Case Law Details
Dy. CIT Vs Maan Aluminum Ltd. (ITAT Delhi)
The undisputed fact is that the assessee had paid commission to two non-residents on export orders procured by them. It is also undisputed that the non resident agents did not have any permanent establishment or permanent place in India and the agents operated from outside India. It is also undisputed that the commission was paid for services provided to the assessee out of India which was remitted directly outside India and was not received by them or on their behalf by any third party. It is also a matter of record that the assessee has furnished Form 15CA in terms of Rule 37(BB) of the Income Tax Rules which is on record. It is a settled law that income of non-resident agents cannot be considered to accrue or arise or deemed to be received in India when the services rendered by the non-residents and the agents were outside India and the commission was also payable or paid to them outside India. It is also settled law that in absence of Permanent Establishment in India, there is no liability to withhold deduction of payment of commission to the foreign agents. Therefore, in view of the settled legal position as well as the fact that the assessee had duly discharged its duty in filing the required Form 15CA with respect to the foreign remittances, we find no reason to interfere with the findings of the Ld. CIT (A) and we dismiss the grounds raised by the department.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal has been preferred by the revenue against the order dated 10.06.2014 passed by the Ld. Commissioner of Income Tax (A)-IX, New Delhi, wherein vide the impugned order, the Ld. Commissioner of Income Tax (A) has deleted dis allowance made by the AO u/s 40(a)(i) of the Income Tax Act, 1961 (hereinafter called ‘the Act’) amounting to Rs. 34,63,534/- on account of commission paid to non-resident commission agents by the assessee.
2. Brief facts of the case are that the assessee company is engaged in the business of manufacturing of aluminum profiles, section and trading of aluminum ingot and billets. The return of income was filed declaring income of Rs. 2,96,86,077/- and the assessment was completed u/s 143(3) of the Act at an income of Rs. 34,63,634/- after making a dis allowance u/s 40(a)(i) of the Act on the ground of non-deduction of withholding tax on payment of commission to two non-resident agents. A dis allowance of Rs. 9,09,274/- under the provisions of section 14A of the Act was also made by the AO.
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