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TMI Blog2017 (12) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal ("ITAT") in ITA No.300/Del/2006 for the AY 2001-02. 2. This Court framed the following questions of law by its order dated 26th May 2010: 1. Whether the Tribunal is right in holding that Rs. 24,92,33,446/- on account of duty drawback had not accrued and become payable to the assessee and cannot be included in the Taxable income of the assessee for the Assessment Year 1999-2000? 2. Whether learned ITAT/CIT(A) erred in deleting the addition of Rs. 1,48,86,451/- on account of Customs Duty on closing inventory with vendors? 3. Whether Tribunal is right in holding that the Assessing Officer was not justified in making addition of Rs. 33,39,91,012/- on account of excessive consumption of raw material and inputs? 4. Whether learned ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessee to agents based and operating abroad and who earn no assessable income in India. The Assessee contends that no TDS is deductible on such payments under section 195 (1) of the Act and, therefore, the AO was not right in disallowing such payment as deduction by invoking Section 40 (a) (i) of the Act. 9. The Assessee relies on the decisions in CIT v. EON Technology (P.) Ltd. [2012] 343 ITR 366 (Del); CIT v. Model Exims Kanpur [2013] 358 ITR 72 (All) and CIT v. Gujarat Reclaim & Rubber Products Ltd. [2016] 383 ITR 236 (Bom) and on the CBDT Circular No.786 dated 7th February 2000 which clarifies that where the non-resident agent operates outside the country, no part of his income arises in India. It is further contended that since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and/or arisen in India. Therefore, Section 40 (a) (i) of the Act could not be invoked to disallow such payment as deduction on the ground that no TDS under Section 195 (1) was deducted from such payment. Further the CBDT Circular No. 23 dated 23rd July 1969 stated that "A foreign agent of an Indian exporter operates in his own country and no part of his income arises in India." It acknowledges that such commission is remitted to the agent abroad and "not received by him or on his behalf in India. Such agent is not liable to income-tax in India on the commission." This was reiterated by the subsequent Circular No 786 dated 7th February 2000. Both the circulars are binding on the Revenue. 13. The contention of the Revenue that the above Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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