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TMI Blog2024 (12) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of that no TDS was liable to be made and therefore section 40(a)(i) did not apply. In the present case both the persons to whom the commission has been paid are certainly non-residents. The commission has been paid to them for the services they gave outside India for selling the goods of the appellant outside India. The appellant has made the payment to them by making remittance through regular banking channel from India to overseas in their bank accounts. In view of that recipients of the payments are not liable to tax in India under any provisions of the Income Tax Act, 1961, and therefore, the assessee is not liable to make TDS and Section 195(1) of the Act does not apply. See Nova Techno cast Pvt. Ltd [ 2018 (5) TMI 1182 - GUJARAT HI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Act may kindly be ordered to be deleted. 4. Your appellant craves leave to add, alter, amend or withdraw any of the grounds stated here above. 3. The appeal filed by the assessee, for assessment year 2014 15, is barred by limitation by 14 days. The assessee moved a petition for condonation of delay, requesting the Bench to condone the delay. The ld. Counsel for the assessee argued that Shri Mayurbhai Mehta was the head accountant of the appellant's firm and he handled the Income Tax, GST, banking and he attends to the office of the chartered accountants and tax consultants. The papers for filing the appeal were with Mayurbhai Mehta, however, in the meantime Mayurbhai Mehta, becomes seriously sick and did not attend to his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 83,01,384/, on 29.11.2014. Thereafter, the assessee has filed revised return of income on 10.03.2015, declaring total income at Rs. 76,32,615/-. The assessee firm is engaged in the business of processing and preservation of garlic and onion. The accounts of the assessee are audited and Audit Reports in Form No. 3CA 3CD were filed during the assessment proceedings. The case was selected for scrutiny and notice u/s. 143(2) of the Act dated 31.08.2015 was issued and was duly served upon the assessee. During the assessment proceedings, the assessing officer noticed that assessee has made payments of Rs. 2,94,280/- to Sheetal V Buch and Hermes Brasil Broker, as commission without making TDS, as mandatorily in section 194H of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er (AO), the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the action of the assessing officer. The ld CIT(A) observed that since the assessee has failed to deduct tax at source on the foreign commission payments, the expenses to the extent above are not allowable, as business expenditure, in view of the provisions of Section 40(a) (i) of the Income tax Act, 1961. The ld CIT(A) observed that in the light of the amended provision of Section 195(1) of the Income tax Act, 1961, it is abundantly clear that the assessee is liable to deduct the tax at source, on the foreign commission payments. Since the assessee has failed to deduct tax at source on the commission payments, the expenses to the extent above are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the ld. CIT(A) and other material brought on record. It is an undisputed fact that the assessee has rendered sales and services outside India. We have gone through the remand report of the assessing officer and noticed that assessing officer has categorically accepted the fact that sales and services were rendered outside of India. The Ld. Counsel for the assessee, has contended before the Bench that it is undisputed fact that these payments have been made to non-resident, and these payments have been received by them outside India. The non resident has no permanent resident or business in India, and they had given services outside India and they have not person in any action in India. It was contended that the provisions of section 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in the case of GE Technocast Centre Pvt. Ltd. The relevant observations of the Hon`ble Gujarat High Court, in the above case, are reproduced below: It is indisputably true that such explanation inserted with retrospective effect provides that obligation to comply with subsection (1) of Section 195 would extend to any person resident or non resident, whether or not non-resident person has a residence or place of business or business connections in India or any other persons in any manner whatsoever in India. This expression which is added for removal of doubt is clear from the plain language thereof, may have a bearing while ascertaining whether certain payment made to a non-resident was taxable under the Act or not. However, once ..... X X X X Extracts X X X X X X X X Extracts X X X X
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