2016 (12) TMI 350 - HC - Income Tax

Genuineness of the Commission paid to the commission agent - Non deduction of TDS - Held that - It is not disputed that the commission paid to Mrs. Sita Ram Parodkar has been assessed to tax by the Revenue. Both the authorities upon appreciating the evidence on record has found that the Revenue has failed to establish that the transaction was not genuine. In fact, the amount paid by the respondent to the said commission agent has not been disputed as admittedly such amount was taxed at the hands of the said Assessee. In such circumstances, we find that the question of interference in concurrent finding of fact on this aspect would not be justified. In the present case, it is not disputed that the said company M/s. De Long Minerals and Logistics is not having any establishment in India. It is also not established that any income of the said company is assessed in India or any tax is paid on that count in India. In such circumstances, the observations of the Apex Court relied upon by this Court in the judgment of Commissioner of Income Tax V/s. Gujarat Reclaim & Rubber Products Ltd. (1980 (8) TMI 2 - SUPREME Court ) would be squarely applicable to the facts of the present case. - Decided in favour of assessee

Summary

Issues:
1. Disallowance of commission paid to commission agent by Income Tax Appellate Tribunal.
2. Non-deduction of TDS on commission paid.

Analysis:
1. The appellant challenged the order disallowing the commission paid to the agent, arguing that it was not a genuine transaction. The Counsel for the appellant contended that the transaction was not genuine based on the Assessing Officer's findings and failure of the respondent to deduct TDS. However, the respondent's Counsel cited previous judgments to support the conclusion that the commission payment was genuine and not subject to TDS deduction. The High Court found that the commission paid was assessed to tax by the Revenue, and no evidence proved it was not genuine. Referring to previous judgments, the Court upheld the concurrent findings of fact and dismissed the appellant's appeal.

2. The second issue revolved around the non-deduction of TDS on the commission paid to a non-resident company. The respondent's Counsel argued that since the company was not taxed in India, there was no requirement for TDS deduction. Citing relevant judgments, the Counsel established that the non-resident company's income not being assessed in India exempted it from TDS obligations. The Court relied on previous decisions and concluded that no substantial questions of law arose in the appeal, ultimately rejecting the appellant's contentions. The Court's decision was based on the absence of any establishment or assessed income of the non-resident company in India, aligning with the legal principles established in previous cases.

In summary, the High Court of Bombay dismissed the appellant's appeal challenging the disallowance of commission payment and non-deduction of TDS. The Court upheld the findings that the commission payment was genuine and not subject to TDS, based on previous judgments and the absence of establishment or assessed income in India for the non-resident company. The decision was grounded in the legal principles established by the Apex Court and previous High Court judgments, emphasizing the lack of substantial questions of law in the case.