TMI Blog2016 (6) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... e, profits of an enterprise of a contracting State shall be taxable only in that State, 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. Thus 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 consequence, TDS is not deductible - Decided in favour of assessee. - IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deduct tax u/s 195 arises only when the said payments made are chargeable under the provisions of the IT Act. 6. Alternatively and without .prejudice the Hon'ble Commissioner of Income Tax (Appeals) was bound by the circulars issued by the Central Board of Direct Taxes as regards the interpretation of Section 195 to the effect that when the payment is made to a non resident having no permanent establishment in India the provisions of Section 195 is not applicable. 7. The appellant craves for leave to add to, delete from or amend the ground of appeal. 3. The grounds raised in the remaining two appeals are identical and therefore, for the sake of brevity, these grounds are not reproduced. 4. First of all, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless the enterprise carries on business in other contracting State through a Permanent Establishment (PE) situated therein. It was further submitted that it is nobody s case that the agents to whom commission was paid were having PE in India. It was also submitted that the relevant provisions of DTAA between India and Republic of South Africa are available at pages 40 to 61 of PB; between India and Kingdom of Spain at pages 62 to 87 of PB; between India and Govt. of USA at pages 88 to 115 of PB; between India and Singapore at pages 116 to 132 of PB; and between India and Govt. of Argentina Republic at pages 133 to 144 of PB. It was also submitted that in all these DTAAs, the provisions are same and therefore, the commission income earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of SKF. Boilers Driers (P.) Ltd., 345 ITR 385 (AAR), the ld. AR of assessee submitted that in that case, benefit under the provisions of DTAA was not claimed by the assessee, whereas in the present case, the assessee is claiming benefit under DTAA and therefore, this Ruling is also not applicable in the present case. 7. The ld. DR supported the orders of revenue authorities. 8. We have considered the rival submissions. First of all, we will examine the validity of the action taken by the Assessing Officer. AO has proceeded on this basis that as per Explanation 2 to section 9(1) (i), business connection shall include any business activity which is carried out through a person acting on behalf of non-resident, as noted by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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