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TMI Blog2017 (5) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... . [2.0] Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad "I" Bench (hereinafter referred to as "the learned tribunal") in ITA Nos.1708/Ahd/2012 & ITA No.178/Ahd/2016 for the Assessment Years 2009-10 and 2012-13 by which the learned tribunal has dismissed the said Appeals preferred by the revenue and has confirmed the order /orders passed by the learned CIT(A) deleting the additions made by the Assessing Officer made on account of disallowance of the claim of the respondent - assessee with respect to the commission paid to the foreign agents, revenue has preferred the present Tax Appeals with the following proposed questions of law TAX APPEAL No.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious cases and as also mentioned by the AO in his assessment order?" (B) "Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is justified in deleting the addition by ignoring that at no point of time assessee could produce evidences of services rendered by the alleged commission agent and thus not fulfilled the condition envisaged in Section 37(1), as held by the Hon'ble ITAT, Ahmedabad in the case of M/s. Desai Fruits & Vegetables Pvt. Ltd. in ITA No.1707/Ahd/2012?" [3.0] The facts leading to the present Tax Appeal in nutshell are as under; [3.1] The respondent - assessee filed the return of income of the Assessment Years 2009-10 & 2012-13. For the Assessment Year 2009-10 the respondent - assessee cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by booking orders in the respondent - assessee Company and also on the ground that no registered written agreement between the respondent - assessee Company and the foreign agents were produced on record, and therefore, the Assessing Officer was of the opinion that the respondent - assessee has failed to justify the claim with respect to the commission paid to the foreign agents. Similar, disallowance came to be made by the Assessing Officer for the Assessment Year 2012-13 also. However, on Appeals by the respondent - assessee, the learned CIT(A) deleted the disallowance made by the Assesssing Officer by observing that there is no plausible reason to doubt the genuineness of the commission paid to the foreign agents. The respondent - asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent - assessee of commission paid to the foreign agents, and therefore, made the disallowance. However, considering the fact that the respondent - assessee had produced the confirmation letters from the concerned foreign agents and had produced the orders /invoices on which the commission was paid to foreign agents and the commission was paid through banking channel and with respect to the very foreign agents in the earlier /previous years, the Assessing Officer accepted the claim of the respondent - assessee with respect to the commission paid to those very foreign agents, by giving cogent reasons the learned CIT(A) as well as the learned tribunal have deleted the disallowance made by the Assessing Officer. Relevant observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment made and hence, the provisions of Section 40(a)(ia) are not applicable with regard to the captioned payments to non-resident. Since the appellant has filed sufficient material including confirmation that the seven foreign agents are non-residents in India and they have neither carried out any operation in India nor they have rendered any services in India, no tax is deductible from the payment made to them and hence, the provisions of Section 195 r.w.s. 40(a)(ia) are not applicable. I, therefore, delete this addition of Rs. 69,14,768/- made by the AO. The appellant's contention in Grounds No.1 and 2 are Allowed. Ground No.3 The contention raised in Ground No.4 is such that the AO has erred in Laws and Facts, in disallowing and addin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 77,37,292 79,58,729 15,25,185 69,14,768 Assessment framed u/s 143(3)? Yes Yes Yes Yes Aforesaid commission disallowed No No No No 15. As mentioned elsewhere, the payment of commission to the same parties have been accepted in A.Y. 2006-07 & 2008-09 vide order dated 27/11/2008 & 02/12/2010 respectively made u/s. 143(3) of the Act. 16. Once, the genuineness of the expenditure has been accepted in earlier years, the payment of commission to the same parties cannot be considered as incurred for non-business purposes. Further, the commission have been paid to the non-resident who do not have any Permanent Establishment in India and, therefore, not liable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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