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TMI Blog2011 (12) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was sufficient cause for delay. The Ld. Counsel for the assessee fairly conceded the position and stated that he has no objection for condonation of delay as there seems to be a reasonable cause and delay is of five days only. In view of the above, we condone the delay and admit the appeal. 3. The first issue in this appeal of revenue is against the order of CIT(A) in deleting the disallowance made by Assessing Officer on account of depreciation. For this, revenue has raised following ground no.1: "1. That on the facts and circumstances of the case, Ld. CIT(A) has erred in law in deleting the disallowance of Rs.50,000/- on account of depreciation without considering the fact that the contentions of the assesee company before him differs from the A.O's statement. " 4. Brief facts leading to the above issue are that the Assessing Officer disallowed an ad hoc amount of Rs.50,000/- on account of depreciation by stating the reason that there are no bills for several items of fixed assets on which depreciation has been claimed. Hence, Assessing Officer disallowed depreciation on estimate basis amounting to Rs.50,000/ -. Aggrieved, assessee preferred appeal before CIT(A), who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Marathon Trade amounting to Rs.10,66,902/- without deducting TDS. According to Assessing Officer, in view of provisions of section 195(1) and 195(2) of the Act, the assessee is obliged to deduct tax and failure to do so attracts provisions of section 40A(ia) of the Act and disallowance was made on entire commission paid to Marathon Trade for an amount of Rs.10,66,902/ -. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee by considering the decision of Hon'ble Apex Court in the case of GE India Technology Centre (P) Ltd. Vs. CIT (2010) 327 ITR 456 (SC), wherein it is held that payment to non- resident is liable to deducted tax in India only when income is taxable in India and Assessing Officer when is not sure about the taxability, TDS is not liable to be deducted. The CIT(A) relying on the CBDT Circular No.23 dated 23.07.1969 and above decision of Hon'ble Apex Court allowed commission payment as expense. Aggrieved, revenue is in appeal before us. 8. We have heard rival submissions and gone through facts and circumstances of the case. We find that the Assessing Officer disallowed this commission payment to non-resident for the simple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 40(a)(ia) of the Income-tax Act, 1961. It has come to the notice of the Board that a similar view, on the same set of facts has been taken by some Assessing Officer in other charges. 2. The deduction of tax at source under section 195 would arise if the payment of commission to the non-resident agent is chargeable to tax in India. In this regard attention to C.B.D.T Circular No.23, dated 23rd July,1969, is drawn, where the taxability of 'Foreign Agents of Indian Exporters" was considered along with certain other specific situations. It had been clarified then that where the non-resident agent operates outside the country, no part of his income arises in India. Further, since the payment is usually remitted directly abroad it cannot be held to have been received by or on behalf of the agent in India. Such payments were therefore held to be not taxable in India. The relevant sections, namely, section 5(2) and section 9 of the Income-tax Act, 1961, not having undergone any change in this regard, the clarification in Circular No.23 still prevails. No tax is therefore deductible under section 195 and consequently, the expenditure on export commission and other re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of contingent liability referring tax audit report. For this, revenue has raised following ground no. 3: "3. That on the facts and circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of Rs.1,04,80,652/- on account of contingent liability without considering the reference made in the tax audit report by the Auditor on the basis of which the A.O. added the same." 10. The Assessing Officer during the course of assessment proceedings going through the tax audit report column 17K observed that the assessee has debited a sum of Rs.1,04,80,652/- and as per auditors this was a contingent liability. According to Assessing Officer, this amount belongs to bills discounting and even though the amount is debited to the P&L Account being contingent liability. The Assessing Officer disallowed this as not allowable as business expenditure. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee by stating that this contingent liability has not been provided in the books of account nor claimed in the P&L Account. Hence, he deleted the disallowance. Aggrieved, revenue came in appeal before us. 11. We have heard rival submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, Bentinck Street, Kolkata - 700 001, PAN : AABCK I884 A for the year ended 31st March, 2008 and as per guidelines we have reported the particulars of liabilities of a contingent nature amounting to Rs.1048652/- in clause 17(K) of Form No. 3CD of Tax Audit Report. As per the audit guidelines we have to scrutinize the provisions and outstanding liabilities to ensure that these are not in respect of any contingent liability and if any provision is made in respect of contingent liability report has to be given under clause 17(K) of the Tax Audit Report. We have report the contingent liability under clause 17(K) of Form No. 3CD but due to typing error the word 'not provided for' were not typed. In this respect Note No. 7 under the Notes on account under the Companies Audit Report may be referred in which we have clearly mentioned the contingent liabilities not provided for in respect of Bill discounted of Rs.10430652/- and call due on shares Rs. 50000/-' According to AS-29, no provision should be made for contingent liabilities, if any provision is made, the amount should be reported under clause 17(K). However the assessee has not made any provisions for the contingen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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