D.C.I.T.,Circle-2(2), Kolkata V. M/s Shalimar Wires Industries Ltd., Kolkata

ITA 1354/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0027 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 31-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISIWAS
• Keywords: Capital asset; Business income; Double taxation relief; Services rendered outside India; Deemed to accrue or arise in india; Retrospective amendment; Permanent establishment; Advance ruling; Assessment record; TDS
• Section: 143(3); 195; 192; 139(1); 48; 9(1); 9(1); 9(1); 13; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1354 / KOL / 2019 ASSESSMENT YEAR :2013-14 DCIT, CIRCLE-2(2), ROOM NO. 24, 7 TH FLOOR, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKAT-700 069 V/S . M/S SHALIMAR WIRES INDUSTRIES LTD., 25, G.C. AVENUE, KOLKATA-23 [ PAN NO.AAICS 2281 G ] /APPELLANT .. / RESPONDENT /BY APPELLANT SMT. RANU BISIWAS, ADDL. CIT-DR /BY RESPONDENT NONE /DATE OF HEARING 17-12-2019 /DATE OF PRONOUNCEMENT 23-12-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-5 KOLKATAS OR DER DATED 06.03.2019 PASSED IN CASE NO.509/CIT(A)-5/CIRCLE-2(2)/18-19/KO L INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT T HE ACT CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEHES T. IT IS ACCORDINGLY PROCEEDED EX PARTE . HEARD LEARNED DEPARTMENTAL REPRESENTATIVE. CASE FILE PERUSED. 2. THE REVENUES FORMER SUBSTANTIVE GRIEVANCE PLEAD ED IN THE INSTANT APPEAL SEEKS TO REVERSE THE CIT(A)S ACTION DELETI NG COMMISSION DISALLOWANCE OF 1,72,38,405/- TO ASSESSEES OVERSEAS COMMISSION AGE NTS ON ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 2 ACCOUNT OF NON-DEDUCTION OF TDS MADE BY THE ASSESS ING OFFICER IN HIS ASSESSMENT ORDER DATED 30.03.2016. MRS. BISWAS TAKE S US TO CIT(A)S DETAILED DISCUSSION TO THIS EFFECT READING AS UNDER :- 9. GROUND NO. 7 RELATES TO DISALLOWANCE OF RS.1,72 ,38,405//- BEING COMMISSION PAID TO NON- RESIDENTS. THE AO IN ASSESSMENT ORDER HAS OBSERVED THAT ON PERUSAL OF THE INDIVIDUAL TRANSACTION STATEMENT (ITS) IT IS SEEN THAT ON NUMB ER OF OCCASIONS OUTWARD REMITTANCES WERE MADE WITHOUT WITHHOLDING OF TAX, AS APPEARED IN THE DETAILS OF 15CA CERTIFICATES. THE MATTER WAS DRAWN UNDER THE KNOWLEDGE OF THE A/R. OF THE AS SESSEE DURING THE COURSE OF HEARING ON 26.11.2015. A COPY OF ITS DETAILS WAS HANDED OVER T O THE A/R OF THE ASSESSEE. ON 26.11.2015 IT WAS SUBMITTED, 'WE HAVE APPOINTED SELLING AGENTS AT VARIOUS COUNTR IES TO PROMOTE EXPORT SALES. OUR CHIEF EXECUTIVES VISIT THESE COUNTRIES AND WITH THE RESOURCES OF THESE SELLING AGENTS WE PROCURE SUBSTANTIAL ORDERS FROM VARIOUS CLIENTS. AFTER THE GOODS ARE EXPORTED AND PAYMENT RECEIVED BY US WE PAY THEM COMMISSION ON TH E BASIS OF SALES ORDERS RECEIVED FROM THESE COUNTRIES, AT THE AGREED RATES. WE ARE PAYING THEM COMMISSION WITHOUT ANY DEDUCTION OF TAX AT SOURCE AS THE SERVICES ARE RENDERED OUTSIDE INDIA AND ANY SENDEE RENDERED OUTSIDE INDIA IS NOT TAXABLE IN INDIA. SINCE THE PAYMENT DOES NOT ATTRAC T TAX THERE IS NO INVOLVEMENT OF DOUBLE TAXATION AVOIDANCE AGREEMENT IN THESE PAYMEN TS.' THE ASSESSEE WAS FURTHER REQUESTED ON 11.01.2016 TO FURNISH ITS COMMENTS ON OUTWARD REMITTANCE (WITHOUT TDS]. IN RESPONSE VIDE LETTER D ATED THE ASSESSEE REPLIED, 'WE ARE FORWARDING HEREWITH COPIES OF FORM 15CB AND FORM 15CA IN RESPECT OF THE COMMISSION ON EXPORT OF GOODS WHICH WAS PAID TO OUR OVERSEAS COMMISSION AGENTS. AS REQUIRED BY YOU, WE ARE ENCLOSING HEREWITH THE D ETAILS OF VARIOUS CASE LAWS WHEREIN IT IS HELD THE COMMISSION PAID TO OVERSEAS AGENTS FOR EXPORT SALE IS NOT TAXABLE IN INDIA. THE REPLY OF THE ASSESSEE WAS NOT SATISFACTORY. THE BUSINESS OF THE ASSESSEE IS CONTROLLED FROM INDIA. EXECUTION OF ANY ORDER REGARDING THE BU SINESS ACTIVITY IN INDIA COMMENCES AS WELL AS TERMINATES IN INDIA DISBURSEMENT OF ANY FUND TO ANY PARTY INCLUDING NON-RESIDENTS IS CONTROLLED FROM THE OFFICE BASED IN INDIA. IN THE I NSTANT CASE, THOUGH THE PAYMENT WAS MADE TO THE NON-RESIDENTS WHO HAD RENDERED SERVICE TO THE P ARTIES OUTSIDE INDIA, BUT EXECUTION OF THE ORDER ARISES FROM INDIA. THEREFORE, THE CLAIM OF TH E ASSESSEE THAT THE AMOUNT DOES NOT ACCRUE AS INCOME IN INDIA IS NOT- CORRECT AND IT DESERVES WITHHOLDING OF TAX. BEFORE PROCEEDING FURTHER, IT IS NECESSARY TO CONSI DER THE SCOPE OF INCOME OF NON- RESIDENTS AS STATED IN SEC. 5(2)(B) READ WITH SEC. 9(1) OF TH E I.T. ACT AND ALSO REFLECT ON THE SITUS OF THE SOURCE. SEC. 5(2)(B) OF THE I.T. AD PROVIDES FOR TH E TOTAL INCOME OF THE NON-RESIDENTS AND STATES AS UNDER: 'SUBJECT TO THE PROVISIONS OF THIS ACT, THE TOTAL I NCOME OF ANY PREVIOUS YEAR OF A PERSON WHO IS A NON-RESIDENT INCLUDES ALL INCOME FR OM WHATEVER SOURCE DERIVED WHICH - ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE TO HIM IN INDIA DURING SUCH YEAR. THUS, THE SEC, 5(2)(B) DEALS WITH THE SCOPE OF TOTA L INCOME OF A NON-RESIDENT AND PROVIDES THAT SUBJECT TO THE OTHER PROVISION OF THE I.T. ACT, TOT AL INCOME OF ANY PREVIOUS YEAR OF A NON- RESIDENT INCLUDES ALL INCOME FROM WHATEVER SOURCES DERIVED, WHICH ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE