TMI Blog2016 (4) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent : Mrs.Vasanti B Patel ORDER PER SANDEEP GOSAIN, JM: By way of this appeal, the revenue is challenging the order dated 13.3.2013 passed by the ld.CIT(A)-13, Mumbai for the assessment year 2009-10 wherein it has challenged the deletion of addition made by the AO u/s 40(a)(i) of the Income Tax Act, 1961. 2. Assessee filed return declaring total income of ₹ 24,12,74,491/- on 30.9.2009. The assessee is engaged in the business of export of garments manufactured by it. On perusal of accounts it was observed by the assessing officer that the assessee has paid a sum of ₹ 6,79,40,492/- and no TDS was deducted. Therefore, the AO called the assessee to explain as to why this amount should not be added to the total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in the case of ACIT V/s Vilas N Tamhankar (2015) 55 taxmann.com 413 (Mumbai), wherein directions of the CBDT circular have been followed and allowed the claim of the assessee, he also relied on the decision of Delhi Bench of the Tribunal on the similar issue in the case of Welspring Universal V/s JCIT reported in (2015) 56 taxman.com 175 (Delhi.Trib). 5. We have heard the parties at length and perused the record. We find that the assessee has paid commission to a person who is non-resident. As per the CBDT Circular supra, if a person pays commission to the non-resident no tax be deduced from the payment. We find that an identical issue had come up before the Mumbai Bench of the Tribunal in Vilas N Tamhankar(supra) and Welspring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter XVII-B are attracted to the impugned payment. The payments to a non-resident being covered under section 195, we begin by reproducing the same in its relevant part, the interpretation of which is in issue: 'Other sums. 195. (1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest (not being interest referred to in section 194LB or section 194LC) or section 194LD or any other sum chargeable under the provisions of this Act (not being income chargeable under the head Salaries shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said decision. As explained by the apex court therein, if the interpretation being accorded by the Revenue to section 195, i.e., that the moment payment to a non-resident is made, the obligation to deduct the tax at source (TAS) arises, is accepted, the same would imply obliterating the words 'chargeable under the provisions of the Act' occurring in section 195(1). Section 195 falls under Part B of Chapter XVII of the Act, titled 'collection and recovery of tax'. As explained therein, the Act forms one integrated code, and the charging sections cannot be read de hors the machinery sections. Due weight has to be given to every word in the section. The interpretation by the Revenue was, in its view, guided more by admini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation of the person responsible for paying this sum to deduct income tax thereon before making the payment, it was explained, were made in that context. In our view too, the said decision by the apex court, which we find to be in consonance with the decisions rendered earlier, as in CIT v. Cooper Engg. Ltd. [1968] 68 ITR 457 (Bom.); CIT v. Eli Lilly Co. (India) (P.) Ltd. [2009] 312 ITR 225/178 Taxman 505 (SC); Vijay Ship Breaking Corpn. v. CIT[2009] 314 ITR 309/[2008] 175 Taxman 77 (SC) and, rather Transmission Corpn. of A.P. Ltd. (supra) as well, squarely covers the facts of the instant case. The Revenue, to enable us to disturb the like finding by the ld. CIT(A), ought to have explained as to how it is infirm or does not amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) a residence or place of business or business connection in India; or (ii) any other presence in any manner whatsoever in India.' The same, however, in our view, would not operate to disturb the law as enunciated in GE India Technology Centre (P.) Ltd. (supra), except where the basis of the payer's belief, i.e., as to the non-chargeability of the payment to tax in India, is on the ground that the payee has no place of business or business connection or otherwise any presence whatsoever in India. In the present case, the edifice of the assessee's case is the rendering of the services outside India. Therefore, though for a consideration for marketing and sale support services and, thus, only in the nature of commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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