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TMI Blog2021 (7) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Circleii( 1), Chennai [ 2018 (6) TMI 1324 - MADRAS HIGH COURT ] the question of law is decided against the Revenue and in favour of the assessee. - T.C.A.Nos.332 & 333 of 2021 - - - Dated:- 28-6-2021 - Hon'ble Mr. Justice M.Duraiswamy And Hon'ble Mrs.Justice R.Hemalatha For the Appellant (in both TCAs) : Mr.R.Karthik, Senior Standing Counsel COMMON JUDGMENT M.DURAISWAMY, J. Challenging the orders passed in I.T.A.Nos.2892 2893/ Chny/2018 on the file of the Income Tax Appellate Tribunal, B Bench, Chennai, the Revenue has filed the above appeals. 2.The assessee is an individual, engaged in the business of trading and export of leathers, filed its return of income for the Assessment Year 2013-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to be made on the payments made by the assessee to M/s.Impact Fashion International when the service rendered by the non-resident is classified under Technical/managerial/professional services, which is deemed to accrue or arise in India under Section 9(i)(vii) of the Act and TDS has to be deducted under Section 195 of the Act? 4.When the appeals are taken up for hearing, Mr.Karthik Ranganathan, learned senior standing counsel appearing for the appellant-Revenue fairly submitted that the question of law that has been raised in the above appeals has already been decided against the Revenue and in favour of the assessee by the Hon'ble Division Bench of this Court in the judgment reported in [2018] 94 taxmann.com 449 (Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted it would mean obliteration of the expression sum chargeable under the provisions of the Act from Section 195(1). 32.Where there is no liability in India, there can be no question of disallowance under Section 40(a)(i) or Section 40(a)(ia) of the IT Act on the ground of non-deduction of tax at source. Moreover, where a non-resident has no permanent establishment in India, there can be no liability either under the domestic law or under Double Taxation Avoidance Agreement. In any case, even if a non-resident Indian did have a permanent establishment, but income was earned without availing of such permanent establishment, the income for services rendered abroad could not have been liable for tax deduction at source. 33.Under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012] 343 ITR 366 (Delhi), the High Court of Delhi held that payment of sales commission to non-resident who operates outside the country would not attract tax, if payment was remitted abroad directly. Merely because an entry had been made in the books of accounts of the appellant/assessee, that would not mean that the non-resident agent had received payment in India and, therefore, disallowance under Section 40(a)(i) of the IT Act was found uncalled for. 36.The expression fees for technical services has been defined in Explanation (2) of Section 9(1)(vii) of the Income Tax Act to mean any consideration (including any lumpsum consideration) for the rendering of any managerial, technical or consultancy services ( including the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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