IN INDIA DURING THE PREVI OUS YEAR. FURTHER, THE SEC. 9(1) OF THE LT. ACT PROVIDES FOR INCOME WHICH IS DEEMED TO ACCRUE O R ARISE IN INDIA. THE FOLLOWING INCOME SHALL BE DEEMED TO ACCRUE OR A RISE IN INDIA - ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 3 (I) ALL INCOME ACCRUING OR ARISING, WHETHER DIRECTL Y OR INDIRECTLY, THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA. OR THROUGH OR FROM AN Y PROPERTY IN INDIA, OR THROUGH OR FROM ANY ASSET OR SOURCE OF INCOME IN INDIA[****] O R THROUGH THE TRANSFER OF A CAPITAL ASSET SITUATE IN INDIA. THUS IN OTHER WORDS, SEC. 9(I)(I) STATES THAT ALL I NCOME ACCRUING OR ARISING, WHETHER DIRECTLY OR INDIRECTLY, THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA OR PROPERTY IN INDIA OR ANY ASSET OR SOURCE IN INDIA, OR THROUGH THE TRANSFER OF CAPI TAL ASSET SITUATED IN INDIA, SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA. THE REPLY OF THE ASSESSEE IS NOT TENABLE. IN THIS C ONTEXT, THE PROVISIONS OF SECTION 195(1) OF THE ACT MAY BE REFERRED AND IT READS AS UNDER: 'ANY PERSON RESPONSIBLE FOR PAYING TO A NON-RESIDEN T, NOT BEING A COMPANY, OR TO A FOREIGN COMPANY, ANY INTEREST [(NOT BEING INTEREST REFERRED TO IN SECTION 194LB OR SECTION 194LC)] [OR SECTION 194LD] OR ANY OTHER SUM CHARGEABLE UNDER THE PROVISIONS OF THIS ACT NOT BEING INCOME CHARGEABLE UNDER THE H EAD ' SALARIES ' SHALL, AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE O R AT THE TIME OF PAYMENT THEREOF IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT TO BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT INCOME-TAX THEREON AT THE RATES IN FORCE:' EXPLANATION 2 - FOR THE REMOVAL OF DOUBTS, IT IS HE REBY CLARIFIED THAT THE OBLIGATION TO COMPLY WITH SUB-SEC/ION (1) AND TO MAKE DEDUCTION THEREUND ER APPLIES AND SHALL HE DEEMED TO HAVE ALWAYS APPLIED AND EXTENDS AND SHALL BE DEEMED TO H AVE ALWAYS EXTENDED TO ALL PERSONS, RESIDENT OR NON-RESIDENT, WHETHER OR NOT THE NON-RE SIDENT PERSON HAS- A RESIDENCE OR PLACE OF BUSINESS OR BUSINESS CONNEC TION IN INDIA; OR ANY OTHER PRESENCE IN ANY MANNER WHATSOEVER IN INDIA] SECTION 195 DEALS WITH DEDUCTION OF TAX IN CASES WH ERE PAYMENT IS TO BE MADE TO A NON- RESIDENT. THE SCHEME OF SUB-SECTIONS (1), (2) AND ( 3) OF SEC. 195-ID SEC. 197 LEAVES NO DOUBT THAT THE EXPRESSION ' ANY OTHER SUM CHARGEABLE UNDER THE PROVISIONS OF TH IS ACT ' WOULD MEAN ' SUM ' ON WHICH INCOME TAX IS LEVIABLE. THE CONSIDERATIO N WOULD BE WHETHER PAYMENT OF THE SUM TO THE NON-RESIDENT IS CHARGEABLE TO TAX UN DER THE PROVISIONS OF THE ACT OR NOT. THAT SUM MAY BE INCOME OR INCOME HIDDEN OR OTHERWISE EMB EDDED THEREIN. THE SCHEME OF TAX DEDUCTION AT SOURCE APPLIES NOT ONLY TO THE AMOUNT PAID WHICH WHOLLY BEARS ' INCOME ' CHARACTER, BUT ALSO TO GROSS SUMS, THE WHOLE OF WHI CH MAY NOT BE INCOME OR PROFITS OF THE RECIPIENT. IN SOME CASES, A TRADING RECEIPT MAY CON TAIN A FRACTION OF A SUM AS TAXABLE INCOME. THE PURPOSE OF SUB-SEC. (1) OF SEC. 195 IS TO SEE T HAT ON THE SUM WHICH IS CHARGEABLE UNDER SEC, 4 OF THE ACT, FOR LEVY AND COLLECTION OF INCOM E-TAX, THE PAYER SHOULD DEDUCT INCOME-TAX THEREON AT THE RATES IN FORCE, IF THE AMOUNT IS TO BE PAID TO A NON-RESIDENT. INCOME-TAX ON SUCH SUM IS TO BE DEDUCTED AND IT IS THE STATUTORY OBLIG ATION OF THE PERSON RESPONSIBLE FOR PAYING SUCH ' SUM ' TO DEDUCT TAX THEREON BEFORE MAKING PAYMENT. [TRA NSMISSION CORPORATION OF A.P. LTD. VS. CIT (1999) 239 ITR 587 (SE)]. THE EXPRESSI ON ' ANY OTHER SUM CHARGEABLE UNDER THE PROVISIONS OF THIS ACT ' IN SEC. 195(1) OF THE INCOME TAX ACT, 1961, CONTE MPLATES NOT ONLY AMOUNTS, THE WHOLE OF WHICH IS TAXABLE WITHOUT DEDUCTION, BUT ALSO AMOUNTS OF A MIXED COMPOSITION, A PART OF WHICH ONLY MIGHT TURN OUT TO BE TAXABLE INCOME, AS WELL AS OTHER DISBURSEMENTS, WHICH ARE OF THE NATURE OF GROSS REV ENUE RECEIPTS, BUT ARE YET SUMS CHARGEABLE UNDER THE PROVISIONS OF THE ACT AND COME WITHIN THE AMBIT OF SEC. 195(1). THAT THE ONLY POINT TO BE CONSIDERED WAS WHETHER PA YMENT OF THE SUM TO THE NON-RESIDENT COMPANY WAS CHARGEABLE TO TAX UNDER THAT ACT. THE S UM MIGHT OR MIGHT NOT BE INCOME OR THERE MIGHT BE INCOME HIDDEN OR OTHERWISE EMBEDDED THEREIN. UNDER SEC. 195(1), THERE EXISTED A LEGAL OBLIGATION ON THE PART OF THE APPLI CANT ( INDIAN COMPANY ) TO WITHHOLD TAXES WHILE MAKING PAYMENT FOR THE SOFTWARE PURCHASED FRO M THE NON-RESIDENT COMPANY. [HEADSTART BUSINESS SOLUTIONS PVT LTD. (2006) 289 ITR 530(AAR) ]. THE TERM ' ANY OTHER SUM ' USED IN SEC. 195(1) DOES NOT NECESSARILY MEAN THE SUMS WHICH REPRESENT WHOLLY INCOME OR PROFITS. IN OTHER WORDS, IT CAN BE SAID THE PROVISION OF TAX ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 4 DEDUCTION AT SOURCE APPLIES NOT ONLY TO AMOUNTS PAI D WHICH WHOLLY BEARS ' INCOME' CHARACTER, BUT ALSO TO GROSS SUM THE WHOLE OF WHICH IS NOT INC OME OR PROFITS TO THE RECIPIENT. THUS SEC. 195 TAKES WITHIN ITS AMBIT ANY AMOUNT PAID TO A NON -RESIDENT WHICH DO NOT WHOLLY REPRESENT INCOME OR PROFITS CHARGEABLE UNDER THE ACT BUT A PO RTION OF WHICH ONLY SO REPRESENTS. PAYMENT MADE TO NON-RESIDENT AGAINST SUPPLY OF GOOD S IN REGULAR TRADE BY HIM IS ALSO COVERED UNDER SEC. 195, AS SEC. 195 COVERS SUMS PAI D TO NON-RESIDENT, WHETHER OR NOT SUCH SUMS REPRESENT WHOLLY INCOME OR PROFITS [CIT V. SUP ERINTENDING ENGINEERING (1985) 152 ITR 733 (AP)]. