TMI Blog2019 (8) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration. Disallowance u/s 40(a)(i) - TDS u/s 195 - payments of commission to foreign agents paid outside India for services rendered outside India - HELD THAT:- Respectfully following the aforesaid decision of the Co-ordinate Bench of this Tribunal in the assessee s own case [ 2017 (11) TMI 1844 - ITAT BANGALORE] , we also hold that the payment of commission to non-resident agent AV Sons in the case on hand cannot be considered as having been accrued or arisen or deemed to accrue or arise in India as the services were rendered outside India and the payment of commission was also outside India. In this view of the matter, the assessee was not obliged to effect any deduction of tax on the commission payments t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (in short the Act ) vide order dated 23.03.2015 wherein the assessee s income was determined at ₹ 26,49,55,970/-. The assessee s appeal was disposed off by the CIT(A)-1, Bangalore vide order dated 31.08.2015. 3. Aggrieved by the order of CIT(A)-1, Bangalore, dated 31.08.2017, for Assessment Year 2011-12, the assessee has preferred this appeal before the Tribunal, wherein it has raised the following grounds:- 4. Ground No.1 (supra), being general in nature, no adjudication is called for thereon. 5. (II) Ground Nos.2 to 5 Disallowance under section 14A of the Act 5.1 In these grounds (supra), the assessee, inter alia, contends that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) upheld the aforesaid disallowance u/s 14A r.w.r. 8D. Before us, the assessee / learned AR were unable to controvert the orders of the authorities below to support its claim that no disallowance was called for u/R 8D(2)(iii) and therefore the following alternate argument was put forth by the learned AR. According to the learned AR, the alternate argument of the assessee is that disallowance under section 14A of the Act cannot exceed the exempt income earned by the assessee. In this regard, the Hon ble Delhi High Court in the case of Joint Investments (P) Ltd., Vs. CIT (372 ITR 694) has taken the view that the disallowance u/s 14A of the Act cannot exceed the exempt income. Similar view has been expressed by the Hon ble Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x under charging sections 4, 5 and 9 of the Act since no part of the income arises in India or is received by it / on its behalf in India or is deemed to accrue or arise in India. According to the learned AR, since the agency activity of A V Sons was rendered outside India and payments were made outside India, therefore the said commission payments to A V Sons cannot be said to be taxable in India. It is contended that since no income accrues or arises in India or is deemed to accrue or arise in terms of section 5 r.w.s. 9(1)(i) of the Act, the aforesaid commission payments to AV Sons is not subject to the provisions for withholding tax thereon. In support of the assessee s contentions, the learned AR placed reliance on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide India and the payment of commission was also outside India. In this view of the matter, the assessee was not obliged to effect any deduction of tax on the commission payments to the foreign agent AV Sons who is stationed outside India. Consequently grounds 6 to 11 raised by the assessee are allowed. 7. IV Ground No.12 Short grant of credit in respect of TDS by ₹ 2,68,927/- 7.1 In this ground (supra), the assessee contends that the AO has not granted it TDS credit to the extent of ₹ 2,68,927/- as reflected in the 26AS of the assessee. In the circumstances, as contended above, we direct the AO to examine / verify the assessee s claim that of short grant of credit for T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
