TMI Blog2022 (4) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... 014-15. The facts and circumstances remain the same as in the preceding years. Accordingly, there is no justification to interfere with the order of the Ld. CIT(A). We note that the Revenue is not in appeal against the orders of the coordinate bench in earlier years. Decided cases must be put to rest. In the absence of any change in the factual matrix and the legal position in the assessment year 2014-15, respectfully following the decisions of the coordinate bench in assessee s own case in earlier years [ 2019 (3) TMI 1969 - ITAT DELHI] and [ 2019 (1) TMI 537 - ITAT DELHI] , we reject the appeal of the Revenue. - ITA No. 397/Del/2019 - - - Dated:- 11-4-2022 - Dr. B.R.R. Kumar, Accountant Member And Ms. Astha Chandra, Judicial Member For the Department : Shri Mrinal Kumar Das, Sr. DR For the Assessee : Shri Rishabh Malhotra, AR ORDER PER ASTHA CHANDRA, JM This appeal is filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-4, New Delhi ( CIT(A) ) dated 10.10.2018 pertaining to the assessment year 2014-15. 2. The solitary ground raised by the Revenue is as under:- 1. Whether on the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes including the warranty period. In consideration, the assessee was under the obligation to pay commission to SPA @ 2% of the gross sales made to its customers which amounted to ₹ 3,07,65,783/- for the assessment year 2014-15. 4. During the assessment proceedings, the assessee was asked to furnish details of the expenses incurred in foreign currency on payments made to parties outside India and TDS, if any deducted thereon. From the reply filed by the assessee, the Ld. AO observed that the assessee has made payments to SPA without any TDS. The Ld. AO also mentioned that the payments made to SPA was treated as royalty/FTS by his predecessor and since the assessee has not deducted TDS on such payments, the assessee was asked to explain as to why the disallowance under section 40(a)(i) be not made for the reasons given in detail in the assessment order of the preceding year. In response, the assessee filed detailed submissions before the Ld. AO explaining that the assessee has made payment merely towards marketing and sales support provided by SPA to the assessee. However, the explanation of the assessee was not acceptable to the Ld. AO. The Ld. AO after analysing the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services may overlap and in would not be proper to view them in watertight compartments, but in the present case this issue or differentiation is again not relevant. 6.2.2 In my opinion similar to the above case, the role of the commission agent is limited. The aforesaid is substantiated by the fact that commission is payable by the Appellant only upon realisation of the invoice by the appellant and hence, the nature of activities by no stretch of imagination can be construed to be technical in nature nor the payment made by the appellant can be described as dividend, interest, royalty or salary. Accordingly, commission paid to non-resident agent cannot be deemed to accrue or arise in India u/s 9(1)(vii) of the Act, as sales support services being provided are not in nature of managerial, technical or consultancy services as it is also evident from agreement between the appellant and agent. 6.2.3 Furthermore, AO has not brought out any facts on record to show that the commission agents had any business connection in India or any operations were carried out by them in India. In the absence of any such finding given by the AO, it cannot be held in respect of foreign commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AO on the issue under challenge by the Department. 6.2 The Ld. DR, however, controverted the submission of the Ld. AR. The Ld. DR strongly relied on the order of the Ld. AO and agrued that the principal of res-judicata does not apply to tax proceedings. The Ld. DR submitted that in the assessment year 2014-15 the facts are different than the earlier assessment years which have already been decided by the coordinate bench of the ITAT (supra). He submitted that SPA s profile shows that it is engaged in a highly technical business. SPA is conducting two fold activities for the assessee i.e. acting as sales commission agent for its products and also rendering technical services to the assessee. This is evident from the findings of the Ld. AO in para 6.11 of his order and submitted that the Ld. CIT(A) erred in not considering the same. The said para 6.11 is reproduced below:- 6.11 In respect of the contention of the assesee that the CIT(A)-16, New Delhi has in his order for A.Y. 2010-11 deleted the disallowance it is stated that the department has not accepted the order of Ld. CIT(A). Further while deleting the disallowance Ld. CIT(A) stated in his order that From the perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een decided by the coordinate bench of the ITAT (supra). There is no change in the Agreement, the parties involved, the terms of payment etc. in the relevant assessment year. He submitted that the Hon ble coordinate bench has decided the same issue in the earlier years (i.e. assessment year 2010-11, 2012-13 and 2013-14) in favour of the assessee considering all the relevant facts and legal propositions. The Ld. AR submitted that the SPA is not rendering any technical services to the assessee as alleged by the Ld. DR. SPA is only procuring orders for the assessee outside India. He further submitted that SPA by performing the activities for the assessee as stipulated under the Agreement, is not trading in India but is only trading with India and hence there is no business connection of SPA in India. By placing reliance on the judgment of the Hon ble Supreme Court in the case of GE Technology CE (P) Ltd. vs. CIT 327 ITR 456, the Ld. AR submitted that there is no obligation on the assessee to withhold tax under section 195 as payment to SPA which is in the nature of export commission, is not chargeable to tax in India. 7. We have considered the submissions of the Ld. representatives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2012-13 and 2013-14 3. During the course of hearing, the Id. DR, though relied on the orders of the Assessing Officer, but did not object to the contention of the learned AR that the issue involved in both these appeals are squarely covered by the decision of Co-ordinate Bench in assessee's own case for A.Y. 2010-11 [ITA No. 2575/Del/2016), whereby in the identical facts of the case, the payments made to the same agents have been treated as commission and not as fee for technical services. Relevant facts and findings of the ITAT, Delhi Bench in the aforesaid case read as under: Facts: Further, AO observed that the assessee company had paid an amount of ₹ 88,91,816/- to M/s Graziano Transmission North America USA and the assessee was asked to explain as to why the payment made to M/s Graziano Transmission North America USA be not treated as royalty /fees for technical services in light of the services offered by the said company. The assessee company was further asked to explain as to why no TDS was deducted on the payment made to the said company. In compliance thereto the assessee company did not file any reply. Therefore, as per the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinate Bench of Tribunal, we find no justification to interest with the orders of the Ld. CIT(A) on the issue under consideration. Accordingly, the grounds raised by the Revenue in both the appeals deserve to be rejected. 7.1 We have carefully considered the arguments of the Ld. DR. We notice that there is no change in the facts and legal position in the assessment year 2014-15 under consideration. Hence, we are unable to subscribe to his view. The contention of the Ld. DR that the Ld. CIT(A) has erroneously passed the orders for the earlier assessment years is not acceptable in view of the detailed findings recorded by the Ld. CIT(A) which is extracted in para 5. above. Further, we do not find any mention regarding the presence of business connection of SPA in the order of the Ld. AO as claimed by the Ld. DR. In any event, in our view, this aspect has also been considered by the coordinate bench by categorically recording that the foreign entity (SPA) does not have a permanent establishment (PE) or business connection (BC) in India. Reliance placed by the Revenue on the judgment of the Hon ble Supreme Court in R.D. Aggarwal Co. and judgment of the Hon ble Madras High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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