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2017 (1) TMI 1330 - ITAT CHENNAI

2017 (1) TMI 1330 - ITAT CHENNAI - TMI - Reopening of assessment - Disallowance being commission paid by the assessee to a Non-Resident Agent - Held that:- Nature of commission paid by the assessee was not proved in the absence of agreements. That apart, we find that the reopening was initiated after four years from the end of the assessment year. In the original assessment assessee had produced all details which were called by the ld. Assessing Officer. For a reopening after four years it is ne .....

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that assessee has to succeed in all the grounds raised by it. - Decided in favour of assessee - I.T.A. No.3061/Mds/2016 - Dated:- 25-1-2017 - SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER For The Appellant : Shri. R. Kumar, Advocate For The Respondent : Shri. Supriya Pal, IRS, JCIT. ORDER Assessee in this appeal apart from assailing validity of the reassessment pursuant to reopening done for the impugned assessment year, is also aggrieved on a disallowance of ₹ 13,55,520/- being commission pai .....

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pairs expenditure were made by the ld. Assessing Officer, for failure of the assessee to produce entire vouchers. Thereafter the assessment was reopened on 20.03.2014 by issuing notice u/s.148 of the Act. In the course of such reassessment, it was noted by the ld. Assessing Officer that assessee had debited a sum of ₹ 8,24,320/- as commission payment to Non-Resident. As per ld. Assessing Officer such commission was for the purpose of sales of the assessee outside India through foreign agen .....

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ed deduction of tax at source irrespective of the fact whether the Non-Resident concern had a place of business or business connection or any presence in India. Thus, he held that assessee had failed to deduct tax at source at the commission of ₹ 8,24,620/- paid to the Non-Resident Agent attracting the rigours of Sec. 40(a)(i) of the Act. He disallowed the claim and completed reassessment. 3. Aggrieved, the assessee moved in appeal before ld. Commissioner of Income Tax (Appeals). Assessee .....

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8 on 28.10.2007 declaring income of _4,74,300/- , the case was selected for scrutiny and was completed u/s143(3) on 3.11.2009. The firm in its return of income filed u/s139(1) has debited a sum of ₹ 8,24,320/- with the description "In foreign currency to non-residents" on which TDS has not been deducted. The case was reopened u/s147 by issuing u/s148 to the firm and was duly acknowledged on 20.3.2014. The case was completed on 20.10.2014 determining the total income at _13,55,529 .....

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007-08.· In response to the opportunity letter issued, Shri G.Pari CA, appeared filed the copy of additional evidences produced before CIT CA) and the case was discussed. After verification of the copy of additional evidences such as invoices copies, shipping bills, purchase orders and ledger submitted by the assessee, the remand report on the issue of foreign commission payment is submitted herein below. During the course of remand proceedings the assessee has been asked to produce the c .....

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d that the assessee has paid the commission to the following person as a fixed percentage on the turnover brought by foreign agents. Sl. No Name of the Agent % of Commission paid Amount paid in USD Amount paid in INR 1 LINFOOT CO. LTD. Tiwan 5 3910.45 181000 2 LINFOOT CO. LTD. Tiwan 5 7468.00 336060 3 LINFOOT CO. LTD. Tiwan 5 6828.00 307260 During the course of remand proceedings, the assessee relief on the decision of the Hon'ble Supreme Court. in the case of M/s GE India Technology Centre .....

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ore the provisions of section 195 has no application in such cases. The assessee also relied on the decision of the Hon'ble Madras High Court in the case of CIT Vs Faizan Shoes P. Ltd. (2014)367 ITR 155. The additional information firled by the assessee has been verified and it is seen the facts of the assessee's case is similar to M/s GE India Technology Centre P. Ltd. vs CIT & M/s. Faizan Shoes P. Ltd on the issue of foreign commission . Nevertheless ld. Commissioner of Income Tax .....

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thus affirmed the order of the ld. Assessing Officer. 4. Now before me, ld. Authorised Representative strongly assailing the orders of the lower authorities submitted that ld. Assessing Officer in the remand report had specifically stated that the facts in assessee s case were similar for that of GE India Technology Centre P. Ltd vs. CIT 327 ITR 456 decided by Hon ble Apex Court and that of Faizan Shoes (P) Ltd (supra) decided by Hon ble Jurisdictional High Court. Further, according to him the r .....

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