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| The Tax Publishers2020 TaxPub(DT) 2770 (Del-Trib) : (2020) 083 ITR (Trib) 0433 INCOME TAX ACT, 1961
Section 195 read with section 40(a)(i)
Where agents had their base situated in abroad and moreover services were also rendered by them outside, therefore, assessee was not required to deduct tax at source in terms of section 195, while making payments to said foreign agents.
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Tax deduction at source - Under section 195 - Foreign agency commission -
Assessee claimed deduction of commission paid to foreign agents appointed by it to promote sales outside India. AO disallowed the deduction on allegation that tax was not deducted under section 195. Held: Agents had their base situated in abroad and moreover services were also rendered by them outside. Therefore, assessee was not required to deduct tax at source while making payments in question. Further, in assessee's own case for assessment year 2010-11, Tribunal held that commission agents based outside India rendering services of procuring orders could not be said to have a business connection in India and commission paid to them could not be said to have either accrued or arisen in India. It could not be classified as fee for technical services, therefore, assessee was not liable to withhold tax under section 195 from said commission payments.
Followed:Divya Creation v. ACIT (2017) 86 taxmann.com 276 (Delhi-Tribu.) : 2017 TaxPub(DT) 4523 (Del-Trib)Distinguished:Transmission Corporation of AP Ltd. & Anr. v. CIT (1999) 239 ITR 587 (SC) : 1999 TaxPub(DT) 1403 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2014-15
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