No TDS on Export commission paid to NRI for services rendered abroad

ACIT Vs Lux Industries Ltd. (ITAT Kolkata)

Since export commission payments to non-resident agents were not taxable in India, as agents were remaining outside, services were rendered abroad and payments were also made abroad TDS under section 195 was therefore, not deductible from payment made to NRI agents.

FULL TEXT OF THE ITAT JUDGMENT

These Revenue’s appeals for A.Y.2012-13 & 2013-14 arise against the CIT(A)-1, Kolkata’s separate orders both dated 09.06.2015 passed in Appeal Nos. 1359 & 1408/CIT(A)-24/( 12-13)& (13-14)/15-16 respectively; reversing the Assessing Officer’s action raising principal and interest demands of Rs.72,05,567/- and Rs.23,05,781/- in former and Rs.63,44,293/- and Rs.14,59,187/- in latter assessment year; respectively, on account of tax payer’s failure in deducting TDS on export commission paid to various UAE based payees, involving proceedings u/s 201(1)/201(1A) of the Income Tax Act, 1961 (Act).

Both Learned Representatives state at the outset that the relevant facts giving rise to the impugned identical foreign export commission payments involve a common issue. We thus take up former assessment year 2012-13 in appeal No.1 144/Kol/2015 as the lead case.

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