TMI Blog2018 (11) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer holding that on the reasoning that the assessee has realised only net amount and further the impugned payments are not liable for deduction of tax at source, since the same is not taxable in India in the hands of recipients. Following the same, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance - Decided in favour of assessee. - ITA no.630/Mum./2018 - - - Dated:- 5-10-2018 - Shri Saktijit Dey, Judicial Member For the Assessee : Shri Anuj Kisnadwala For the Revenue : Shri Swapan Kumar Bepari ORDER Aforesaid appeal has been filed by the assessee challenging the order dated 15th December 2017, passed by the learned Commissioner (Appeals) 16, Mumbai, for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowed the claim of the assessee. Without prejudice to the above, the Assessing Officer held that payment of commission is otherwise not allowable, since, the assessee has failed to deduct tax at source under section 195 of the Income Tax Act, 1961, while making such payment. Accordingly, he added back the amount of ₹ 27,13,195. 4. Though, the assessee challenged the aforesaid disallowance in appeal, however, the learned Commissioner (Appeals) also sustained the disallowance made by the Assessing Officer by relying upon his own order on identical issue raised by the assessee in assessment year 2009 10. 5. The learned Authorised Representative reiterating the stand taken before the Departmental Authorities submitted that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Having heard rival contentions, we find merit in the contentions of the assessee. The invoice raised by the assessee as well as the Letter of Credit obtained by the customer of the assessee from bank clearly show that 2% commission was payable to local agents. It was submitted that the same was paid as per terms and conditions entered between the parties. In effect, what the assessee realised was only 98% of the invoice value. Even if the assessee was not able to substantiate the nature of services provided by the local agents, the shortage in realisation is allowable as normal business deduction. Since the impugned payment is not chargeable to tax in India in the hands of recipients, the provisions of sec. 40(a)(i) will not apply. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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