Case Law Details
CIT Vs Wheels India Limited (Madras High Court)
After hearing the submissions of the auhorized representative of the assessee, the CIT(A) perused the copies of the agreement and on facts, found that the amounts paid by the assessee were sales commission and marketing services to nonresident agents outside India for their services rendered outside India by way of canvassing sales order and none of the entities to whom payments were made by the assessee have a Permanent Establishment [PE] in India. Further, taking note of the relevant Articles in the respective DTAA agreements entered into between India and the respective Country, it was held that the income earned is taxable in those Countries.
Thus, on facts, the nature of services rendered by the non-resident to the assessee was considered by the CIT(A) after perusing the copies of the agreement. This factual finding has attained finality as the appeal filed by the revenue before the Tribunal was dismissed by the impugned order.
Hon’ble Division Bench of this Court in the case of Commissioner of Income Tax vs. Farida Leather Company [(2016) 95 CCH 0146 ChenHC] wherein it was held that sourcing orders abroad, for which payments have been made directly to the non-residents abroad, does not involve any technical knowledge or assistance in technical operations.
In the case of Commissioner of Income Tax vs. Faizan Shoes Pvt. Ltd., [(2014) 367 ITR 0155(Mad)], it was held that the commission paid for procuring order for leather business from overseas buyers – wholesalers or retailers cannot be treated as if for technical services.
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