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, THE ASSESS EE IS FOUND TO HAVE FAILED TO WITHHOLD OF TAX FROM THE PAYMENT OF 1,72,38,405/- MADE TO NON-R ESIDENT. IN VIEW OF THE ABOVE, THE SAID PAYMENT OF RS.1,72,38,40S/- IS NOT ADMISSIBLE AND D ISALLOWED U/S. 40(A) OF THE I.T. ACT. THE A/R OF THE APPELLANT IN HIS SUBMISSION HAS SUBM ITTED THAT THE DISALLOWANCE OF RS.1,72,38,405/- BEING COMMISSION PAID TO NON-RESID ENTS, WHEN NO SERVICES WERE RENDERED IN INDIA AND PAYMENTS WERE MADE TO THEM IN FOREIGN CUR RENCY. THERE WERE APPOINTED LONG BACK FOR SALE OF PRODUCTS NOR ANY PART OF THE INCOME OF THE NON- RESIDENTS WAS TAXABLE IN INDIA. THE AGREEMENTS BETWEEN ASSESSEE COMPANY AND THE SELLING AGENTS OF THE ASSESSEE WHICH YOUR HONOUR WILL FIND THAT THE SERVICES WERE TO BE PROVI DED IN THEIR COUNTRY ITSELF AND THE PAYMENTS WERE TO BE MADE IN APPLICABLE FOREIGN CURRENCY. SUC H PAYMENTS WERE ACCEPTED IN THE PAST AND THE PROVISIONS OF SECTION 195(1) WAS ALSO NOT A PPLICABLE. THE TAX RESIDENTIAL CERTIFICATE OF THE VARIOUS COMMISSION AGENTS HAS BEEN ENCLOSED HER EWITH TO PROVE THAT THEY WERE THE TAX RESIDENTS OF FOREIGN COUNTRIES. SUCH PAYMENTS TO TH E SELLING AGENTS WERE MADE IN USD WHICH IS EVIDENT FROM THE BANK STATEMENTS OF THE ASSESSEE . REFERENCE IN THIS CONNECTION IS INVITED TO THE JUDGMENT OF THE SUPREME COURT OF INDIAN IN THE CASE OF GE INDIA TECHNOLOGY CEN. P LTD VS COMMR OF I. T. & ANR ON 09. SEPTEMBER 2010. IT C AN BE SEEN FROM THE COMPARATIVE CHART OF SALES VIS-A-VIS EXPORT SALES AND EXPORT COMMISSION PAID DURING THE YEAR. THE PRECEDING YEAR AND TWO SUCCEEDING YEARS THAT THE PERCENTAGE OF EXP ORT COMMISSION PAID WAS ALMOST SIMILAR TO THAT PAID IN THOSE YEARS. IT IS CLEAR FROM THE C HART OF THE EXPORT SALES AND COMMISSION PAID, THAT THE PAYMENTS MADE BY THE ASSESSEE AS COMMISSIO N WERE GENUINE AND WERE TO BE CREATE INCENTIVES TO INCREASE EXPORT SALES. ALSO, NO TDS W AS DEDUCED FOR THE ABOVE PAYMENTS BECAUSE THE SERVICES WERE ACCRUING IN ANOTHER COUNT RY AND PAYMENT WAS ALSO RECEIVED IN THE OTHER COUNTRY. THEREFORE, AS PER SECTION 9(1), THE AMOUNT IS TAXABLE IN INDIA ONLY, IF THE SERVICES ARE RENDERED IN INDIA. HOWEVER, THE SAID S ERVICES FOR WHICH COMMISSION IS PAID ARE RENDERED OUTSIDE INDIA AS COMMISSION IS PAID FOR IN CREASING THE EXPORT SALES OF THE ASSESSEE. THEREFORE, THE SAME SHALL BE TAXABLE IN THE FOREIGN COUNTRY IN WHICH THE SERVICES ARE PROVIDED. FURTHER SINCE NO INCOME WAS TAXABLE IN INDIA, THERE WAS NO NEED TO WITHHOLD TAX U/S 195(1). FURTHER, THE ASSESSMENT ORDER FOR THE A.Y. 2014-15 IS ENCLOSED HEREWITH FROM WHICH YOUR HONOUR WILL FIND THAT 'L0 ADDITION HAS BEEN MADE WI TH RESPECT TO THE ABOVE MATTER. THE AO HAS NOT FOLLOWED CONSISTENCY IN PRINCIPLES AND HAS MADE THE ADDITION ONLY ON SUSPICION & SURMISES WHICH IS NOT ALLOWED AS PER THE APEX COURT . I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED THE RELEVANT ASSESSMENT RECORDS. THE ASSESSMENT RECORDS WERE VERIFIED. THE APPELLANT HAS PAID COMMISSION AMOUNTING TO RS.1,72,38,405/- TO SELLING AGENTS ABR OAD TO PROMOTE SALE OF THE PRODUCTS. THE RELEVANT PORTION OF THE AGREEMENT ARE REPRODUCED AS FOLLOWS: 'THE AGENT SHALL AT ALL TIME USE THEIR UTMOST ENDEA VOURS TO PROMOTE THE SALE OF OUR PRODUCTS WITHIN THE TERRITORY. ALL ENQUIRIES FOR TH E PRODUCTS IN THE TERRITORY SHALL BE DIRECTED TO THE AGENT. THE AGENT WILL ATTEND TO ALL MATTERS RELATING OR ARISING OUT OF THE ENQUIRIES ON ADVICE FROM THE PRINCIPAL. THE AGENT S HALL AT ALL TIME MAKE ALL EFFORTS TO ENHANCE AND MAINTAIN THE REPUTATION AND THE GOODWIL L OF THE PRINCIPAL AND THEIR PRODUCTS. THE AGENT SHALL ALSO CONDUCT, AT THEIR OW N COST, MARKET SURVEYS FROM TIME TO TIME RELATING TO MARKETABILITY OF THE PRODUCTS IN T HE TERRITORY AND SHALL SUBMIT TO THE PRINCIPAL THE PERIODICAL REPORT ON SUCH SURVEY. THE AGENT SHALL RECEIVE A COMMISSION UPTO 10% BASED ON FOB VALUE AT THE PRODUCTS MADE TO CUSTOMERS IN THE TERRITORY WHERE L.C / PAYMENT H AS BEEN RECEIVED DIRECTLY FROM THE ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 5 CUSTOMER. THE COMMISSION SHALL BE REMITTED WITHIN T HREE MONTHS FROM THE DATE OF SHIPMENT & AFTER PHYSICALLY RECEIPT OF FULL PAYMENT IN OUR BAN K.' FROM READING THE AGREEMENT IT IS CLEAR THAT THE SEL LING AGENT IS RECEIVING COMMISSION ON PERCENTAGE BASIS FOR SELLING THE PRODUCTS OF THE AP PELLANT IN THE RESPECTIVE COUNTRIES. THE SERVICES WERE RENDERED OUT THE COUNTRY AND NO INCOM E ACCRUED OR AROSE IN INDIA AS PER THE PROVISIONS OF SECTION 9(1) OF THE I T ACT, 1961. SE CONDLY, THE COMMISSION PAYMENT WAS NOT RECEIVED OR DEEMED TO BE RECEIVED IN INDIA AS PER T HE PROVISIONS OF SECTION 5(1) OF THE ACT. THE SELLING AGENTS HAVE NO PERMANENT ESTABLISHMENT IN INDIA. IN THIS REGARD, REFERENCE IS MADE TO THE DECISIONS OF THE APEX COURT IN THE CASE OF GE INDIA TECHNOLOGY CENTRE PRIVATE