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TMI Blog2015 (1) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... of amendment in the statute as laid down by the Hon'ble Supreme Court in the case of CIT Vs Gold Coin Health Food Pvt. Ltd. (2008)304 ITR 308 (SC) and CIT Vs Moser Baer India Ltd. [2009] 315 ITR 460 (SC). 4. That the Ld. Commissioner of Income Tax (Appeals)-II Kanpur, has erred in law and on facts in not appreciating the fact that the services rendered by the non -resident agent to procure orders from foreign buyers are purely technical or managerial in nature. Therefore, the provision of section 9(1)(vii) is clearly applicable on the assessee. 5. That the Ld. Commissioner of Income Tax(Appeals)-II, Kanpur has erred in law and on facts in deleting the addition of Rs. 1,48,489/- towards valuation of export debtors ignoring the fact that the assessee had not valued the debtors at the exchange rate prevailing on the closing date i.e. 31.03.2009 as it should have done under the prescribed accounting standards. 6. That the Ld. Commissioner of Income Tax(Appeals)-II, Kanpur has erred in law and on facts in deleting the additions out of following expenses inspite of the fact that these expenses were made in cash and were not supported by proper bills and vouchers. a. Rs. 2,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his reply on 20.12.2010 that the assessee is engaged in business of manufacture and export of finished leather, shoe upper and leather products. The assessee's main business being export business it has to take the service of foreign agents, who secure export orders and help in execution of such business. For the services rendered by the foreign agents, they are paid commission in foreign exchange by remitting the amount through bank. We find that the CIT (A) has considered the alleged admission in the reply of the assessee and has also perused the agreement from which he found that there was nothing, which could demonstrate that these agents were appointed as selling agents, designers or technical advisers for invoking the provisions of Section 9 (1) (vii) of the Act. The findings recorded by the CIT (A), which have been confirmed by the ITAT is quoted as below:- "5.3.2 The A. O. has also invoked the provisions of Section 9 (1) (vii) on the premise that such payments also full under FTS. In this regard she has observed that normally the exporter appoints the agents as his selling agent, designer & technical adviser for his products. He has further observed that being commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)] and shall be included in total income of non-resident whether or not, non-resident has residence or place of business or business commission in India; or non-resident has rendered services in India. We do not find that the fact situation contemplated or clarified in the explanation added by Finance Act, 2010 is applicable to the present case as in the present case the agents appointed by the assessee had their offices situate in a foreign country and that they did not provide any managerial services to the assessee. Section 9 (1) (vii) deals with technical services and has to be read in mat context. The agreement of procuring orders would not involve any managerial services. The agreement did not show the applicability or requirement of any technical expertise as functioning as selling agent, designer or any other technical services. There are no distinguishing feature in this case, nor do we find that the ratio of the Constitution Bench decision in Commissioner of C. Ex., Bolpur v. Ratan Melting & Wire Industries, (2008) (231) E.L.T. 22 (SC) (para 6) is applicable in as much as in the present case there was no decision of the Supreme Court or High Court or any statutory prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me are vital principles in the Tax Law, which cannot be ignored. Had this addition been sustained, it will disturb the returned income of the appellant for subsequent Assessment Years also i.e. for A.Y. 2010-11, 2011-12 and so on." 7. Now the Revenue is in appeal before the Tribunal and has simply placed reliance upon the order of the Assessing Officer; whereas the ld. counsel for the assessee has contended that the assessee has been following this method of accounting for the last 20 years and the same was accepted by the Revenue in the past. Therefore, it cannot be disturbed in the impugned assessment year. 8. We have carefully examined the orders of the lower authorities and we find that undisputedly assessee has been following this method of accounting in the past also and the same was accepted by the Revenue. Therefore, we find no justification to disturb the method of accounting consistently being followed by the assessee. We accordingly confirm the order of the ld. CIT(A), who has rightly adjudicated the issue. 9. Apropos ground No.6, it is noticed that the Assessing Officer has made ad hoc addition in respect of the following expenses:- a. Rs. 2,00,000/- out of Job Work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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