TMI Blog2019 (7) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer that any lumpsum consideration has been made for any specific managerial, technical or consultancy services. On a overall reading of the Explanation, it is apparent that fees for technical services does not contemplate commission which is order specific and computable at a small percentage of the order value. Section 40(a)(i) does not contemplate order wise commission based on the order value. - Decided in favour of assessee. - Tax Case Appeal No.423 of 2019 - - - Dated:- 5-7-2019 - Mr. Justice T.S. Sivagnanam And Mrs. Justice V. Bhavani Subbaroyan For the Appellant : Mr.Karthik Ranganathan, SC assisted by Mr.S.Rajesh For the Respondent : Mr.Sandeep Bagmar Mr.SP.Chid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The learned Standing Counsel appearing for the Revenue submits that the substantial questions of law raised in this appeal were considered by the Hon'ble First Bench of this Court in the case of M/s.Evolv Clothing Company Pvt. Ltd. Vs. ACIT [reported in (2018) 407 ITR 72] and the questions were answered against the Revenue. 5. The relevant portions in the said judgment read thus : 30. There is no finding that any of the commission agents had any place of business in India. Explanation 1 to Section 9(1)(i) of the IT Act would attract liability to Indian tax for a nonresident with business connections in India, only in respect of income attributable to his operations in India. In this case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department, namely, that the moment there is remittance the obligation to deduct TAS arises. If we were to accept such a contention it would mean that on mere payment income would be said to arise or accrue in India. Therefore, as stated earlier, if the contention of the Department was accepted it would mean obliteration of the expression sum chargeable under the provisions of the Act from Section 195(1).' 32. Where there is no liability in India, there can be no question of disallowance under Section 40(a)(i) or Section 40(a)(ia) of the IT Act on the ground of non-deduction of tax at source. Moreover, where a non-resident has no permanent establishment in India, there can be no liability either und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture on export commission payable to non-residents for services rendered outside India becomes allowable expenditure. In Toshoku Ltd., supra, the Supreme Court held that payments to agents for performance of services outside India are not liable to be taxed in India. 35. In Commissioner of Income Tax, Delhi-IV, New Delhi v. EON Technology (P) Ltd., (2011) 15 Taxmann.com 391 (Delhi), the High Court of Delhi held that payment of sales commission to nonresident who operates outside the country would not attract tax, if payment was remitted abroad directly. Merely because an entry had been made in the books of accounts of the appellant/assessee, that would not mean that the non-resident agent had received payment in India a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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