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TMI Blog2018 (7) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... the payments made to him by assessee. We find merit in the submissions of the assessee. Accordingly, ground raised in appeal by assessee is allowed. - ITA No. 1535/PUN/2016 - - - Dated:- 29-6-2018 - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Nikhil Pathak For The Revenue : Shri Mukesh Jha ORDER PER VIKAS AWASTHY, JM This appeal by assessee is directed against the order of Commissioner of Income Tax (Appeals)-9, Pune dated 26.05.2016 for the assessment year 2010- 11. 2. The assessee in appeal has raised three grounds. Shri Nikhil Pathak appearing on behalf of assessee stated at the Bar that he is not pressing ground No. 1 and 3. Thus, the only ground left for adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission ₹ 5,04,977/-u/s.40(a)(ia) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 4. Aggrieved by the assessment order dated 31.01.2013, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The First Appellate Authority rejected the contention of the assessee and confirmed disallowance u/s.40(a)(ia) of the Act. Now, the assessee is in second appeal before the Tribunal assailing the findings of Authorities below. 5. The ld. AR for the assessee submitted that the assessee paid commission to Mohd. Iqbal for procuring orders outside India. Thus, the services were rendered by him outside India and he is not having permanent establishment in India. The commission paid to him is not chargeab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by representatives of rival sides and have perused the orders of Authorities below. The solitary issue raised before us, in appeal by the assessee is disallowance u/s. 40(a)(ia) of the Act in respect of commission paid to Mohd. Iqbal of Oman. It is the contention of assessee that commission has been paid to a non-resident for the services rendered outside India. The overseas party has no permanent establishment in India, therefore, payment of commission is not chargeable to tax in India, hence, no TDS was deducted. 8. The Hon'ble Apex Court in the case of GE India Technology Centre (P) ltd. vs. CIT reported as 327 ITR 456 has held that mere remittance to nonresident would not attract provision for deduction to tax at source. The du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by way of fees for technical services (FTS). In the present case, the dispute is not regarding payment of royalty or FTS but the dispute is regarding payment of commission and therefore, these clauses are not applicable and as a consequence, explanation to section 9(2) has no relevance. 7. As per ground No.7, the Revenue has raised the issue regarding Board's Circular No. 7/2009 dated 22/10/2009.We find that as per this Circular, CBDT has withdrawn some earlier circulars particularly Circular No. 786 dated 07/02/2000, which provided certain clarifications with respect to Circular No. 23 dated 23/07/69.This Circular No. 786 provided that tax is not deductible at source from payments made to non-resident agents. In our considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders for the assessee and following up payments and apart from that, no other services were being rendered. It was held that since non-residents were not providing any technical services to assessee, payments made to them did not fall under category of royalty or fee for technical services u/s. 9(1)( vii) of the Act. The Tribunal further held that even otherwise, since commission paid to nonresident was not taxable in India, the assessee was not required to deduct tax at source while making said payments. The facts in the present case are identical because in the present case also, commission was paid to non-resident for procuring orders without deducting tax. 9. As per above discussion, we have seen that even after considering Circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India. Similar view has been taken by Mumbai Bench of the Tribunal in the case of Lucid Colloids Ltd. Vs. ACIT (supra.) 10. In the present case, we find that the Revenue has not controverted the submissions of the assessee that Mohd. Iqbal of Oman has rendered services to the assessee outside India and that he has no permanent establishment in India. The commission has been paid to him for the services rendered to assessee outside India. Thus, in view of the undisputed facts of the case and the decisions discussed above, we are of considered view that commission paid to Mohd. Iqbal was not chargeable to tax in India. Therefore, there was no question of deducting tax at source on the payments made to him by assessee. We find merit in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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