LTD. VERSUS COMMISSIONER OF INCOME TAX & ANR. CIVIL APPEAL NOS.7541-7542 OF 2010 (ARISING OUT OF SLP(C) NO. 34306-34307 OF 2009) WHI CH HAS HELD THAT THE PROVISIONS RELATING TO DEDUCTION OF TAX APPLIES ONLY TO THOSE SUMS WHIC H ARE CHARGEABLE TO TAX UNDER THE INDIAN INCOME TAX ACT. THE RELEVANT PORTIONS OF THE JUDGEM ENT ARE REPRODUCED AS FOLLOWS: 'WE CANNOT READ SECTION 195, AS SUGGESTED BY THE DE PARTMENT, NAMELY, THAT THE MOMENT THERE IS REMITTANCE THE OBLIGATION TO DEDUCT TAS ARISES. IF WE WERE TO ACCEPT SUCH A CONTENTION IT WOULD MEAN THAT ON MERE PAYMEN T INCOME WOULD BE SAID TO ARISE OR ACCRUE IN INDIA. THEREFORE, AS STATED EARLIER, I F THE CONTENTION OF THE DEPARTMENT WAS ACCEPTED IT WOULD MEAN OBLITERATION OF THE EXPR ESSION ' SUM CHARGEABLE UNDER THE PROVISIONS OF THE ACT ' FROM SECTION 195(1). WHILE INTERPRETING A SECTION ONE HAS TO GIVE WEIGHTAGE TO EVERY WORD USED IN THAT SECTIO N. WHILE INTERPRETING THE PROVISIONS OF THE INCOME TAX ACT ONE CANNOT READ THE CHARGING SECTIONS OF THAT ACT DE HORS THE MACHINERY SECTIONS. THE ACT IS TO BE READ AS AN INT EGRATED CODE. SECTION 195 APPEARS IN CHAPTER XVII WHICH DEALS WITH COLLECTION AND RECOVERY. AS HELD IN THE CASE OF C.I.T. VS. ELI LILLY & CO. (INDIA) (P.) LTD. [ 312 ITR 225 ] THE PROVISIONS, FOR DEDUCTION OF TAS WHICH IS IN CHAPTER XVII DEALING WITH COLLEC TION OF TAXES AND THE CHARGING PROVISIONS OF THE I.T. ACT FORM ONE SINGLE INTEGRAL , INSEPARABLE CODE AND, THEREFORE, THE PROVISIONS RELATING TO TDS APPLIES ONLY TO THOS E SUMS WHICH ARE ' CHARGEABLE TO TAX ' UNDER THE I.T ACT. IT IS TRUE THAT THE JUDGMENT I N ELI LILIY (SUPRA) WAS CONFINED TO SECTION 192 OF THE IT. ACT. HOWEVER, THERE IS SOME SIMILARITY BETWEEN THE TWO. IF ONE LOOKS AT SECTION 192 ONE FINDS THAT IT IMPOSES STAT UTORY OBLIGATION ON THE PAYER TO DEDUCT TAS WHEN HE PAYS ANY INCOME ' CHARGEABLE UNDER THE HEAD SALARIES '. SIMILARLY, SECTION 195 IMPOSES A STATUTORY OBLIGATI ON ON ANY PERSON RESPONSIBLE FOR PAYING TO A NON-RESIDENT ANY SUM ' CHARGEABLE UNDER THE PROVISIONS OF THE ACT ', WHICH EXPRESSION, AS STATED ABOVE, DO NOT FIND PLAC E IN OTHER SECTIONS OF CHAPTER XVII. IT IS IN THIS SENSE THAT WE HOLD THAT THE IT. ACT CONSTITUTES ONE SINGLE INTEGRAL INSEPARABLE CODE. HENCE, THE PROVISIONS RELATING TO TDS APPLIES ONLY TO THOSE SUMS WHICH ARE CHARGEABLE TO TAX UNDER THE I.T. ACT. IF THE CONTENTION OF THE DEPARTMENT THAT ANY PERSON MAKING PAYMENT TO A NON- RESIDENT I S NECESSARILY REQUIRED TO DEDUCT TAS THEN THE CONSEQUENCE WOULD BE THAT THE DEPARTME NT WOULD BE ENTITLED TO APPROPRIATE THE MONEYS DEPOSITED BY THE PAYER EVEN IF THE SUM PAID IS NOT CHARGEABLE TO TAX BECAUSE THERE IS NO PROVISION IN THE IT ACT BY WHICH A PAYER CAN OBTAIN REFUND.' AFTER CAREFUL CONSIDERATION OF THE SUBMISSION OF TH E APPELLANT, PERUSAL OF ASSESSMENT RECORDS AND BINDING DECISIONS OF APEX COURT, THE DISALLOWAN CE OF RS.1,72,38,40S/- IS DELETED. THIS GROUND OF APPEAL SUCCEEDS AND IS THEREFORE, ALLOWED . 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO TH E REVENUES INSTANT FORMER GRIEVANCE. THERE IS NO DISPUTE ABOUT THE ASS ESSEE HAVING PAID THE IMPUGNED COMMISSION AMOUNT TO ITS OVERSEAS AGENTS W ITHOUT DEDUCTING TDS. THE REVENUE REITERATES THE ASSESSING OFFICERS FIND INGS THAT THE ASSESSEE OUGHT TO HAVE DEDUCTED TDS SINCE IT HAD NOT OBTAINE D ANY CERTIFICATE OF NON- ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 6 DEDUCTION FROM THE ASSESSING OFFICER AS REQUIRED U/ S 195(1) OF THE ACT. LEARNED DEPARTMENTAL REPRESENTATIVES CASE ACCORDIN GLY IS THAT SINCE THE ASSESSEES BUSINESS IS CARRIED FROM INDIA ONLY, THE ASSESSING OFFICER HAD RIGHTLY INVOKED SEC. 5(2)(B) R.W.S. 9(1) OF THE ACT AS IT WAS REQUIRED TO DEDUCT TDS. WE FIND NO MERIT IN REVENUES INSTANT FORMER G RIEVANCE. WE MAKE IT CLEAR THAT THE ASSESSEES OVERSEAS COMMISSION AGENT S HAVE NOT RENDERED ANY SERVICES IN INDIA SO AS TO BE TAXABLE IN INDIA. HON 'BLE APEX COURTS LANDMARK JUDGMENT IN GE INDIA TECHNOLOGY CENTRE PVT. LTD. VS. COMMISSION ER OF INCOME TAX & ANR. (SUPRA) MAKES IT CLEAR THAT THE IMPUGNED TDS PROVI SION APPLIES ONLY IN CASE THE RECIPIENT IS TAXABLE IN IN DIA. THERE IS NO INDICATION IN THE INSTANT CASE FILE THAT THE ASSESSEES OVERSEAS COMMISSION AGENTS ARE IN ANY WAY ASSESSABLE TO TAX IN INDIA NOR THEY HAVE RE NDERED THEIR SERVICES IN QUESTION IN INDIA. THIS TRIBUNALS CO-ORDINATE BENC HS DECISION IN ITA NO.48/RJT/2015 AND 249/AHD/2015 IN DCIT VS. WELSPUN CORPORATION LTD. DECIDED ON 03.01.2017 HAS DECLINED THE REVENUES ID ENTICAL ARGUMENTS VIDE FOLLOWING DETAILED DISCUSSION:- 30. AS REGARDS THE REMAINING CASES, IN CATEGORY (B ) AND IN CATEGORY (C) AS ALSO IN THE CASE OF JT-IRAN, THE PROVISIONS OF THE TAX TREATIES DO NOT COME TO THE RESCUE OF THE RECIPIENTS, AND, THEREFORE, THE TAXABILITY IN THESE CASES IS TO BE D ECIDED ON THE BASIS OF THE PROVISIONS IN THE DOMESTIC LAW. 31. THE SCHEME OF TAXABILITY IN INDIA, SO FAR AS TH E NON RESIDENTS, ARE CONCERNED, IS LIKE THIS. SECTION 5(2), WHICH DEALS WITH THE TAXABILITY OF IN COME IN THE HANDS OF A NON-RESIDENT, PROVIDES THAT THE TOTAL INCOME OF ANY