Case Law Details
Bengal Tea & Fabrics Ltd. Vs Dy. CIT (ITAT Kolkata)
ITAT held that when no business operations of commission agent were carried on in India, commission earned by them would be outside the ambit of income ‘deemed to accrue or arise in India’ for the purpose of section 5(2)(b) read with section 9(1)(i) of Income tax act, 1961, therefore, question of deducting tax under section 195 did not arise and disallowance in question was not justified.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-6, Kolkata dated 20.05.2016. Assessment was framed by DCIT, Circle-4, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 22.10.2014 for assessment year 2012-13 and assessee has raised following grounds:-
“1. For that in view of the facts and circumstances of the case the Ld. CIT is wholly wrong and unjustified in confirming the arbitrary disallowance of Rs. 15,42,693/- made in the assessment u/s. 40(a)(ia) of the I. Tax Act on a/c of the payment of export commission made by the assessee company to two non-resident agents for services rendered outside India, in relation to export of cotton yarn, without deduction of tax at source u/s. 195 of the Act.
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