9911796707
TMI Blog2017 (10) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... ,046/- pad as Commission on Sales. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the disallowance of Rs. 32,663/- from Credit Card expenses, on erroneous considerations. 3. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming ad-hoc disallowances made by the Assessing Officer @ 10% of Telephone, Insurance, Business Promotion & Vehicle Maintenance expenses, without bringing on record a single instance of personal expenditure or referring to any evidence in this regard. 2. The facts in brief of the case are that the assessee, an individual, was engaged in manufacturing and export of apparels during the year under consideration. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, no Tax was Deducted at Source (TDS) on the remittance made to the foreign agents for the services rendered by them outside India. On the basis of brief description of the note given by the Authorized Representative, the Assessing Officer concluded that the assessee made payment to the non-resident for exploring business opportunities in abroad, exploring overseas market and to realize the sale consideration which tantamount to "fee for consultancy services". According to the Assessing Officer, the assessee obtained professional advice and services in a specialized field, which falls under the "fee for consultancy services" and as per section 9(1)(vii) read with Explanation - 2, the income of the non-resident in respect of payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es only. Placing reliance on various judicial pronouncements, It is being claimed that commission paid to non-resident foreign agent for procuring export orders cannot be equated with either to rendering of technical services or managerial or consultancy services. Although appellant explained that the payment received by foreign national is a commission payment to procure orders in abroad but no documentary evidence has been provided even during the appellate stage, the basis on which it can be held that the scope of work of the foreign national was limited only to procure orders for the appellant and does not require any specialized services In the nature as managerial, technical and consultancy In nature. The fact cannot be denied that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to explain and substantiate that its facts are similar and identical to those cases. In the absence of any documentary evidence, assessee has failed to justify that payment made to the foreign national was commission in nature whereas in all the cases relied upon the issue involved was taxability of commission income in the hands of foreign national paid in foreign country. Hence, no interference is called for to the finding given by the AO that amount of Rs. 31,61,046/- is nothing but fees for consultancy services, which has been claimed as commission payment, without any corroborative documentary evidence. Accordingly, the addition made by the AO is upheld." 3.3 Before us, the ld. counsel filed a paper book containing pages 1 to 133. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required documentary evidences. In view of the facts and circumstances of the case, we are of the opinion that the issue of holding the services rendered by the agent as fee for consultancy services, need reexamination by the Assessing Officer. Accordingly, we restore the matter to the file of the Assessing Officer for re-examination of the issue in dispute. The assessee shall be free to submit any evidence(s) to substantiate its claim that the payments made are purely in the nature of commission and not falling under fee for consultancy services liable to be taxed in the hands of foreign agent in terms of Section 5 read with Explanation -2 to section 9(1)(vii) of the Act. The assessee shall be provided sufficient opportunity of being heard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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