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TMI Blog2015 (2) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... f non-deduction of TDS on payment of commission to Foreign Agent without appreciating the facts brought on record by the Assessing Officer during the course of assessment proceedings. 2. That the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in not appreciating the fact that the payment by the resident assessee in connection with its business in India to a person outside country is nothing but a fee which has been paid by the resident assessee to the non-resident for the technical services rendered by him. 3. That the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in not appreciating the fact that in the assessment order the AO has pointed out that the services rende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out considering the Board's circular No.7/2009 dated 22.10.2009. 8. That the order of the Ld. CIT (A)-II, Kanpur dated 10.06.2014 needs to be quashed and the order passed by the Assessing Officer dated 26.11.2013 to be restored." 3. None appeared on behalf of the assessee on the appointed date of hearing in spite of notice and hence, we proceed to decide this appeal of the assessee ex-parte qua the assessee. 4. Learned D.R. of the Revenue supported the assessment order. 5. We have considered the submissions of Learned D.R. of the Revenue, perused the material available on record and gone through the orders of the authorities below. We also find that the paper book of 71 pages was submitted by Learned A.R. of the assessee and hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act as has been made by the Assessing Officer. 6. Now, we examine other contentions raised by the Revenue in its grounds. In ground No. 6, the Revenue has raised the issue regarding applicability of the explanation in sub section (2) of section 9 inserted by Finance Act, 2010 with effect from 01/06/96. We have considered this explanation and we find that as per this explanation, income of non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) of section 9 of the Act even if the non-resident does not have a residence or place of business or business connection in India and non-resident has not rendered services in India. As per this explanation in sub section (2) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n India without the help of Circular No. 786 dated 07/02/2000, income is not taxable in India in the hands of those non-resident commission agents and therefore, TDS was not required to be deducted and as a consequence, no disallowance can be made u/s 40(a)(i) in respect of those payments. 8. The CIT(A) has decided the issue by following various judgments including a judgment of Hon'ble Delhi High Court rendered in the case of DIT v. Sheraton International Inc. [2009] 313 ITR 267. The CIT(A) has also followed Tribunal decision in the case of ITO v. Faizan Shoes (P.) Ltd. [2013] 58 SOT 245 (Chennai - Trib.). In that case, the assessee was engaged in the business of shoe uppers and leather shoes and paid certain commission to non-residen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were rendered in India or outside India and whether the payment was made in India or outside etc. Since, in the present case, this is not a case of the revenue that the services were rendered in India or the payment was made in India and the incomes in the hands of the non resident agent can be considered as deemed to accrue or arise in India by way of operation of section 9 (1), no disallowance can be made u/s 40(a)(i) of the Act. We have also considered the explanation to section 9(2) and have seen that this explanation also has no relevance in the present case and therefore, we decline to interfere in the order of CIT(A). 10. In the result, the appeal of the revenue stands dismissed. (Order was pronounced in the open court on the da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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