9911796707
TMI Blog2017 (5) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made by the Assessing Officer made on account of disallowance of the claim of the respondent - assessee with respect to the commission paid to the foreign agents, revenue has preferred the present Tax Appeals with the following proposed questions of law TAX APPEAL No.252/2017 (A) "Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in deleting the addition of Rs. 1,46,62,048/- made on the account of disallowance of commission payment to foreign agents, by relying upon its own decision in the case of Shri Kersi Homi Tangri for A.Y. 2009-10 & 2012- 13 wherein it was held that the Department had accepted the said claim of the assessee in earlier years, ignoring the fact that the principle of res judicata does not apply in the income tax proceedings as held by the Hon'ble Supreme Court in various cases and as also mentioned by the AO in his assessment order?" (B) "Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT is justified in deleting the addition by ignoring that at no point of time assessee could produce evidences of services rendered by the alleged commission agent and thus not fulfille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that with respect to the very commission paid to the foreign agents, in the earlier orders the Assessing Officer accepted the claim of the respondent - assessee under Section 40(a)(ia) of the Income Tax Act. However, the Assessing Officer was not satisfied and disallowed the claim of the respondent - assessee under Section 40(a)(ia) of the Income Tax Act mainly on the ground that the respondent - assessee had not produced any evidence with respect to the services rendered by the foreign agents to whom the respondent - assessee claimed to have engaged to procure the business for the respondent - assessee by booking orders in the respondent - assessee Company and also on the ground that no registered written agreement between the respondent - assessee Company and the foreign agents were produced on record, and therefore, the Assessing Officer was of the opinion that the respondent - assessee has failed to justify the claim with respect to the commission paid to the foreign agents. Similar, disallowance came to be made by the Assessing Officer for the Assessment Year 2012-13 also. However, on Appeals by the respondent - assessee, the learned CIT(A) deleted the disallowance made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations by the learned CIT(A) in CIT(A)/VLS/278/13-14 in paragraph 6 reads as under; "I have carefully considered the assessment order as well as the written submissions filed by the AR of the appellant during the appellate proceedings. The issue regarding the disallowance of commission u/s 40(a)(ia) r.w.s. 195 of the Act also arose in the case of the appellant in earlier year. The AR of the appellant made elaborate submissions on this point as were made in the earlier year also. In the assessment year 2009-10 there was payment of commission of Rs. 2167383/- to Dr. Paul Le Provost which was found genuine by my predecessor and disallowance made by the Assessing Officer was not upheld. But during this year commission has been made to 4 persons as per details submitted by the appellant during the appellate proceedings; I. Dr. Paul Le Provost Rs.4776385/- II.Filteration Products LLC Rs. 941085/- III. Filtex Marketing INC Rs. 394470/- IV.Ulhas Niloba Naik Rs. 25500/- Rs. 6137440/- During the appellate proceedings the appellant submitted that he has submitted a detailed reply in regard to commission paid and services rendered vide letter dated 25/01/2014 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endered any services in India, no tax is deductible from the payment made to him and hence, the provisions of Section 195 r.w.s. 40(a)(ia) are not applicable. I, therefore, delete this addition of Rs. 2167383/- made by the AO." It is pertinent to mention here that Ulhas Niloba Naik was also paid commission in the A.Y. 2008-09 also. Keeping in view the decision of my predecessor on the issue of payment of commission without deduction of tax which related to payment to one Dr. Paul Le Provost who has received during this year about Rs. 47.76 lakhs out of total 61.37 lakhs, I hereby agree with the decision taken by him on this issue. As the commission paid to the other agents is on the same line as paid to Dr. Paul Le Provost and all the details regarding services rendered and also the business of the assessee being the same so the payment of commission cannot be held as in genuine as well as provisions of Section 40(a)(ia) are not attracted so the whole amount of commission of Rs. 6137440/- does not attract provisions of Section 40(a)(ia) r.w.s. 195 of the Act. As a result the grounds dealing with this issue are allowed and the disallowance made by the Assessing Officer is deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
