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TMI Blog2015 (12) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... tified. With reference to the Circular No:786 dt:07-02-2000 issued by the CBDT it is very clear that no tax is deductible u/s 195 of Act on export commission and related charges payable to a non-resident for services rendered outside India is an allowable expenditure. Therefore, in the light of observations of above, we deem it proper to hold that the payment of commission to a agent outside India is a business expenditure is allowable and we confirm the order passed by the Ld. CIT(A).- Decided in favour of assessee. - ITA No. 338/Kol/2013 - - - Dated:- 10-12-2015 - Shri M. Balaganesh, A.M. Shri S.S.Viswanethra Ravi, J.M. For The Appellant : Shri Uday Kr. Sardar, JCIT For The Respondent : Shri Saurav Kedia, CA ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amman. 4. During the assessment proceedings, the assessee claimed the business expenditure to an extent of ₹ 1,17,47,291/- out of the total ₹ 3,61,75,033/- being goods value exported to Ministry of Oil, Baghdad, apart from non compliance of Section 40(a)(i) Act, as discussed above, the AO also, was of the view that the name of the assessee being figured in the Volker commission report and with reference to the payment towards commission were not authorised by the UN, but, however, admitted to the fact that the assessee produced all the relevant material evidencing the agreement referring the nature and quantification of services rendered for which the commission has been paid. Despite the same the AO disallowed the expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Volker committee report constituted to examine transactions with reference to the FOOD for OIL programme with IRAQ relating to the kick backs said to have been exchanged between the parties and such transactions were not approved by the UN and relied on the AO s order and prayed to allow the appeal. In reply the AR contended that the assessee submitted all the agreements concerning the transactions in selling the flame proof Forklift trucks and its spare parts to Ministry of Oil, Baghdad. All the transactions were caused effect through valid banking channels i.e Bank of India and State Bank of Bikaner Jaipur to Standard Chartered Grindlays Bank, Jordan-Amman- Shmeissani Branch in Amman. The AR further, pointed out Circular No:786 dt:07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned CIT(A) that in the absence of deduction of tax at source from the payment it is hit by the provisions of section 40(a)(ia) of the Act , also is not tenable. There is nothing on record to show that any part of the activities of the Iraqi Agent has performed in India. The payment was also received by them in Jordan. Absence of any Permanent Establishment or Business connection of agent in India, also takes the case out of the purview of the deeming provisions regarding accrual of income in India as envisaged in section 5(2) of the ACT. Hence, by taking into consideration all the aspects of the case, it is found that in this case, neither was the commission payment received by the non-resident agent in India nor any income accrue or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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