PREVIOUS YEAR OF A PERSON W HO IS A NON-RESIDENT INCLUDES ALL INCOME FROM WHATEVER SOURCE DERIVED WHICH (A) IS RECEIVED OR IS DEEMED TO BE RECEIVED IN INDIA IN SUCH YEAR BY OR ON BEHALF OF S UCH PERSON; OR (B) ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE TO HIM IN INDIA DUR ING SUCH YEAR . THERE IS NO DISPUTE THAT SINCE NO PART OF THE OPERATIONS OF THE RECIPIENT NO N-RESIDENTS IS CARRIED OUT IN INDIA, NO INCOME ACCRUES TO THESE NON-RESIDENTS IN INDIA. THE CASE O F THE REVENUE HINGES ON INCOME WHICH IS DEEMED TO ACCRUE OR ARISE IN INDIA . COMING TO THE DEEMING PROVISIONS, WHICH ARE SET OUT IN SECTION 9, WE FIND THAT THE FOLLOWING STATUTORY PROVISIONS ARE RELEVANT IN THIS CONTEXT: SECTION 9- INCOMES DEEMED TO ACCRUE OR ARISE IN IND IA (1) THE FOLLOWING INCOMES WILL BE DEEMED TO ACCRUE OR ARISE IN INDIA: (I) ALL INCOME ACCRUING OR ARISING, WHETHER DIRECTL Y OR INDIRECTLY, THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA, OR THROUGH OR FROM AN Y PROPERTY IN INDIA, OR THROUGH OR FROM ANY ASSET OR SOURCE OF INCOME IN INDIA, EXPLANATION: FOR THE PURPOSE OF THIS CLAUSE [I.E. 9(1)(I)], (A) IN THE CASE OF A BUSINESS OF WHICH ALL THE OPER ATIONS ARE NOT CARRIED OUT IN INDIA, THE INCOME OF THE BUSINESS DEEMED UNDER THIS CLAUSE TO ACCRUE OR ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 7 ARISE IN INDIA SHALL BE ONLY SUCH PART OF THE INCOM E AS IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED OUT IN INDIA ; (B) (C) (D)..* (VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY- (A) ..* (B) A PERSON WHO IS A RESIDENT, EXCEPT WHERE THE FE ES ARE PAYABLE IN RESPECT OF SERVICES UTILISED IN A BUSINESS OR PROFESSION CA RRIED ON BY SUCH PERSON OUTSIDE INDIA OR FOR THE PURPOSES OF MAKING OR EARN ING ANY INCOME FROM ANY SOURCE OUTSIDE INDIA; OR (C) * EXPLANATION 1-.* EXPLANATION 2.- FOR THE PURPOSES OF THIS CLAUSE, ' FEES FOR TECHNICAL SERVICES ' MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERA TION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCL UDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER T HE HEAD' SALARIES '. * NOT RELEVANT FOR OUR PURPOSES 32. SO FAR AS DEEMING FICTION UNDER SECTION 9(1)(I) IS CONCERNED, IT CANNOT BE INVOKED IN THE PRESENT CASE SINCE NO PART OF THE OPERATIONS OF THE RECIPIENTS BUSINESS, AS COMMISSION AGENT, WAS CARRIED OUT IN INDIA. EVEN THOUGH DEEMING FICTI ON UNDER SECTION 9(1)(I) IS TRIGGERED ON THE FACTS OF THIS CASE, ON ACCOUNT OF COMMISSION AGENT S BUSINESS CONNECTION IN INDIA, IT HAS NO IMPACT ON TAXABILITY IN THE HANDS OF COMMISSION AGE NT BECAUSE ADMITTEDLY NO BUSINESS OPERATIONS WERE CARRIED OUT IN INDIA, AND, THEREFOR E EXPLANATION 1 TO SECTION 9(1)(I) COMES INTO PLAY. 33. THERE ARE A COUPLE OF RULINGS BY THE AUTHORITY FOR ADVANCE RULING, WHICH SUPPORT TAXABILITY OF COMMISSION PAID TO NON-RESIDENTS UNDER SECTION 9 (1)(I), BUT, NEITHER THESE RULINGS ARE BINDING PRECEDENTS FOR US NOR ARE WE PERSUADED BY T HE LINE OF REASONING ADOPTED IN THESE RULINGS. AS FOR THE AAR RULING IN THE CASE OF SKF B OILERS & DRIERS PVT LTD [(2012) 343 ITR 385 (AAR)], WE FIND THAT THIS DECISION MERELY FOLLOWS T HE EARLIER RULING IN THE CASE OF RAJIV MALHOTRA [(2006) 284 ITR 564] WHICH, IN OUR CONSIDERED VIEW, DOES NOT TAKE INTO ACCOUNT THE IMPACT OF EXPLANATION 1 TO SECTION 9(1)(I) PROPERLY. THAT WAS A CASE IN WHICH THE NON-RESIDENT COMMISSION AGENT WORKED FOR PROCURING PARTICIPATION BY OTHER NON-RESIDENT ENTITIES IN A FOOD AND WINE SHOW IN INDIA, AND THE CLAIM OF THE ASSESS EE WAS THAT SINCE THE AGENT HAS NOT CARRIED OUT ANY BUSINESS OPERATIONS IN INDIA, THE C OMMISSION AGENT WAS NOT CHARGEABLE TO TAX IN INDIA, AND, ACCORDINGLY, THE ASSESSEE HAD NO OBL IGATION TO DEDUCT TAX AT SOURCE FROM SUCH COMMISSION PAYMENTS TO THE NON-RESIDENT AGENT. ON T HESE FACTS, THE AUTHORITY FOR ADVANCE RULING, INTER ALIA, OPINED THAT NO DOUBT THE AGENT RENDERS SERVICES ABROAD AND PURS UES AND SOLICITS EXHIBITORS THERE IN THE TERRITORY ALLO TTED TO HIM, BUT THE RIGHT TO RECEIVE THE COMMISSION ARISES IN INDIA ONLY WHEN EXHIBITOR PART ICIPATES IN THE INDIA INTERNATIONAL FOOD & WINE SHOW (TO BE HELD IN INDIA), AND MAKES F ULL AND FINAL PAYMENT TO THE APPLICANT IN INDIA AND THAT THE COMMISSION INCOME WOULD, THEREFORE, BE TAXABLE UNDER SECTION 5(2)(B) READ WITH SECTION 9(1)(I) OF THE AC T. THE AUTHORITY FOR ADVANCE RULING ALSO HELD THAT THE FACT THAT THE AGENT RENDERS SERVICES ABROAD IN THE FORM OF PURSUING AND SOLICITING PARTICIPANTS AND THAT THE COMMISSION IS REMITTED TO HIM ABROAD ARE WHOLLY IRRELEVANT FOR THE PURPOSE OF DETERMINING SITUS OF HIS INCOME . WE DO NOT CONSIDER THIS APPROACH TO BE CORRECT. WHEN NO OPERATIONS OF THE B USINESS OF COMMISSION AGENT IS CARRIED ON IN INDIA, THE EXPLANATION 1 TO SECTION 9(1)(I) T AKES THE ENTIRE COMMISSION INCOME FROM OUTSIDE THE AMBIT OF DEEMING FICTION UNDER SECTION 9(1)(I), AND, IN EFFECT, OUTSIDE THE AMBIT OF INCOME DEEMED TO ACCRUE OR ARISE IN INDIA FOR THE PURPOSE OF SECTION 5(2)(B). THE POINT OF TIME WHEN COMMISSION AGENTS RIGHT TO RECEIVE THE C OMMISSION FRUCTIFIES IS IRRELEVANT TO DECIDE THE SCOPE