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TMI Blog2020 (2) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... case. Therefore, it will be appropriate to restore this issue to the file of the Assessing Officer and assessee is directed to furnish all the necessary evidences before the Assessing Officer which the Assessing Officer will verify and decide the issue afresh. Needless to say the assessee be given opportunity of hearing by following principles of natural justice. Ground No.1 and 2 are partly allowed for statistical purposes. TDS u/s 195 - Whether non-residents have a PE and Back Office in India - HELD THAT:- AO has not brought on record to show that such nonresidents have a PE or not, in India. In fact, the services of the foreign agents are rendered by the assessee not to use in India but are used for sales outside India. Thus, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitration award. 3. Whether on the facts circumstances of the case in law, the Ld. CIT (A) is justified in deleting the addition of ₹ 56,05,298/- made by the AO under section 40a(i) of the Act for violation of section 195 of the Act?. 4. The appellant craves the right to add, alter or amend any ground of appeal before or during the course of the hearing of the appeal. 3. Return of income declaring total income of ₹ 97,05,780/- was filed on 30.09.2011. During the previous year, the assessee derived income from business and profession (processing trading export of food products and processing of mustard oil cakes and trading in commodities). The case was processed u/s 143(1) of the Income Tax Act, 1961. Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance on rate of difference of ₹ 2,97,70,427/- as claimed by the expenses. Thus, the Assessing Officer made addition to the extent of ₹ 4,52,10,530/-. 4. Being aggrieved by the assessment order, the assessee filed an appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee. 5. The Ld. DR submitted that the Assessing Officer has rightly made a disallowance of ₹ 2,97,70,427/- on account of loss on rate settlement (contracts) as there was no evidence produced before the Assessing Officer. As regards an addition of ₹ 56,05,298/- u/s 40(a)(ia), the Ld. DR submitted that the Assessing Officer was right in making addition as commission paid to the foreign agent by the assessee firm is covered u/s 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed for statistical purposes. 9. As regards Ground No.3, it can be seen from the Assessment Order that the Assessing Officer has not brought on record to show that such nonresidents have a PE or not, in India. In fact, the services of the foreign agents are rendered by the assessee not to use in India but are used for sales outside India. Thus, the commission paid to the foreign agents for rendering services outside India does not come under the purview of Section 195 of the Income Tax Act, 1961. Thus, the CIT(A) was right in deleting the addition of ₹ 56,05,298/- made u/s 40(a)(ia) of the Income Tax Act, 1961. There is no need to interfere with the findings of the CIT(A). Hence, Ground No.3 is dismissed. 10. In result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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