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TMI Blog2018 (10) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... e under the provisions of the Act. In other words, the payment is not an income which is chargeable to tax in India. Requirement of deducting tax at source under section 195 of the Act would not arise. The nonresident agents appointed by the assessee for procuring export orders do not have permanent establishment in India. Their agents are situated outside India. Their activities as commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of ₹ 18,80,876/- made on account of Commission paid to no-resident u/s. 40(a)(ia) of the Act? 2. The issue arises in relation to assessment year 2011-12. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had paid payment of ₹ 1.20 crore (rounded off) to non-resident out of the total commission of ₹ 1.49 crores (rounded off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter in appeal. CIT(A) gave substantial relief to the assessee. All additions, barring commission payment of ₹ 18.80 lacs (rounded off) were deleted. With respect to the said sum of ₹ 18.80 lacs, Commissioner was of the opinion that this related to the machines which were sold in India. He did not accept the assessee's contention that the non-resident commission agents did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the payment to the nonresident should be a sum chargeable under the provisions of the Act. In other words, the payment is not an income which is chargeable to tax in India. Requirement of deducting tax at source under section 195 of the Act would not arise. This aspect was elaborated by the Supreme Court in case of GE India Technology Center P. Ltd (supra) holding that on mere remittances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nonresident agents appointed by the assessee for procuring export orders do not have permanent establishment in India. Their agents are situated outside India. Their activities as commission agents are being carried out outside India. The Tribunal therefore correctly held that there was no liability on the assessee to deduct tax at source. Merely because a portion of the sale to the overseas pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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