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TMI Blog2013 (12) TMI 1573X X X X Extracts X X X X X X X X Extracts X X X X ..... t that cess on green leaf is a normal business expenditure TDS liability - disallowance u/s 40(a)(ia) - Held that:- The commission paid to foreign agents, who are not having permanent establishment business place in India and they are providing services outside India and even the payment is directly made outside India in foreign exchange. Assessee's income does not accrue or arise in India and once income does not accrue or arise in India, the assessee is not liable to deduct TDS on foreign payments - ITA No.589/Kol /2012 - - - Dated:- 19-12-2013 - Shri Mahavir Singh, Judicial Member and Shri Abraham.P.George, Accountant Member By Appellant Shri R.P.Nag, SR-DR By Respondent Shri S.M. Surana, AR ORDER PER Mahav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.1 The facts narrated by AO and submission of appellant is considered. As per assessment order, puja expense is not a legitimate requirement of the business and therefore, the expenditure is not allowed considering expenditure not for the purpose of business. Appellant has on the other hand submitted that expenses under this head were incurred for celebration and incurred on the occasion Diwali and Mahurt. And as per the letter of the CBDT file No.13A206D-IT(A-II) dated 3.10.1968 no monitory limit, for disallowance of such expenses is prescribed. I think there is nothing unusual about spending for puja by a company for the welfare and entertainment of staff and sentiment attached with such puja that would fetch better profit for a company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Hon ble jurisdictional High Court that cess on green leaf is a normal business expenditure and once the Hon ble jurisdictional High Court decides the issue in favour of assessee, same is covered. Hence, the order of CIT(A) is confirmed on this issue. This issue of Revenue s appeal is dismissed. 6. Next issue in this appeal of Revenue is against the disallowance in view of non-deduction of TDS u/s 40(a)(ia) of the Act. For this, Revenue has raised following ground No.3:- That on the facts and circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of ₹ 11,35,554/- on account of non deduction of TDS u/s.40(a)(ia) in view of judgment given by the Supreme Court in the case of Ms. Transmission Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-resident agents operate outside the country and no part of his income arises in India. In view of the circular No. 23 and 786, the company was under no obligation to deduct tax and as provision u/s. 40(a)(ia) does not apply, the disallowance made by AO is directed to be deleted. We find that assessee's claim was that the commission paid to foreign agents, who are not having permanent establishment business place in India and they are providing services outside India and even the payment is directly made outside India in foreign exchange. According to assessee, assessee's income does not accrue or arise in India and once income does not accrue or arise in India, the assessee is not liable to deduct TDS on foreign payments. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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