TMI Blog2021 (1) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. It is the case of the assessee that the commission agents have rendered the services abroad and the situs of accrual or receipt of their commission income is outside India. It is further claimed that services rendered by agents have been utilized by the assessee outside India in procuring the export orders. The issue is squarely covered in favour of the assessee by the decision of co-ordinate bench for AY 2010-11 as rightly acknowledged by the CIT(A). The commission payments are seen to be made to the similar set of parties as in AY 2010-11. The allegation on behalf of the Revenue that expenses incurred are covered in the wider definition of fees for technical services as defined in Explanation (2) to Section 9(1)(vii) of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ATT, PRESIDENT SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER Appellant by : Shri S. S. Shukla, Sr.D.R. Respondent by : Shri Bhavin Marfatia Shri Nirmit Mehta, A.Rs. ORDER PER PRADIP KUMAR KEDIA - AM: The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals)-1, Vadodara ( CIT(A) in short), dated 11.02.2019 arising in the assessment order dated 22.12.2017 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2015-16. 2. The grounds of appeal raised by Revenue read hereunder: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in law and fact in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record, observations of the AO and the written submission of the appellant. 5.1 Ground No. 1 and 2 relate to disallowance u/s 40(a)(i) of the Act amounting to Rs. 78,90,570/- on the ground of non-deduction of tax u/s 195 against commission payment made to Non-Resident outside India. At the outset, the Ld. AR informed that the same issue arose in AY 2010-11 wherein an order u/s 263 was passed by the Hon'ble Pr. CIT disallowing entire foreign commission payment made without complying the provisions of Section 40(a)(ia). The Tribunal in ITA No. 1391/AHD/2015 did not concur the view of the ld. CIT and quashed the order passed u/s 263 of the Act. Key findings are as under: i) Commission payments made to Non-Resident agents did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce based taxation under s.9 of the Act regardless of residential status of the non-resident. The learned DR accordingly submitted that the CIT(A) has misconstrued and misapplied the decision rendered by the Tribunal in past. 8. The learned counsel for the assessee, on the other hand, defended the order of the CIT(A) and submitted that these agents are responsible for liaison between company and its customers in specific regions and services rendered are in the nature of pure agency services only. Hence, the payments made to non-resident agents are in the nature of commission payment only and therefore provisions of Section 9(1)(vii) of the Act will not come into play at all. It was submitted that the majority of non-resident agents are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the Tribunal on facts. It is the case of the assessee that the commission agents have rendered the services abroad and the situs of accrual or receipt of their commission income is outside India. It is further claimed that services rendered by agents have been utilized by the assessee outside India in procuring the export orders. 10. We straightway find that the issue is squarely covered in favour of the assessee by the decision of co-ordinate bench for AY 2010-11 as rightly acknowledged by the CIT(A). The commission payments are seen to be made to the similar set of parties as in AY 2010-11. The allegation on behalf of the Revenue that expenses incurred are covered in the wider definition of fees for technical services as de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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