OF EXPLANATION 1 TO SECTION 9(1)(I), WHIC H IS WHAT IS MATERIAL IN THE CONTEXT OF THE SITUATION THAT WE ARE IN SEISIN OF. THE REVENUES C ASE BEFORE US HINGES ON THE APPLICABILITY OF ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 8 SECTION 9(1)(I) AND, IT IS, THEREFORE IMPORTANT TO ASCERTAIN AS TO WHAT EXTENT WOULD THE RIGOUR OF SECTION 9(1)(I) BE RELAXED BY EXPLANATION 1 TO SECT ION 9(1)(I). WHEN WE EXAMINE THINGS FROM THIS PERSPECTIVE, THE INEVITABLE CONCLUSION IS THAT SINCE NO PART OF THE OPERATIONS OF THE BUSINESS OF THE COMMISSION AGENT IS CARRIED OUT IN INDIA, NO PART OF THE INCOME OF THE COMMISSION AGENT CAN BE BROUGHT TO TAX IN INDIA. IN THIS VIEW OF THE MATTER, VIEWS EXPRESSED BY THE HONBLE AAR, WHICH DO NOT FETTER OUR INDEPEN DENT OPINION ANYWAY IN VIEW OF ITS LIMITED BINDING FORCE UNDER S. 245S OF THE ACT, DO NOT IMPR ESS US, AND WE DECLINE TO BE GUIDED BY THE SAME. THE STAND OF THE REVENUE, HOWEVER, IS THAT TH ESE RULINGS, BEING FROM SUCH A HIGH QUASI- JUDICIAL FORUM, EVEN IF NOT BINDING, CANNOT SIMPLY BE BRUSHED ASIDE EITHER, AND THAT THESE RULINGS AT LEAST HAVE PERSUASIVE VALUE. WE HAVE NO QUARREL WITH THIS PROPOSITION. WE HAVE, WITH UTMOST CARE AND DEEPEST RESPECT, PERUSED THE A BOVE RULINGS RENDERED BY THE HONBLE AUTHORITY FOR ADVANCE RULING. WITH GREATEST RESPECT , BUT WITHOUT SLIGHTEST HESITATION, WE HUMBLY COME TO THE CONCLUSION THAT WE ARE NOT PERSU ADED BY THESE RULINGS 34. COMING TO SECTION 9(1)(VII)(B), THIS DEEMING FI CTION- WHICH IS FOUNDATIONAL BASIS FOR THE ACTION OF THE ASSESSING OFFICER, INTER ALIA, PROVID ES THAT THE INCOME BY WAY OF TECHNICAL SERVICES PAYABLE BY A PERSON RESIDENT IN INDIA, EXC EPT IN CERTAIN SITUATIONS- WHICH ARE NOT ATTRACTED IN THE PRESENT CASE ANYWAY, ARE DEEMED TO BE INCOME ACCRUING OR ARISING IN INDIA. EXPLANATION 2 TO SECTION 9(1)(VII) DEFINES FEES FO R TECHNICAL SERVICES AS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISIONS OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUC TION, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES [ RELEVANT PORTION HIGHLIGHTED BY UNDERLINING ]. 35. IN THE LIGHT OF THE ABOVE LEGAL POSITION, WHAT WE NEED TO DECIDE AT THE OUTSET IS WHETHER THE AMOUNTS PAID BY THE ASSESSEE TO THE NON-RESIDENT AG ENTS COULD BE TERMED AS CONSIDERATION FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL AND CONSULTANCY SERVICES . AS WE DO SO, IT IS USEFUL TO BEAR IN MIND THE FACT THAT EVEN GOING BY THE STAND OF THE ASSESSING OFFICER, AT BEST SERVICES RENDERED BY THE NON-RESIDENT TO THE AGENT INCLUDED TECHNICAL SERVICES BUT IT IS FOR THIS REASON THAT THE AMOUNTS PAID TO THESE AGENTS, ON AC COUNT OF COMMISSION ON EXPORTS, SHOULD BE TREATED AS FEES FOR TECHNICAL SERVICES. EVEN PRO CEEDING ON THE ASSUMPTION THAT THESE NON- RESIDENT AGENTS DID RENDER THE TECHNICAL SERVICES, WHICH, AS WE WILL SEE A LITTLE LATER, AN INCORRECT ASSUMPTION ANYWAY, WHAT IS IMPORTANT TO A PPRECIATE IS THAT THE AMOUNTS PAID BY THE ASSESSEE TO THESE AGENTS CONSTITUTED CONSIDERATION FOR THE ORDERS SECURED BY THE AGENTS AND NOT THE SERVICES ALLEGED RENDERED BY THE AGENTS. TH E EVENT TRIGGERING CRYSTALLIZATION OF LIABILITY OF THE ASSESSEE, UNDER THE COMMISSION AGENCY AGREEM ENT, IS THE EVENT OF SECURING ORDERS AND NOT THE RENDITION OF ALLEGED TECHNICAL SERVICES . IN A SITUATION IN WHICH THE AGENT DOES NOT RENDER ANY OF THE SERVICES BUT SECURES THE BUSINESS ANYWAY, THE AGENT IS ENTITLED TO HIS COMMISSION WHICH IS COMPUTED IN TERMS OF A PERCENTA GE OF THE VALUE OF THE ORDER. IN A REVERSE SITUATION, IN WHICH AN AGENT RENDERS ALL THE ALLEGE D TECHNICAL SERVICES BUT DOES NOT SECURE ANY ORDER FOR THE PRINCIPAL I.E. THE ASSESSEE, THE AGEN T IS NOT ENTITLED TO ANY COMMISSION. CLEARLY, THEREFORE, THE EVENT TRIGGERING THE EARNINGS BY THE AGENT IS SECURING THE BUSINESS AND NOT RENDITION OF ANY SERVICES. IN THIS VIEW OF THE MATT ER, IN OUR CONSIDERED VIEW, THE AMOUNTS PAID BY THE ASSESSEE TO ITS NON-RESIDENT AGENTS, EVEN IN THE EVENT OF HOLDING THAT THE AGENTS DID INDEED RENDER TECHNICAL SERVICES, CANNOT BE SAID TO BE CONSIDERATION FOR RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES ( EMPHASIS BY UNDERLINING SUPPLIED BY US ). THE SERVICES RENDERED BY THE AGENTS, EVEN IF THESE SERVICES ARE HELD TO BE IN THE NATURE OF TECHNICAL SERVICES, MAY BE TECHNICAL SERVICES, BUT THE AMOUNTS PAID BY THE ASSESSEE ARE NOT FOR THE RENDITION OF THESE TECHNICAL SERVICES NOR T HE QUANTIFICATION OF THESE AMOUNTS HAVE ANY RELATION WITH THE QUANTUM OF THESE TECHNICAL SERVIC ES. THE KEY TO TAXABILITY OF AN AMOUNT UNDER SECTION 9(1)(VII) IS THAT IT SHOULD CONSTITUTE CONSIDERATION FOR RENDITION OF TECHNICAL SERVICES. THE CASE OF THE REVENUE FAILS ON THIS SHORT TEST, A S IN THE PRESENT CASE THE AMOUNTS PAID BY THE ASSESSEE ARE CONSIDERATION FOR ORDERS SECURED BY THE ASSESSEE IRRESPECTIVE O F HOW AND WHETHER OR NOT THE AGENTS HAVE PERFORMED THE SO CALLED TECHNICAL SERVICES. 