Section 40 Disallowance Fails for Overseas Commission Payments

Kloeckner Desma Machinery Private Limited Vs DCIT (ITAT Ahmedabad) Export Commission Paid to Non-Resident Agents Not Taxable in India — No TDS Required; Disallowance Deleted (A.Y. 2017-18) The Ahmedabad Bench of the ITAT allowed the assessee’s appeal and deleted the disallowance of export commission paid to non-resident agents for A.Y. 2017-18. The AO had disallowed 30% of commission for non-deduction of TDS by invoking Section 40(a)(ia) (erroneously, instead of Section 40(a)(i)) on payments to foreign agents. The Tribunal held that: The non-resident agents rendered services entirely outs...