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TMI Blog2013 (7) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances, which would negate such assertion. In any case, there is no dispute that the agents were canvassing sales for the assessee for customers abroad. Assessee had every reason to hold a bona fide belief that the payments made to the non-resident were not chargeable to tax under the provisions of the Act. It could not be fastened with consequences arising out of a non-deduction of any such tax. - Decided in favour of assessee - ITA No.909/Mds./2013 - - - Dated:- 31-7-2013 - SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER For the Appellant : Shri T.N.Betgeri JCIT D.R. For the Respondent : Shri M.Balaganesh C.A. O R D E R PER ABRAHAM P GEORGE, ACCOUNTANT MEMBER: In this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. In this view of the matter, he applied Sec.40(a)(i) of the Act and disallowed the claim of commission `60,79,855. 3. Assessee moved in appeal before the CIT(A) wherein it argued that certification/declaration from the two overseas agents were duly produced by it. As per the assessee, both these persons had declared that they were not having any establishment in India. As per the assessee, these overseas agents were operating in their own countries and were canvassing sales for the assessee abroad. Contentions of the assessee were that no services were rendered by the overseas agents in India and therefore, Sec.195 was not attracted. Reliance was placed on Hon ble Apex court decision in the case of GE India Technology Central Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Tribunal in the cases of ACIT Vs. M/s.Farida Shoes Pvt. Ltd. ACIT Vs. M/s.Farida Prime Tannery Pvt. Ltd. (ITA Nos.359 360/Mds./2013 dated.11.04.2013). Further, according to him, there were no technical services rendered by such foreign agents. 7. We have perused the orders of the lower authorities and heard the rival contentions. Grievance of the Revenue, it seems, is that assessee could not establish absence of an establishment of its overseas agents in India. It is not disputed that assessee had produced declarations from the concerned agents stating that they were not having any establishment in India. It seems Assessing Officer disbelieved such declaration for a reason that it did not have a government authentication. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is under obligation to deduct the TDS under section 195 or not. The CIT(Appeals), by considering the entire facts and circumstances of the case passed a detailed order by observing that section 195 have no application to assessee s case. In the case of M/s. Prakash Impex v. ACIT (supra), the Coordinate Bench of ITAT Chennai has considered the very same issue and observed that the commission paid to non-resident agent for the services rendered outside India and such payments are not chargeable to tax in India and therefore, the provisions of section 195 are not applicable in view of the decision of the Hon ble Supreme Court in the case of G.E. India Technology Centre P. Ltd. v. CIT (supra). 11. In the case of CIT v. EON Technolo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found by Assessing Officer did not make out a case of business connection as stipulated in section 9(1)(i), commission income could not be said to have accrued to ETUK in India and, therefore, assessee was not liable to deduct tax at source from payment of commission to ETUK - Held, yes [In favour of assessee]. 12. The Hon ble Delhi High Court has considered the decision of the Hon ble Supreme Court in the case of M/s. Transmission Corporation of Andhra Pradesh reported in 239 ITR 587 and decided the issue in favour of the assessee. 13. In the case of Armayesh Global v. ACIT (supra), the Mumbai Bench of ITAT has observed that the commission payment was made to the overseas agent for procuring export orders. The agents have not been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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