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TMI Blog2016 (8) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... n 195 also do not apply on the facts of the case. Considering the aforementioned facts in totality, we do not find any error or infirmity in the findings of the ld. CIT(A). Both these appeals by the Revenue are accordingly dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... xplaining the genuineness of the transaction and further pointed out why the payments were not subjected to withholding tax. 6. After considering the details filed by the assessee, the A.O. was of the opinion that the assessee company failed to bring necessary material on record as to how the foreign agents corresponded with the assessee company regarding the requirement of material and other things for foreign buyer and accordingly placed procurement order on Assessee Company on behalf of foreign company. 7. On the basis of the above observations, the A.O. was of the opinion that the export commission was for non-business purposes and accordingly disallowed the same. 8. The A.O. further strengthened his view by invoking the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to accrue or arise in India only if any part of income is reasonably attributable to operation carried out by the non-resident in India and if no operation is carried out in India by the non-resident, there would be no income deemed to accrue or arise in India. Under this factual and legal position, no tax is deductible from the payment made and hence, the provisions of Section 40(a)(ia) are not applicable with regard to the captioned payments to non-resident. Since the appellant has filed sufficient material including confirmation that the seven foreign agents are non-residents in India and they have neither carried out any operation in India nor they have rendered any services in India, no tax is deductible from the payment made to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission has been paid to these foreign agents through banking channel, their identity are proved and confirmations have been obtained from them, I am inclined to accept the said expense as a genuine business expenditure. Secondly I find that nothing has been brought on record by the revenue to show that those seven foreign agents to whom commission aggregating to ₹ 12,79,366/- was paid, had any operation carried out in India{ as per the provision of Section 9(l)(i) of Income Tax Act, 1961. The jurisdictional ITAT Ahmedabad, in case of AIA Engineering Ltd V/s Addl.CIT(ITA No. 580/Ahd/2011) has held that income of a non-resident is deemed to accrue in India only if any part of income is reasonably attributable to operation carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been accepted as genuine by the A.O. by order made u/s. 143(3) of the Act. 14. We have carefully perused the orders of the authorities below and have also gone through the assessment orders brought to our notice, the payment of commission to the foreign agents in various years can be understood by the following chart:- 15. As mentioned elsewhere, the payment of commission to the same parties have been accepted in A.Y. 2006-07 & 2008-09 vide order dated 27.11.2008 & 02.12.2010 respectively made u/s. 143(3) of the Act. 16. Once, the genuineness of the expenditure has been accepted in earlier years, the payment of commission to the same parities cannot be considered as incurred for non-business purposes. Further, the commission have b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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