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TMI Blog2021 (6) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... any permanent establishment in India. Assessee has consistently denied that they do not have any permanent establishments in India. Further the commission was remitted to them directly outside India. The issue is squarely covered in favor of the assessee that foreign commission paid to foreign agents no tax is required to be deducted u/s 195 of the Act and, therefore, disallowance u/s 40(a)(ia) has correctly been deleted. Thus, we confirm the order of the Id. CIT (Appeals) and dismiss ground Nos. 1 and 2 of the appeal of AO. Disallowance of commission - Allegation of the AO was that commission paid to Rohit Anand (HUF) is for rendering services, but the commission is paid to HUF - HELD THAT:- In the present case the rendition of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prashant Maharishi, Member (A) 1. This appeal is filled by the Assistant Commissioner of Income Tax, Circle 47 (1), New Delhi, for assessment year 2009-10 against the order passed by the CIT (Appeals)-16, New Delhi, dated 30.10.2015. 2. The revenue has raised the following grounds of appeal:- 1. Whether the commission payment of ₹ 3,41,57,558/- can be allowed even when these payments were made without obtaining no-deduction certificate u/s. 197 of the I.T. Act? 2. Whether the commission payments of ₹ 3,41,57,558/- made without TDS being deducted can be allowed to the agents who have business connection in India and are subject to tax deduction at source u/s. 195 of the Act? 3. Whether the commission payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Mr. Amanullah Khan, same is disallowable. 4. Assessee submitted that the commission paid to foreign agents who are outside India, provided services outside India and, therefore, no part of income accrues to the foreign agents in India and, therefore, as per provisions of Section 195 of the Act no tax is required to be deducted. Assessee also relied on Circular No. 23 dated 23.07.1969, Circular No. 786 dated 7.02.2000 and further the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Eon Technologies P. Ltd. (2012) 343 ITR 366 (Del). It was also stated that there is no permanent establishment of the foreign agents in India and, therefore, no tax is required to be deducted. 5. The Id. Assessing Officer rejected the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and does not require any mention. The assessment order under Section 143(3) read with Section 147 of the Act on 31.03.2014 determining the total income of the assessee at ₹ 3,73,52,680/- against the returned income of ₹ 17,54,510/-. 9. The assessee preferred an appeal before the Id. CIT (Appeals) who deleted the disallowance of ₹ 3,41,57,558/- of commission paid to foreign agents and also deleted the disallowance of commission payment of ₹ 1,31,995/- to the Indian party vide order dated 30th October, 2015 and, therefore, the Revenue is in appeal before us on this issue. 10. On both the above grounds the Id. DR relied upon the order of the Assessing Officer. 11. The Id. AR relied upon the order of the Id. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (supra) and Angelique International Limited (supra) cited by the Id. AR. Both the above decisions of the Hon'ble Delhi High Court in the case of CIT Vs. Eon Technologies P. Ltd. (supra). Further it is not the case of the revenue that export commission income of foreign agent for soliciting orders from outside India was earlier chargeable to tax and CBDT circulars exempted it. Thus, withdrawal of those circulars does not have any impact on taxability of export commission and TDS there on. In the present case It is an established fact that agents are nonresidents, operating their business activity outside India, commission payments is related to their service rendered outside India and Revenue could not show that those commission ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound No. 3 of the appeal. Thus, we confirm the order of the Id. CIT (Appeals) and dismiss ground No. 3. 15. Ground No. 4 is with respect to the deletion of the addition of ₹ 3,47,232/- on account of interest on investment when the assessee had not sufficient interest free funds available. We find that assessee has shown capital of ₹ 28,00,000/- and also interest free loan from family members of ₹ 1,05,90,000/- against which the investment in property is merely ₹ 28,93,600/-, Thus there was enough interest free funds available with the assessee. Thus the action of the Id. Assessing Officer to disallow the interest on the above sum @ 12% out of above interest paid by the assessee of ₹ 13,91,000/- is not correc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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