9911796707
TMI Blog2014 (1) TMI 1863X X X X Extracts X X X X X X X X Extracts X X X X ..... . iii) Whether the learned CIT(A) is right in holding that the provisions of section 40(a)(i) are not applicable for commission paid by the assessee to non-residents. iv) Whether the learned CIT(A) ought to have held that the payments relate to services utilized in India and therefore the provisions of section 195 and section 40(a)(i) are applicable." 2. Briefly the facts of the case are that the assessee company is engaged in the business in manufacturing of electronic and telecommunication equipment. For the AY 2009-10, it filed the return of income on 25/09/2009 admitting total income of Rs. 3,94,52,230/-. The Assessing Officer completed the assessment under section 143(3) of the Act determining the total income of assessee compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly demonstrated the illustrations to explain that such commission could be paid without deduction of M/s Linkwell Telesystems (P) Ltd., Hyderabad tax. Thus, the main thrust in such a situation is whether the commission made to overseas agents, who are non resident entities, and who render services only at such particular place, is assessable to tax. Sec.195 very clearly speaks that unless the income is liable to be taxed in India, there is no obligation to deduct tax. In order to determine whether the income can be deemed to be accrued or arisen in India, section 9 is the basis. This section does not provide scope for taxing such payment because the basic criteria provided in the section is about genesis or accruing or arising in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If the contentions of the department were to be taken as correct, that any person making payment to a non resident was necessarily required to deduct tax, then the consequences would be that the department would be entitled to appropriate the monies deposited by the payer even if the sum paid is not chargeable to tax because there is no provision in the act by which a payer can obtain refund. As per section 237 read with section 199 implies that only the recipient of the sum i.e. payee would seek a refund. In view of the above hence no tax is deductible u/s 195 on M/s Linkwell Telesystems (P) Ltd., Hyderabad commission payments and consequently the expenditure on export commission payable to non resident for services rendered outside Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
