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Issues involved: Appeal against order of CIT(A)-IV, Chennai dated 28-09-2012 regarding additions made by Assessing Officer u/s. 40(a)(ia) and u/s. 40(a)(i) in the income tax assessment for AY 2008-09.
Addition u/s. 40(a)(ia) - Short deduction of TDS on Freight Charges: The Revenue challenged CIT(A)'s deletion of disallowance made by Assessing Officer u/s. 40(a)(ia) on account of short deduction of TDS on Freight Charges. The Revenue argued that Lower Deduction Certificate u/r 28AA(4) should mention the name of the assessee for valid deduction. However, the AR contended that tax was deducted as per certificates u/s. 197 and relied on judgments to support the contention. The Tribunal found that the assessee acted based on certificates produced by parties, and even if there was short deduction, as per case laws, provisions of Section 40(a)(ia) were not attracted. The Ground of Appeal of the Revenue was dismissed. Addition u/s. 40(a)(i) - Non-deduction of TDS on Foreign Agency Commission: The second ground of appeal was related to disallowance made u/s. 40(a)(i) by the Assessing Officer on commission paid to Foreign Agents without deducting TDS. The Revenue argued that Foreign Agents' income accrued in India, hence TDS should have been deducted. The AR contended that TDS was not required as income did not accrue or arise in India, citing relevant judgments. The Tribunal held that no income accrued in India for payments to Foreign Agents, following the Supreme Court's decision, and dismissed this ground of appeal of the Revenue. The impugned order of the CIT(A) was upheld, and the appeal of the Revenue was dismissed.
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