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TMI Blog2016 (6) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... n order for the sake of convenience. 2. Grounds raised in ITA No.442/Bang/2015 for A.Y. 2008-09 are as under:- "1. The order of the Commissioner of Income Tax (Appeals)- 12, Bengaluru is opposed to law and facts of the case. 2. The Hon'ble Commissioner of Income Tax (Appeals) ought to have held that the provisions of Section 201(1) & 201(1A) are not applicable in the facts and circumstances of the case. 3. The Hon'ble Commissioner of Income Tax (Appeals) ought to have held that there was no statutory obligation on the appellant to deduct tax on the commission paid to the nonresident agents. 4. Alternatively and without prejudice, assuming there was a default on the part of the appellant the act of non-deduction is attrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. CIT(Appeals) are available on pages 13 to 18 of the Paperbook and as per the same, it could be seen that it is the submission of the assessee before the CIT(A) that even if the payment to the non-resident is liable to incidence of tax under the provisions of the Act and in the event of contrary provisions in the DTAA, then the said provisions of DTAA will prevail over the provisions of the Act, if the provisions of DTAA are more beneficial to the assessee under sub-section (2) of section 90 of the I.T. Act. He also submitted that relevant provisions of the DTAA between India and State of Qatar are available at pages 20 to 39 of PB. In particular, our attention was drawn to page 25 of PB containing Article 7 of DTAA and it was pointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its own another Ruling in Ind. Telesoft P. Ltd., 267 ITR 725 (AAR) and it is stated that in that case, agents were securing business from outside India and this Ruling was distinguished by AAR in the case of Rajiv Malhotra (supra) by stating that the facts in that case are different, because in that case, the non-resident agents secured business from persons abroad who are to be persuaded to book the space and participate in the exhibition and to pay charges therefor. It was submitted that in the present case, the facts are similar to the facts in the case of Ind. Telesoft P. Ltd. (supra) and this Ruling of AAR is in favour of assessee. It was submitted that the ld. CIT (Appeals) was not justified in following the Ruling of AAR in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, unless the enterprise carries on business in the other contracting States through a PE situated therein. Therefore, in the absence of a finding that commission agents are having PE in India as per Article 7 of DTAAs between India and these countries, the business profit of commission agents cannot be brought to tax in India and as per section 90(2), if DTAA is more beneficial than the domestic laws, then DTAA has to prevail. 10. In this view of the matter, the order of AO and CIT (Appeals) are not sustainable because in the facts of the present case and legal position as discussed above, commission payment made by the assessee to these commission agents outside India for procuring export orders cannot be brought to tax in India and as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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