Additions made by AO upheld by ITAT referece made withdrawn Board' Circular.
Additions made by AO upheld by ITAT referece made withdrawn Board' Circular.
"Assessee co. did Import & Export of Agri Produces. Assessee filed its return of income declaring total income. His case was selected for scrutiny. Assessm't was framed u/s.143(3) (of Income Tax Act, 1961) & total income was determined. On appeal CIT(A) allowed appeal of assessee. On appeal ITAT held, Board's Circular that was withdrawn by Circular was applicable in year under consideration when payment was made by assessee & that it was withdrawn after present assessment."-500988
Facts in Brief:
1. The Assessee is a company stated to be engaged in the business of Import and Export of Agri Produces.
2. Assessee filed its return of income declaring total income.
3. The case was selected for scrutiny and thereafter assessment was framed u/s.143(3) (of Income Tax Act, 1961) and the total income was determined.
4. On appeal CIT(A) allowed the appeal of the assessee.
5. Aggrieved by the order of ld. CIT(A), Revenue is now in appeal before us and has raised following effective ground:
"The ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad has erred in law and on facts in deleting disallowance of Rs.37,98,657/- made on account of foreign brokerage paid to non-residents u/s.40(a)(ia) (of Income Tax Act, 1961)."
On appeal ITAT held,
6. The issue in the present case is about disallowance of foreign commission payment on account of non-deduction of TDS.
7. We find that ld. CIT(A) while deleting the addition has given a finding that the payments were made to non- resident for the services rendered by them outside India and the provisions of Section 9(1)(i) (of Income Tax Act, 1961) cannot be applied as the income cannot be deemed to be income accrued or arising to the non-residents in India and that once the income is not taxable in India, the law of deducting TDS does not arise.
8. He further after relying on the decision of Hon'ble ITAT, Jaipur Bench in case of ACIT vs. Modern Insulator Ltd. (supra) has given a finding that the payment I T A N o . 2 5 8 2 / Ah d / 2 0 1 2 A. Y . 0 9 - 1 0 [ D C I T ( O S D ) v s . M / S . V N KC A g r o c o m P v t . L t d] Page 5 made as brokerage and commission cannot be considered as managerial services and the provisions of Section 40(a)(i) (of Income Tax Act, 1961) are not applicable to the payment of brokerage.
9. He has further noted that the Board's Circular that was withdrawn by Circular No.7 dated 22.10.2009 was applicable in the year under consideration when the payment was made by assessee and that it was withdrawn from 22.10.2009 i.e. after present assessment year. He after relying on various decisions cited in the order had deleted the addition made by A.O.
10. Before us, Revenue has not brought on record any material to controvert the findings of ld. CIT(A) nor has pointed to any contrary binding decision. In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) and thus, the ground of Revenue is dismissed.
11. In the result, the appeal of the Revenue is dismissed.
Case Reference - Income Tax Appellate Tribunal - Ahmedabad Vnkc Agrocom Pvt.Ltd.,, ... vs Department Of Income Tax.
×