36. LET US SUM UP OUR DISCUSSIONS ON THIS PART OF T HE SCHEME OF SECTION 9, SO FAR AS TAX IMPLICATIONS ON COMMISSION AGENCY BUSINESS CARRIED OUT BY NON-RESIDENTS FOR INDIAN PRINCIPALS IS CONCERNED. IT DOES NOT NEED MUCH OF A CEREBRAL E XERCISE TO FIND OUT WHETHER THE INCOME ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 9 FROM THE BUSINESS CARRIED ON BY A NON-RESIDENT ASSE SSEE, AS A COMMISSION AGENT AND TO THE EXTENT IT CAN BE SAID TO DIRECTLY OR INDIRECTLY ACC RUING THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA, IS REQUIRED TO BE TAXED UNDER SECTION 9(1 )(I) OR UNDER SECTION 9(1)(VII), OF THE INCOME TAX ACT, 1961. THE ANSWER IS OBVIOUS. DEEMING FICTI ON UNDER SECTION 9(1)(I) READ WITH PROVISO THERETO, AS WE HAVE SEEN IN THE EARLIER DISCUSSIONS , HOLDS THE KEY, AND LAYS DOWN THAT ONLY TO THE EXTENT THAT WHICH THE OPERATIONS OF SUCH A BUSI NESS IS CARRIED OUT IN INDIA, THE INCOME FROM SUCH A BUSINESS IS TAXABLE IN INDIA. WHEN NO O PERATIONS OF THE BUSINESS ARE CARRIED ON INDIA, THERE IS NO TAXABILITY OF THE PROFITS OF SUC H A BUSINESS IN INDIA EITHER. THE QUESTION THEN ARISES WHETHER IN A SITUATION IN WHICH, IN THE COUR SE OF CARRYING ON SUCH BUSINESS, THE ASSESSEE HAS TO NECESSARILY RENDER CERTAIN SERVICES , WHICH ARE OF SUCH A NATURE AS COVERED BY EXPLANATION 2 TO SECTION 9(1)(VII), AND EVEN THO UGH THE ASSESSEE IS NOT PAID ANY FEES FOR SUCH SERVICES PER SE, ANY PART OF THE BUSINESS PROF ITS OF THE ASSESSEE CAN BE TREATED AS FEES FOR TECHNICAL SERVICES AND TAXED AS SUCH UNDER SECTION 9(1)(VII). THIS Q UESTION DOES NOT POSE MUCH DIFFICULTY EITHER. IN THE LIGHT OF THE DI SCUSSIONS IN THE FOREGOING PARAGRAPH, UNLESS THERE IS A SPECIFIC AND IDENTIFIABLE CONSIDERATION FOR THE RENDITION OF TECHNICAL SERVICES, TAXABILITY UNDER SECTION 9(1)(VII) DOES NOT GET TRI GGERED. THEREFORE, IRRESPECTIVE OF WHETHER ANY TECHNICAL SERVICES ARE RENDERED DURING THE COURSE O F CARRYING ON SUCH AGENCY COMMISSION BUSINESS ON BEHALF OF INDIAN PRINCIPAL, THE CONSIDE RATION FOR SECURING BUSINESS CANNOT BE TAXED UNDER SECTION 9(1)(VII) AT ALL. THIS PROFITS OF SUCH A BUSINESS CAN HAVE TAXABILITY IN INDIA ONLY TO THE EXTENT SUCH PROFITS RELATE TO THE BUSIN ESS OPERATIONS IN INDIA, BUT THEN, AS ARE THE ADMITTED FACTS OF THIS CASE, NO PART OF OPERATIONS OF BUSINESS WERE CARRIED OUT IN INDIA. THE COMMISSION AGENTS EMPLOYED BY THE ASSESSEE, THEREFO RE, DID NOT HAVE ANY TAX LIABILITY IN INDIA IN RESPECT OF THE COMMISSION AGENCY BUSINESS SO CAR RIED OUT. 37. ON A MORE FUNDAMENTAL NOTE, HOWEVER, IT IS ALSO A SETTLED LEGAL POSITION BY NOW THAT THE SERVICES OF THE NATURE RENDERED BY THESE COMMISSION AGENTS CANNOT ANYWAY BE TREATED AS FEES FOR TECHNICAL SERVICES ANYWAY. VIEWED THUS, EV EN THE DISCUSSION ON WHETHER THE AMOUNTS IN QUESTION COULD BE TREATED AS CONSIDERATION FOR TECHNICAL SERVICES, MAY BE RENDERED ACADEMIC IN EFFECT. LEARNED CIT(A) HAS VERY WELL SU MMARIZED THE JUDICIAL PRECEDENTS IN SUPPORT OF THIS LINE OF REASONING, AND, IN AN ERUDI TE AND EXTENDED DISCUSSION, DEALT WITH EACH LIMB OF THE DEFINITION OF TECHNICAL SERVICES. THESE FINDINGS ARE REPRODUCED BY US EARLIER IN THIS ORDER. WHILE, FOR THE SAKE OF BREVITY, WE NEED TO R EPEAT EACH OF THESE REASONS ANALYSED BY THE LEARNED CIT(A), SUFFICE TO SAY THAT WE APPROVE HIS WELL-REASONED FINDINGS AND LINE OF REASONING, AND WE WILL ALSO BRIEFLY TOUCH UPON THIS ASPECT OF THE MATTER. BEFORE WE DO SO, WE MAY TAKE NOTE OF SOME OF THE CLAUSES IN A TYPICAL C OMMISSION AGREEMENT ENTERED INTO BY THE ASSESSEE WITH ITS COMMISSION AGENTS. THE KEY PROVIS IONS IN THIS AGREEMENT, A COPY OF WHICH IS PLACED BEFORE US AT PAGES 103 TO 109 OF THE PAPE R BOOK, ARE AS FOLLOWS: ARTICLE 5 - AGENT'S OBLIGATION THE AGENT SHALL CARRY OUT AIL THE DUTIES NORMALLY R ENDERED BY AN AGENT INCLUDING BUT NOT LIMITED TO THE FOLLOWING: 5.1 TO ACT EXCLUSIVELY ON BEHALF OF THE PRINCIPAL A ND NOT SOURCE, PROCURE OR MARKET PRODUCTS OF SIMILAR TYPE MANUFACTURED BY COMPETITIV E COMPANIES WITHOUT PRIOR WRITTEN CONSENT OF THE PRINCIPAL. 5.2 TO USE ITS BEST ENDEAVORS AND FACILITIES TO DEV ELOP, EXPAND AND PROMOTE DILIGENTLY, THE SALE AND THE MARKET FOR THE PRODUCT S. THE AGENT WILL BE RESPONSIBLE OF MAKING THE NECESSARY MARKET PLANS AND ESTABLISH THE MARKETING NETWORK OF REPRESENTATIVES TO HELP PROMOTE WELSPUN PRODUCTS. 5.3 TO PROVIDE THE PRINCIPAL WITH INFORMATION SUCH AS MARKER DEVELOPMENTS, ACTIVITIES OF COMPETITORS, INTENTIONS AND PLANS OF CLIENTS TO THE MAXIMUM OF HIS KNOWLEDGE. 5.4 ENDEAVOR TO PROVIDE THE PRINCIPAL PROMPT ADVANC E INFORMATION REGARDING TENDERS. TO FORWARD TO THE PRINCIPAL TENDER DOCUMEN TS, INQUIRIES ETC, WITH FULL TECHNICAL SPECIFICATIONS WELL AHEAD - AS MUCH AS HE CAN - OF TENDER CLOSING. ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 10 5.5 THE AGENT ON BEHALF OF THE PRINCIPAL , WILL PURCHASE TENDER DOCUMENTS AND FORWARD THE SAME TO THE PRINCIPAL WELL AHEAD - AS M UCH AS HE CAN - OF TENDER CLOSING. THE COST OF PURCHASE OF SUCH TENDER DOCUME NTS SHALL BE REIMBURSED BY THE PRINCIPAL TO THE AGENT . 5.6 TO ASSIST FOR CLAIMS AND COMPLAINTS (IF SAY) TH AT MAY ARISE FROM THIRD PARTIES AND HELP TO REACH APPROPRIATE SETTLEMENT IN CLOSE CO-OR DINATION WITH THE PRINCIPAL . 