resident of Portugal. 6. We have examined the issue. It is on record that the said agent was rendering servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment in India. It worked abroad and procured orders. The orders were sent directly by the foreign purchasers remitted to the assessee in India and even the payment for export was received by the assessee in foreign currency directly from foreign purchasers and the commission was paid to foreign agent thereafter as a percentage of sales in terms of the agency agreement. The payment made to overseas commission agent by the assessee was not for technical/managerial services. Therefore, in the absence of any service having been rendered in India, no part of the commission paid to the overseas agent could be said to be chargeable in India and in the absence of any income chargeable to tax in India, question of applying section 195 did not arise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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