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TMI Blog2019 (4) TMI 2138X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The order passed by the learned CIT(A) to the extent prejudicial to the appellant is bad in law and liable to be quashed. Ground relating to provision for non-moving/obsolescence stock 2. The learned CIT(A) has erred in confirming the disallowance of provision for non moving obsolete stock amounting to Rs. 19,11,000. 3. The learned CIT(A), Bengaluru to the extent prejudicial to the appellant has erred in not appreciating that: a. the provision for non-moving / obsolescence in stock was made as per the mandatory requirement under Accounting standard 2 (i.e. Valuation of inventories) prescribed by ICAI and Accountant Standard 1 prescribed by the Central Govt. under section 145 of the Income-tax Act; b. provision for non-moving 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which cannot be regarded as managerial, technical or consultancy services. e. Even otherwise, without prejudice, commission paid to non-residents were for the purpose of carrying business outside India or for earning income from sources outside India and consequently the impugned payments were outside the scope of section 9( 1)(vii) of the Act. 7. On facts and circumstances of the case and law applicable, no disallowance of commission of Rs. 6,42,000/- is to be made and deduction is to be fully allowed as claimed by the appellant. Prayer 8. In view of the above and other grounds to be adduced at the time of hearing, the appellant prays that the order passed by the learned CIT(A) to the extent prejudicial to the appellant be quash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f export commission of Rs. 6,42,000/- and also no TDS was made. The Assessing Officer found that the assessee has entered into agreement with Pan Services Sas and Live Advanced Technologies Ltd. and after verifying the agreement and clauses the Assessing Officer is of the opinion that they are not at all agent or broker, as per the services being provided by them as Consultant and have agreed to place orders on behalf of the various customers, coordinate and check the quality of the goods ordered from the assessee. Therefore the Assessing Officer is of the opinion that the commission paid is in nature of Fee for technical services and the persons engaged are not agents but brokers who are consultants. The ld. Assessing Officer found that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-moving / obsolescence goods in the books of accounts. Similarly in respect of disallowance of commission for non-deduction of TDS on the payments made to non-residents, the ld. AR referred to the CIT(A) order and agreements at page no. 24 and the assessee has referred to the written submissions made before the CIT(A) at page no. 139 of the paper book where the payments made by the assessee are in the nature of commission and not for fee for technical services and relied on the judicial decisions and prayed for allowing the appeal. Contra, the ld. DR supported the orders of CIT(A) and passed the submissions. 7. We heard the Rival submissions and perused the record. Prima facie on the first disputed issue, the ld. AR submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of TDS on payments made to non-residents. The ld. AR submitted that the commission is paid outside the country and Agents only procure orders. But on the perusal of the CIT(A) order and also the submissions of the assessee in the course of hearing on 09.01.2017 we find the CIT(A) has considered the agreements of the non-residents and found that the commission is paid to the non-residents for procuring orders for the assessee to promote the products manufactured by the assessee, placing orders with the assessee on behalf of various customers, to coordinate and check the quality of goods ordered by the customers and to render prompt and complete sales and servicing to the customers at its sole cost and expense. When we read the clauses and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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