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TMI Blog2016 (10) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... of components and parts of various machinery. For the Assessment Year 2005-2006, the petitioner filed a return of income on 28.10.2005 declaring total income of Rs. 31.55 lacs (rounded off) along with tax audit report. The return was taken in scrutiny by the Assessing Officer during which he raised multiple queries with respect to petitioner's various claims arising out of the return. The Assessing Officer passed the order of assessment on 25.7.2007 in which he disallowed a sum of Rs. 3.11 lacs (rounded off) under Section 40(a)(ia) of the Act towards late deposit of TDS. 2.2 To reopen such assessment, the Assessing Officer issued the impugned notice. For doing so, he had recorded following reasons: "The assessee-company filed its Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment. Any addition on this issue would be based on change of opinion. (II) The question of deducting tax at source on foreign commission agent was governed by two CBDT circulars which provided that no TDS would be required. These circulars were later on withdrawn by a circular No.7 of 2009 dated 22nd October, 2009. This circular would not have retrospective effect and the assessee would be governed by the previous circulars. In this context, counsel relied on decision of Division Bench of Allahbad High Court in case of Commissioner of Income Tax and Another V/s. Model Exims reported in (2013) 358 ITR 72 (All) and of Delhi High Court in case of Commissioner of Income Tax V/s. Angelique International Ltd. reported in (2013) 359 ITR 9 (De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn filed along with all annexure. 7. In response to such queries, the assessee under a letter dated 7.6.2007, provided the following answers: (d) The copy of account of sale commission is attached herewith. (Page:77 to 78) The remaining details will be placed on your record in the next hearing. (h) The copy of TDS return in Form No.24,26 and 27A of scrap and annual sales tax return for F.Y.2004-2005 are attached herwith. (Page : 207 to 218). 8. Along with such reply, the assessee also produced the details of sales commission to various parties. It is not necessary to reproduce the entire document. Suffice it to record that this total of foreign commission of Rs. 6.10 lacs comprised of various sums paid to the assessee's foreign agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, to the extent the Assessing Officer wanted to, disallowed the expenditure on the assessee's failure to deposit the tax deducted at source. He, however, did not disturb the assessee's claim of expenditure of foreign commission though apparently no tax was deducted at source on such commission. Only on this ground, the notice must fail. 11. Prima-facie, we also feel the requirement of deducting tax at source itself in the present case is hugely doubtful. There is nothing on record to suggest that the foreign agents had any establishment in India or in any manner the income accrued or arose in India. Even when the petitioner raised such an objection before the Assessing Officer, he rejected the objection without dealing w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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