TMI Blog2017 (2) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... e, TDS was not required to be made. However, as regards the balance sum of ₹ 34,000/- which were in the nature of professional charges, TDS was required to be made. By considering the nature of payment vis-à-vis reimbursement the CIT(A) confirmed the addition of ₹ 34,000/-, whereas deleted the addition of ₹ 72,970/-, which was towards reimbursement of expenses. We do not find any infirmity in the order of CIT(A) for deleting disallowance of ₹ 72,980/-. - ITA Nos.3348,3349&5445/Mum/2014 - - - Dated:- 25-11-2016 - SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM For The Revenue : Shri Vivek Batra For The Assessee : Shri Hari Raheja ORDER PER R.C.SHARMA (A.M) : These are the appeals filed by the revenue against the order of CIT(A)-Mumbai, for the assessment years 2009-10, 2010-11 2011-12, in the matter of order passed u/s.143(3) of I.T. Act. 2. Common grievance of the revenue in all the years pertains to deleting disallowance made on account of payment made for export commission on which no TDS was deducted and assessee was found to be in default by the AO u/s.195 of the I.T.Act. The disallowance so made by the AO was deleted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts as also the case laws cited in respect of the export commission, I find that Hon'ble Supreme Court in the case of G.E. India Technology Centre Pvt. Ltd., 327 ITR 456 (SC) held that a person paying interest or any sum to a non-resident is not liable to deduct tax if such sum is not chargeable to tax under the Income Tax Act, 1961. It further held that if the contention of the Department that the moment there is remittance, the obligation to pay tax arises is to be accepted, then the words 'chargeable under the provisions of the Act' in section 195(1) would stand obliterated. 2.4.10 In the case of Adidas Sourcing Ltd. (2012) 28 taxmann.com 267 (Del-Trib) it was held that income from services rendered by assessee non-resident company to resident company for sourcing of goods from outside India was commission and not fees for technical services. Similarly, in the case of Angelique international Ltd. (2012) 28 taxmann.com 219 (Del-Trib) it was held that export commission paid to a non-resident agent for services rendered outside India was not chargeable to tax in India. 2.4.11. A similar view has also been taken by the Hon'ble Mumbai Bench of ITAT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Ardeshi and Curstejee Sons Ltd. (2008) 7 DTR 51 has held that the foreign agents right to receive the commission is acquired as and when services are rendered. Since services are rendered abroad, the right to receive the commission is consequentially acquired outside India. The accrual of Income is also outside India. Hence the commission income of foreign agent paid by Indian exporter is not chargeable to tax in India. 2.4.17 Further by way of Explanation I, clause (a) S.9(1) clarifies that in the case of a business of which all the operations are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. 2.4.18 Hence if no operations are carried out in India by the non-resident, then there would be no income deemed to accrue or arise in India. The income of the nonresident can be considered as deemed to accrue or arise in India only if the nonresident is having Business Connection in India. 2.4.19 The term business connection is elaborated in Explanation 2 to S. 9(1) of the Act, and is discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance should be made towards the same. In any case, the Ld. AO has not doubted the veracity of the payment. Accordingly, ground Nos 1 to 3 are allowed. 3. It is clear from the order of the CIT(A) that after relying on the various judicial pronouncements including Hon ble Supreme Court and Mumbai Tribunal, the CIT(A) found that export commission paid outside India on service rendered outside India was not liable to deduction of tax at source, consequently no disallowance is warranted. 4. We have carefully gone through the orders of authorities below and found that issue is squarely covered by the various decisions of Hon ble Supreme Court, High Court and various Tribunal as discussed by CIT(A) in his order. Ld. DR also fairly conceded that issue is covered by various orders of the Tribunal, High Court and Hon ble Supreme Court as discussed by CIT(A). Accordingly, we do not find any reason to interfere in the order of CIT(A) for deleting the disallowance made on account of export commission paid without deduction of tax at source. 5. In the assessment year 2009-2010 2010-2011, the revenue has also taken a ground with regard to deleting disallowance on account of mark to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insofar as in the remand report itself the AO has verified assessee s loss so claimed and found the same to be explained. We do not find any infirmity in the order of CIT(A). 8. In the assessment year 2009-2010, the revenue is also aggrieved for deleting the disallowance of ₹ 72,970/- paid for professional and technical services without deduction of tax at source. 9. We have considered rival contentions and found that out of the sum paid amounting to ₹ 1,06,908/-, ₹ 72,980/- related to reimbursement of expenses in the form of document attestation fees, translation charges etc. and hence, TDS was not required to be made. However, as regards the balance sum of ₹ 34,000/- which were in the nature of professional charges, TDS was required to be made. By considering the nature of payment vis- -vis reimbursement the CIT(A) confirmed the addition of ₹ 34,000/-, whereas deleted the addition of ₹ 72,970/-, which was towards reimbursement of expenses. We do not find any infirmity in the order of CIT(A) for deleting disallowance of ₹ 72,980/-. 10. In the result all appeals of the revenue are dismissed. Order pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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