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TMI Blog2018 (3) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... tds on commission paid by the assessee to persons who are not residents in India and who rendered services outside India - Held that:- As decided in Circular No.786, dated 07.02.2000 If commission does not accrue or arise in India, the same is not taxable. in India. Non-resident agent operates outside the country, no part of his income arises in India, and since the payment is usually remitted directly abroad, it cannot be held to have been received by or on behalf of the agent in India. Such payments were therefore, held to be not taxable in India - Decided in favour of assessee Addition made under Nursery expenses - nature of expenditure - revenue or capital - Held that:- We are of the view that in the light of the admitted factual position that expenses were incurred on plants and for replantation without any expansion of plantation area or replantation in an abandoned area, the expenditure in question cannot be regarded as a capital expenditure. - Decided in favour of assessee - ITA No.2090/Kol/2016 - - - Dated:- 1-3-2018 - Shri N.V.Vasudevan, JM And Shri Waseem Ahmed, AM For The Appellant : Shri S.Dasgupta, Addl.CIT(DR) For The Respondent : Nonea ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td., (supra), the Hon ble Calcutta High Court held as follows : The only issue involved in this appeal is as to whether the deletion of the addition by the Assessing Officer on account of Employees Contribution to ESI and PF by invoking the provision of Section 36(1)(va) read with Section 2(24)(x) of the Act was correct or not. It appears that the Tribunal below, in View of the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., reported in 2009 Vol.390 ITR 306, held that the deletion was justified. Being dissatisfied, the Revenue has come up with the present appeal. After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec. 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nat.ure and is required to be applied retrospectively with effect from 1 st April, 1988. Such being the position, the deletion of the amount paid by the Em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly dismissed. 13. Ground No.3 raised by the revenue reads as follows :- 3. That on the facts and circumstances of the case and in law Ld.CIT(A) has erred in deleting the addition of ₹ 11,50,740/- made u/s40(a)(ia) for nondeduction of tax at source in view of the judgement given by the Apex Court in the case of M/s. Transmission Corporation of India reported in 239 ITR 587. 14. The AO disallowed a sum of ₹ 11,50,740/- which was commission paid by the assessee to persons who are not residents in India and who rendered services outside India. The AO made the disallowance for the reason that the assessee did not deduct tax at source on the aforesaid payment and had invoked the provision of section 40(a)(ia) of the Act which lays down that any payment of commission without deduction of Tax at source as per the provisions of sec. 194H of the Act would result in the commission expense not being allowed as deduction in computing income from business. 15. On appeal by the assessee, the CIT(A) deleted the addition made by the AO for the reason that commission income did not accrue or arise to the agents in India because services were rendered outside In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation to deduct tax and as provision u/s. 40(a)(ia) does not apply, the disallowance made by the 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. According to him, this is covered by the decision of Hon 'ble Supreme Court in the case of GE India Technology Centre P. Ltd. vs. CIT 44 DTR. 201 (SC). As the issue is covered in favour of assessee by the decision of Hon 'ble Supreme Court, we have no reason to interfere in the order of CIT (A) and we confirm the same. This issue of revenue's appeal is also dismissed. As the issue is covered in assessee's own case in AY 2007-08, we confirm the order of CIT (A). Accordingly, this issue of Revenue's appeal is dismissed. Respectfully following the above decisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O therefore concluded that the expenditure was capital expenditure. 21. On appeal by the assessee the CIT(A) found that on identical issue the tribunal in assessee s own case in A.Y.2009-10 deleted similar addition made by the AO observing as follows :- The issue is covered by the Hon'ble ITAT Kolkata Bench 'A' in ITA No. 905/K0l/2013 dated 29.02.2016 wherein it has been held as under: We find that the assessee has incurred expenditure for re-plantation in the existing area and plants grown in the nursery were used for replacement of dead plants within the plantation area. This fact has not been denied by revenue before CIT (A) or before us now. The AO also noted that this is replantation in the existing area and replacement of dead plants but by going through the volume of expenditure he made disallowance and Hon 'ble Jurisdictional High Court in the case of Tasati Tea Ltd. (supra) has considered the issue and allowed the claim of replacement of plants in existing area against dead plants by observing as under: But however we are not inclined to interfere with the order allowing the expenditure of ₹ 468615/- as a revenue expenditure, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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