TMI Blog2016 (5) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of payment - disallowance u/s 40(a)(i) - Held that:- The issue raised herein stands concluded against the Revenue and in favour of the respondent assessee by the decision of this Court in CIT Vs. Gujarat Reclaim & Rubber Products Ltd. (2015 (12) TMI 1078 - BOMBAY HIGH COURT) and Director of Income Tax (IT)I Vs. M/s. Credit Lyonnais (2016 (3) TMI 735 - BOMBAY HIGH COURT) wherein held there was no occasion to deduct tax at source in respect of the payment made to the nonresident agent. The income of nonresident commission agent cannot be considered as income arising or accruing in India. Therefore, the provisions of Section 40(a)(i) would have no application - Decided in favour of assessee - Income Tax Appeal No. 2370 of 2013 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of Section 40(a)(i) of the Act for failure on the assessee's part to deduct tax at source therefrom 3. Re. Question no. (i) : (a) During the subject assessment year, the respondent assessee paid commission of ₹ 1.13 crores to one Mr. John V. Smith for the purposes of promoting sales of plywood in foreign countries. The Assessing Officer disallowed the payment of commission of ₹ 1.13 crores. This inter alia on the ground that the agreement is on the letter head of the respondent assessee and not on a nonjudicial stamp paper nor it is registered with a competent Authority. Besides, the agreement mentions the name of the agent as Mr. John V. Smith when the commission has been paid to Mr. Jonathan Smith. Moreover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to this person as shown in his bank account. The aforesaid information was forwarded to the Assessing Officer for his remand report. The Assessing Officer pointed out that as the documents are self serving and that an appellate authority should not entertain further evidence. The Commissioner of Income Tax (Appeals) on consideration of all the facts finally came to the conclusion that the payment of ₹ 1.13 crores was in fact made by the respondent to Mr. John Smith / Mr. Jonathan Smith and received by him. It also found that 12% of export sales did aggregate to ₹ 1.13 crores which establishes a direct connection between export sales and the payment of commission made to Mr. John Smith / Mr. Jonathan Smith. Therefore, holding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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