9911796707
TMI Blog2018 (6) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... gs u/s. 143(3) of the Income Tax Act, 1961; in short 'the Act'. Heard both the parties. Case files perused. 2. It emerges at the outset that Revenue's grievance is identical in both the impugned assessment year(s). It seeks to restore the Assessing Officer's action disallowing assessee's commission expenditure of Rs.83,20,320/- in former and Rs.57,31,800/- in latter assessment year in respect of export overseas representation charges paid to USA based payee M/s Allcast Corporation without deducting TDS. Both the Learned Representatives fairly suggest that the CIT(A)'s finding in latter assessment year follows his detailed discussion in former assessment year reading as under:- "8- Ground No (ii) relates to contention of the appellant aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. Since, the appellant fail to deduct tax as provided u/s. 195 of the IT Act, 1961, the AO made disallowance u/s 40(a)(i) of the IT Act, 1961. Further, the AO noted that the appellant did not procure a no deduction certificate from the Department provided u/s 195(2) of the IT Act, 1961. However, the appellant submitted that they required service in USA and Canada from the aforesaid company from the very beginning, hence, payment of Overseas Representation Charge was being made since beginning. They have given the details o payments made by them from FY 2007-08 onwards and also the details of export sales made those years. Thereby, the payments made was genuine and made in connection with the business of the appellant. Further, the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney was paid with reference to procuring export orders outside India. The AO had not brought any material on record to establish that the relevant income accrued to the company in India as stipulated u/s. 9 of the IT Act. The amount was paid for promoting propagating and enhancing the business of the appellant as mentioned in the agreement. In view of the above discussion, since provision of sec. 195 is not applicable on the payment made by the appellant to the aforesaid company, the AO was no justified to invoke section 40(a)(i) of the IT Act. Hence, appeal on this ground is allowed." Mr. Dasgupta vehemently contends during the course of hearing that the CIT(A) has erred in law as well as on facts in deleting the impugned disallowance(s) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that where the Government of India has executed such a Double Taxation Avoidance Agreement then, in relation to an assessee to whom the same applies, the provision of the Act would be applicable to the extent there are more beneficial. We conclude in these facts that once the assessee's payee derives business profits in question without having permanent establishment not taxable in India, the instant taxpayer's case is very well covered under Article 7 of the Indo-USA Double Avoidance Agreement. We thus conclude that CIT(A) has rightly it reversing the Assessing Officer's action invoking the disallowance(s) in both these assessment year(s). This Revenue's identical substantive grounds raised in these two appeals fail therefore. 3. These ..... X X X X Extracts X X X X X X X X Extracts X X X X
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