9911796707
TMI Blog2015 (6) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... edings u/s.143(3) of the Income Tax Act, in short 'the Act'. 2. The assessee-company manufactures components and parts for process control installments and other products. It filed its return on 16.09.2008 declaring total income of Rs. 2,31,43,010/-. The same were 'summarily' processed. Thereafter, the Assessing Officer completed a regular assessment on 30.11.2010 inter alia holding assessee's claim on building repair of Rs. 17,11,804/- as capital expenses and disallowed commission paid to foreign export agents u/s.40(a)(i) amounting to Rs. 10,96,445/- for non deduction of TDS. 3. The CIT(A) has affirmed the Assessing Officer's action. This leaves the assessee aggrieved. 4. We come to assessee's first substantive ground relating to disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue between the parties is about its nature; i.e., whether capital or revenue as per the Revenue and assessee, respectively. The assessee's stand from the very beginning claims it to be not resulting any structural change in the factory building, non carrying out of any civil work, entire renovation meant to replace the old normal wear/tear of the building, non appointment of any civil engineer, no steel item being used and no new building or asset of different size and shape to have come up. The lower authorities are fair enough in not specifically rejecting these pleas. The assessee has only replastered, re-furnished and re-plumbered its factory building. This is not the Revenue's case that the same has caused any increase in capacity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on agents but also provided technical services. This resulted in the impugned section 40(a)(ia) disallowance of Rs. 10,99,445/-. The assessee has failed in lower appellate order as well. 8. Heard both sides. Records perused. The 'Board' had issued circular no.786 dated 7.2.2000 exempting similar commission payments from TDS deduction. The same was withdrawn vide circular 7/09 dated 22.10.2009. The relevant assessment year is 2008-09 having accounting period from 1.4.2008 to 31.3.2009. There is no dispute between parties about the former circular and its withdrawal by a subsequent one. It is not the Revenue's contention that this withdrawal is with retrospective effect covering the earlier span of time. The assessee also makes submissions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personnel employed with them for technical, commercial and marketing areas." We have confronted the Revenue about the aforesaid clauses in the agreement. It fails to point out involvement of any technical component therein. The assessee's overseas agents have procured export orders and provided logistic support through adequate publicity etc. There is not even an iota of evidence to prove any technical service actually rendered to the assessee. Thus, the Revenue's contention relating to Section 9(1)(vii) aplicability stands negated. We hold that the assessee has not availed any technical services from its overseas agents so as to deduct TDS on the impugned export commission payments. The Hon'ble Supreme Court in G.E. India Technology Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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