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TMI Blog2018 (2) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax (Appeals)-2, Kolkata dated 05.07.2016. 2. First we take up the appeal of the Revenue being ITA No. 1982/KOL/2016, which involves a solitary issue relating to the deletion by the ld. CIT(Appeals) of the addition of Rs. 49,62,570/- made by the Assessing Officer on account of disallowance under section 40(a)(i) of the Act on account of commission paid to non-resident parties. 3. The assessee in the present case is a Company, which is mainly engaged in the business of procurement, processing and shipment of tea and jute. The return of income for the year under considerat ion was originally f i led by it on 25.09.2010 declaring loss of Rs. 2,15,95,472/-. Thereafter a revised return was f i led by the assessee-company on 27.01.2012 decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and fol lowing the decision of Tribunal in assessee's own case on a similar issue for A.Y. 2007-08, wherein the similar disallowance made in section 40(a)(i) was deleted by the Tribunal, the ld. CIT(Appeals) deleted the disallowance made by the Assessing Officer under section 40(a)(i) in the year under consideration. Aggrieved by the same, the Revenue has preferred this appeal before the Tribunal . 5. We have heard the arguments of both the sides and also perused the relevant material available on record. The ld. D.R. has contended that the ld. CIT(Appeals) has simply fol lowed the Tribunal 's order in assessee's own case for A.Y. 2007-08 to delete the disallowance made by the Assessing Officer under section 40(a)(i) wi thout considering a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Act, shall only be 00subject to the provisions of TDS, Now the questions arises what incomes are chargeable to tax in India, for this we need to refer section 5(2) of the Act which says that a non resident is taxable in India on the fol lowing incomes during the previous year: » Income received/ deemed to be received in India. » Income accruing/ arising or deemed to accrue/ arise in India. Section 7 & 9 of the Act provides the income deemed to be received AND income deemed to accrue or arise in India. As per the sect ion 9 of the Act, the above expenses for advertisement in Russia and commission payment to foreign parties/ NRI are not the income deemed to accrue or arise in India, Hence not chargeable to tax". 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see at the time of hearing before the Tribunal . 8. The only ground that survives for our consideration is Ground No. 2, which involves the issue relating to the disallowance of Rs. 1,24,000/- made by the Assessing Of f icer and confirmed by the ld. CIT(Appeals) under sect ion 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. 9. During the year under consideration, the assessee-company had earned dividend income of Rs. 2,95,000/-, which was claimed to be exempt from tax. No disallowance on account of expenditure incurred in relation to the said exempt income, however, was offered by the assessee as required by the provisions of sect ion 14A. The Assessing Officer, therefore, worked out such expenditure at Rs. 1,24,000/- by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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