PR.COMMISSIONER OF INCOME TAX-5
What did the High Court hold?
The Tribunal held that the services rendered by the agents were for business advancement and not technical services, making the payments not subject to disallowance under Section 40(a)(i). The Court agreed with the ITAT's interpretation of the agreements.
What were the facts?
The Revenue appealed against the ITAT's deletion of disallowance made under Section 40(a)(i) for payments to foreign agents. The AO considered these payments as fees for technical services, while the ITAT found them to be for business advancement.
What were the issues?
Whether payments to foreign agents for services rendered constitute fees for technical services, and if so, whether TDS was deductible. Whether payments to foreign entities for tour expenses require TDS deduction when the recipient is not liable to tax in India.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
ITA Nos. 489 & 491 of 2015
Page 1 of 3
$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 1. +
ITA 489/2015
PR.COMMISSIONER OF INCOME TAX-5 ..... Appellant Through: Mr. Rohit Madan, Senior Standing counsel with Mr. Akash Vajpai, Advocates.
versus
LE PASSAGE TO INDIA TOURS & TRAVELS PVT. LTD.
..... Respondent
AND
+
ITA 491/2015
PR.COMMISSIONER OF INCOME TAX-5 ..... Appellant Through: Mr. Rohit Madan, Senior Standing counsel with Mr. Akash Vajpai, Advocates.
versus
LE PASSAGE TO INDIA TOURS & TRAVELS PVT. LTD.
..... Respondent
CORAM: HON’BLE DR. JUSTICE S. MURALIDHAR HON'BLE MR. JUSTICE VIBHU BAKHRU
O R D E R %
10.08.2015
In these appeals under Section 260A of the Income Tax Act, 1961 (‘Act’) against the order dated 19th December 2014 passed by the Income Tax This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:58:33
ITA Nos. 489 & 491 of 2015
Page 2 of 3
Appellate Tribunal (‘ITAT’) in ITA Nos. 210/Del/2012 and 498/Del/2012 for the Assessment Years (‘AYs’) 2007-08 and 2008-09, the first question projected by the Revenue is whether the ITAT has erred in deleting disallowance of Rs.2,77,62,022 made by the Assessing Officer (‘AO’) under Section 40 (a) (i) of the IT Act in AY 2007-08 on the ground that the services rendered by the agents to the Assessee were in the nature of fee for technical services.
On the said issue, the ITAT has analysed the agreements in question entered into by the Assessee with the foreign entities (agents) and concluded that the services rendered by the ‘agents’ were purely in the nature of advancement of the business of the Assessee which could not be categorised as managerial/technical or consultancy services. Consequently, it was held that the consideration paid by the Assessee to such agents could not be classified as fee for technical services.
The Court finds that the view taken by the ITAT on the interpretation of clauses of the agreements in question was a plausible one. It is also consistent with the decision of this Court in DIT v. Pan Alfa Auto Elektrik Ltd. [2014] 272 ITR 117 (Del) and the decision dated 29th May 2015 in ITA This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:58:33
ITA Nos. 489 & 491 of 2015
Page 3 of 3
325 of 2014 (CIT v. M/s. Grup ISM). Consequently, this Court finds no substantial question arises for determination on this issue.
The second issue sought to be projected is whether the payments could have been made by the Assessee to the foreign entities towards tour expenses without deduction of TDS. The CIT (A) has held against the Revenue on this issue. Where the recipient of the payment is not liable to tax in India, the question of deducting tax at source on payments made to such entity does not arise.
The appeals are accordingly dismissed.
S. MURALIDHAR, J
VIBHU BAKHRU, J AUGUST 10, 2015/dn This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/04/2026 at 21:58:33
More judgments on Section 40(a)(i)
- M/S American Express Bank Ltd., Mumbai vs The Jt DIT (It)1(1), MumbaiITA 9414/MUM/2004[2000-2001]Status: Disposed8 Oct 2026AY 2000-2001
- DDIT(It)- 1(1), Mumbai vs M/S. American Express Bank Ltd., MumbaiITA 5667/MUM/2004[2000-01]Status: Disposed8 Oct 2026AY 2000-01
- Eurofins Peenya Resources Private Limited… vs Deputy Commissioner of Income Tax…ITA 1116/BANG/2023[2016-17]Status: Disposed28 Sept 2026AY 2016-17
- Azure Green Tech Private Limited, Delhi vs Deputy Commissioner of Income Tax, Circle…ITA 6199/DEL/2026[2021-22]Status: Disposed21 Sept 2026AY 2021-22
- Azure Green Tech Private Limited, Delhi vs Deputy Commissioner of Income Tax, Circle…ITA 6198/DEL/2026[2020-21]Status: Disposed21 Sept 2026AY 2020-21
Recent GST High Court judgments
Search GST case law →- M/S. Bangi Mines And Minerals vs. The State Of TelanganaTelangana · 30 Oct 2026
- M/S. Arka Business Solutions vs. Principal Commissioner Of CustomsTelangana · 30 Oct 2026
- M/S. Mehra Mac Industries Private Limited vs. The Deputy State Tax OfficerTelangana · 30 Oct 2026
- Santosh Das And Anr. vs. Union Of INDIACalcutta · 30 Oct 2026
- M/S Rama Krishna Industries vs. State Of Hp And OthersHimachal Pradesh · 30 Oct 2026