2012 (12) TMI 1071 - AT - Income Tax

Summary

Issues Involved: Stay petition, Disallowance of commission payments, Levy of interest u/s 234B and 234C.

Stay Petition:
The assessee filed a stay petition seeking relief from an outstanding demand of Rs. 13,52,063. The petition was dismissed as the appeal had already been heard and disposed of.

Disallowance of Commission Payments:
The appeal challenged the disallowance of commission payments made to M/s Misc. Maldives Pvt. Ltd. and Mr. Hussain Shiham, asserting they did not constitute technical services under sec. 9(1)(vii) and sec. 9(1)(viii) of the Income-tax Act. The AO disallowed the payments for failure to deduct tax at source under sec. 40a(i), adding Rs. 29,19,389 to the assessee's income. The CIT(A) upheld the disallowance, deeming the services as technical. The assessee argued that the payments were for business income, not technical services, citing relevant case law. The Tribunal allowed the appeal, finding the services did not qualify as technical under sec. 9(1)(vii).

Levy of Interest u/s 234B and 234C:
Consequential to the above issues, the levy of interest u/s 234B and 234C was addressed. The AO was directed to provide relief in this regard.