TMI Blog2019 (8) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... dent agents appointed by the assessee for procuring export orders do not have permanent establishment in India. Their agents are situated outside India. Their activities as commission agents are being carried out outside India. The Tribunal therefore correctly held that there was no liability on the assessee to deduct tax at source. Merely because a portion of the sale to the overseas purchasers took place in India, would not change situation vis a vis the commission agents. Relying on assessee own case [ 2018 (10) TMI 615 - GUJARAT HIGH COURT] . - Revenue appeal dismissed. - R/TAX APPEAL NO. 281 of 2019 - - - Dated:- 30-7-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Appellant (s) : MRS MAUNA M BHAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y same assessee this Court decided both the questions proposed against the Revenue. 3.1 As regards the first question proposed by the Revenue referred to above, this Court observed as under : 8. We may recall the Assessing Officer does not dispute that the expenditure was capital in nature since by making such expenditure, the assessee had acquired certain enduring benefits. He was, however, of the opinion that to claim depreciation, the assessee must satisfy the requirement of section 32(1)(ii) of the Act, in which, Explanation 3 provides that for the purpose of the said sub-section the expression assets would mean [as per clause (b)] intangible assets, being knowhow, patents, copyrights, trade m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not of the same kind and are clearly distinct from one another. The legislature thus did not intend to provide for depreciation only in respect of the specified intangible assets but also to other categories of intangible assets which may not be possible to exhaustively enumerate. It was concluded that the assessee who had acquired commercial rights to sell products under the trade name and through the network created by the seller for sale in India were entitled to depreciation. 10. In the present case, Mr Patel was erstwhile partner of the assessee. The assessee had made payments to him to ward off competence and to protect its existing business. Mr. Patel, in turn, had agreed not to solicit contract or seek business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total commission of ₹ 1.49 crores (rounded off) paid during the year. On such commission paid to nonresidents, the assessee had not deducted any tax at source. The Assessing Officer therefore, inquired with the assessee, who responded by suggesting that all services were rendered by the non-residents outside India and therefore, no part of the income had accrued or arose in India. Such income was therefore, not taxable in India. The assessee relied on the decision of Supreme Court in case of GE India Technology Center P. Ltd vs. Commissioner of Income Tax and anr reported in 327 ITR 456 and contended that, in such a case, there was no liability to deduct tax at source. 2. The Assessing Officer did not accept suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax in India. Requirement of deducting tax at source under section 195 of the Act would not arise. This aspect was elaborated by the Supreme Court in case of GE India Technology Center P. Ltd (supra) holding that on mere remittances of an amount to non-resident, duty to deduct tax at source would not arise unless such remittances contains wholly or partly taxable income. 5. Section 9 of the Act carries the heading income deemed to accrue or arise in India. Subsection (1) of section 9 provides that in following incomes, contained in various clauses therein, shall be deemed to accrue or arise in India. Clause (I) of sub section (1) provides that all income accruing or arising, whether directly or indirectly, through or f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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