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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI G.S. PANNU & SHRI SANJAY GARG
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the Revenue against the order dated 27.08.2014 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10.
The sole issue raised by the Revenue in this appeal is against the action of the Ld. CIT(A) in deleting the disallowance made by the Assessing Officer (hereinafter referred to as the AO) under section 40(a)(ia) for non deduction of TDS on the remittance made by the assessee on account of commission paid to the oversees agents namely Planning Coml Importadora Ltd. Brazil. The AO observed that the assessee was liable to deduct TDS on such payments under section 195 of the Act.
The Ld. CIT(A), however, deleted the disallowance made by the AO observing that the payments were made to the non resident and out of India
2 M/s. Unisynth Chemicals and that no income chargeable to tax under the Indian Income Tax has accrued to the said foreign agent. The payment received by the foreign agent from the assessee was not chargeable to tax in India. He, therefore, relying upon the decision of the Hon’ble Supreme Court in the case of “GE India Technology Centre (P) Ltd. vs. CIT” (2010) 10 SCC 29 and several other High Courts and Tribunal decisions deleted the disallowance made by the AO. The Revenue, thus, has come in appeal before us.
We have heard the rival contentions and have also gone through the records. Admittedly, the commission payment made by the assessee in this case has been made to oversees agent who has no permanent establishment in India. The income of the foreign agent on this account thus is not chargeable to tax in India. The Ld. CIT(A), relying upon the decision of the Hon’ble Supreme Court in the case of “GE India Technology Centre (P) Ltd. vs. CIT” (supra) and various other decisions, has, thus, rightly set aside the disallowance made by the AO. We, therefore, do not find any merit in the appeal of the Revenue and the same is therefore dismissed.
Order pronounced in the open court on 15.06.2016.