TMI Blog2018 (10) TMI 1955X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough or from any asset or source of Income in India or through the transfer of a capital asset situate in India shall be deemed to accrue or arise in India. In the present case, as noted, admitted facts are that the non-resident 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.This question is therefore not entertained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s business against competence, that too from a person who had closely worked with the assessee in the same business. The expression or any other business or commercial rights of similar nature used in Explanation 3 to sub-section 32(1)(ii) is wide enough to include the present situation. - R/TAX APPEAL NO. 1233 of 2018 - - - Dated:- 9-10-2018 - HONOURABLE MR. JUSTICE AKIL KURESHI AND HONOURABLE MR. JUSTICE B.N. KARIA Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 19.04.2018 raising following questions for our consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, 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 such explanation and made the addition of entire amount in terms of section 40(a)(ia) of the Act. The assessee carried the matter in appeal. CIT(A) gave substantial relief to the assessee. All additions, barring commission payment of Rs. 18.80 lacs (rounded off) were deleted. With respect to the said sum of Rs. 18.80 lacs, Commissioner was of the opinion that this related to the machines which were sold in India. He did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise in India. Sub-section (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 from any business connection in India or through or from any property in India or through or from any asset or source of Income in India or through the transfer of a capital asset situate in India shall be deemed to accrue or arise in India. 6. In the present case, as noted, admitted facts are that the non-resident agents appointed by the assessee for procuring export orders do not have permanent establishment in India. Their agents are situated outside Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied with. Under such provision, an assessee could claim depreciation in respect of intangible asset such as know-how, patents, copy rights, trade marks, licenses, franchises or any other business or commercial rights of similar nature. In his opinion, the non-compete fee does not fall in any of these categories. 6. The assessee carried the matter in appeal. CIT(A) allowed the appeal relying on the judgements of Karnataka High Court in case of CIT vs. Ingersoll Rand International Ind. Ltd. reported in 227 taxmann.com 176 and Delhi High Court in case of Areva T D India Ltd vs. Dy. CIT reported in 345 ITR 421. Reference is also made to the decision of Supreme Court in case of Techno Shares and stocks Ltd vs. Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g membership card of Bombay Stock Exchange was intangible asset on which the depreciation can be claimed. It was observed that the right of such membership included right of nomination as a license which was one of the items which would fall under section 32(1)(ii). The right to participate in the market had an economic and money value. The expenses incurred by the assessee which satisfied the test of being a license or any other business or commercial right of similar nature. 9. In case of Areva T D India Ltd (supra) Division Bench of Delhi High Court had an occasion to interpret the meaning of intangible assets in context of section 32(1)(ii) of the Act. It was observed that on perusal of the meaning of the categories of specific int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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