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TMI Blog2012 (2) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rice Par Boiling and Dryer Plants as per the requirements of the customers. It had received an order from White Pearl Rice Mills Ltd., Punjab, Pakistan. The order was received through two agents: Mr. Ghulam Mustafa of Lahore and Mr. Syed Khursheed Anwar of Karachi. The plant was shipped on 23.8.2009. On completion of the export order, commission became payable to the agents as per the agreed ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Whether tax deduction would be mandatory under section 195 under export commission paid to non-resident agent, if so, at what rate? 3. The Revenue submits that the applicant has not contended that it is availing benefits under the provision of DTAA with Pakistan nor has it a claim of tax exemption under any provision of the Act. The provision of section 195 would apply. It is stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deemed to accrue or arise in India during such previous year. Under section 9(1)(i), income accruing or arising directly or indirectly, through or from any business connection in India or source of income in India shall be deemed to accrue or arise in India. We are concerned with the source of income of the two non-resident agents who had earned commission from the business activity of the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Malhotra AAR 671 of 2005, 284 ITR 564]. We therefore hold that the income arising on account of commission payable to the two agents is deemed to accrue and arise in India, and is taxable under the Act in view of the specific provision of Section 5(2)(b) read with section 9(1)(i) of the Act. The provision of section 195 would apply, and the rate of tax will be as provided under the Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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