5.7 THE AGENT WILL NOT ENTER INTO AGREEMENTS OR CONTRACTUAL OBLI GATIONS & CREATE ANY FINANCIAL LIABILITIES ON BEHALF OF THE PRINCIPAL , WITHOUT THE PRINCIPAL'S PRIOR WRITTEN CONSENT. 5.8 THE AGENT HEREBY NOMINATES MR. HOSSAM KAWASH AS THEIR CONTAC T POINT WHO WILL BE TOTALLY RESPONSIBLE FOR THE PRINCIPAL'S BUSINESS FOR CLARITY OF COMMUNICATION & EXPEDITIOUS ACTION. 5.9 TO ASSIST THE PRINCIPAL IN AIL POSSIBLE WAY, AS AND WHEN REQUESTED BY THE PRINCIPAL FOR THE FULFILLMENT OF ITS OBLIGATIONS, IN CASE OF A CONTRACT WITHIN THE TERRITORY . IT INCLUDES ASSISTING THE PRINCIPAL IN IDENTIFYING SUBCONTRACTORS LIKE LOGISTICS, SHIPPERS, CARGO HANDLING AGENCIES FOR SM OOTH EXECUTION OF SUCH CONTRACTS. 5.9A TO SEND THE PRINCIPAL PERIODIC REPORTS ON BUSI NESS ACTIVITY. 5.9B TO KEEP THE PRINCIPAL CONTINUOUSLY APPRISES OF ALL RELEVANT POLITICAL/ ECONOMIC CHANGES WHICH WOULD AFFECT TIE BUSINESS, 5.9C TO UNDERTAKE NOT TO DIVULGE SALES DOCUMENTS, C ATALOGUES, PRICES ETC. TO COMPETITORS AND THEIR AGENTS AND ASSOCIATES. ARTICLE 7 PRINCIPALS OBLIGATIONS DURING THE CONTINUANCE OF THIS AGREEMENT THE PRINCI PAL AGREES : 7.1 TO GIVE THE AGENT FULL SUPPORT FOR PROMOTING AND CREATING MARKET FOR THE PRODUCTS OF THE PRINCIPAL IN THE TERRITORY. 7.2 TO INFORM THE AGENT ON RECEIPT OF AN INQUIRY FROM THE TERRITORY REQUIRING DIRECT SUPPLY. 7.3 THE AGENT SHALL BE ENTITLED TO COMMISSION AS AGREED UPON IN THE CONTRACT. 7.4 TO TAKE INTO CONSIDERATION THE RECOMMENDATIONS MADE BY THE AGENT WHILE MAKING THE OFFER. 7.5 TO PROVIDE ALL INFORMATIVE DATA, CATALOGUES AND TECHNICAL MATERIAL (ALL IN THE ENGLISH LANGUAGE) REGARDING THE PRINCIPALS PRODUCT S AND ACTIVITIES AND KEEP THE AGENT INFORMED ABOUT ALL RELEVANT CHARGES. 7.6 TO OFFER COMPETITIVE PRICES AS FAR AS POSSIBLE TO ENABLE THE SALE OF THE PRODUCTS AS THE AGENT IS ONLY ENTITLED FOR COMMISSIONS AND NOT FIXED SALARY ON HIS WORK. 7.7 THE PRINCIPAL NOMINATES MR. RANJIT LALA AS THE CONTACT PERSON WITH THE AGENT FOR ALL CORRESPONDENCES AND COMMUNICATIONS. ARTICLE 9 - TERMINATION . 9.1 THIS AGREEMENT SHALL REMAIN VALID FOR A PERIOD OF ONE YEAR FROM THE DATE OF SIGNING. THE SAID AGREEMENT CAN ALSO BE TERMINATED BY EITHER PARTY ANYTIME GIVING NOTICE TO THE OTHER PARTY OF AT LEAST 90 DAYS IN AD VANCE BY FAX AND FOLLOWED BY ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 11 REGISTERED LETTER STATING REASONS FOR THE TERMINATI ON. THE AGREEMENT CAN BE REINSTATED FOR A FURTHER PERIOD OF TWO YEARS BASED ON MUTUAL A GREEMENT AND THEN AFTER ITS TERMINATION ANOTHER PERIOD OF FIVE YEARS. 9.2 IN THE EVENT OF THE TERMINATION, THE AGENT WILL FURNISH ALL THE RELEVANT INFORMATION TO THE PRINCIPAL AND WILL BE RESPONSIBLE FOR REALIZATION OF PAYMENT S OUTSTANDING TILL DATE WITHIN THE TERRITORY. ALSO THE AGENT SHALL RETURN ALL THE CUSTOMERS RECORDS AND OTHER DATA RELATING TO THE COMPANY'S BUSINESS O R SERVICES WHICH MAY BE IN HIS POSSESSION. 9.3 IN THE EVENT OF TERMINATION, IF ANY CONTRACT IS CONCLUDED AFTER THE TERMINATION DATE, BUT THE EXERCISE HAS COMMENCED PRIOR TO THE TERMINA TION DATE, THE AGENT IS ENTITLED FOR THE APPLICABLE COMMISSIONS. SALES COMMISSION FOR THE SONATRACH GK3 PROJECT WELSPUN WILL PAY GLOBAL SYNERGY INTERNATIONAL LTD. IN ITS CAPACITY AS AGENT FOR WELSPUN A SALES COMMISSION, BASED ON THE FOB MILL SALES PRICE FOR THE GK 3 PROJECT EQUAL TO: I) 2% OF THE FOB MILL VALUE IN U.S. DOLLARS FOR THE ORDERED QUANTITY. ALL SALES COMMISSIONS SHALL BE PAID IN U.S. DOLLARS TO THE BA NK ACCOUNT TO BE ADVISED BY GLOBAL SYNERGY, DETAILS OF WHICH WILL BE PROVIDE D BY THE AGENT. THE SALES COMMISSION SHALL BE PAYABLE BY WELSPUN TO GLO BAL SYNERGY INTERNATIONAL LTD. AS INTERIM PAYMENTS ON PRORATE B ASIS AFTER REALIZATION OF THE PAYMENTS RECEIVED BY THE PRINCIPAL WITHIN A REASONABLE TIME BUT NOT EXCEEDING 30 DAYS FROM RECEIPT OF PAYMENT BY THE PR INCIPAL. SALES COMMISSION FOR THE SONATRACH GK3 PROJECT BY THE VIRTUE OF THIS ADDENDUM, WELSPUN AGREE TO PAY GLOBAL SYNERGY INTERNATIONAL LTD. , IN ITS CAPACITY AS AGENT FOR WELSPUN , A SALES COMMISSION, BASED ON THE FOB MILL SALES PRICE FOR THE GK 3 PROJ ECT EQUAL TO: I) 4.10% OF THE FOB MILL VALUE IN U.S. DOLLAR FOR T HE QUANTITY SHIPPED IS LAST (18) SHIPMENT. A) GLOBAL SYNERGY INTERNATIONAL LTD AGREES TO UNCONDITIONALLY TO FULFILL THE SCOPE SET THEREIN BY THE VIRTUE OF THIS ADDENDUM. B) THIS COMMISSION IS OVER THE ABOVE THE COMMISSION PAYABLE BY WELSPUN TO GLOBAL SYNERGY AS SPECIFIED IN ANNEXURE-1 OF AGENCY AGREEMENT DATED 29TH DAY OF JUNE, 2008. ALL SALES COMMISSION SHALL BE PAID IN U.S. DOLLARS TO THE BANK ACCOUNT TO BE ADVISED BY GLOBAL SYNERGY , DETAILS OF WHICH ARE AVAILABLE WITH WELSPUN . UNLESS OTHERWISE AGREED, THE SALES COMMISSION SHALL BE PAY ABLE BY WELSPUN TO GLOBAL SYNERGY INTERNATIONAL LTD ., AS INTERIM PAYMENTS ON PRORATE BASIS AFTER REALIZATION OF THE PAYMENTS RECEIVED BY THE PRINCIPAL WITHIN A REASONABLE TIME BUT NOT EXCEEDING 30 DAYS FROM RECEIPT OF PAYMENT BY WELSPUN . 38. AS IS CLEAR FROM THE ABOVE PROVISIONS OF THE AG REEMENT, THE WORK THAT THE AGENT HAS TO DONE UNDER THIS AGREEMENT, AS IS STATED UNAMBIGUOUS LY IN THE AGREEMENT ITSELF, IS TO CARRY OUT AIL THE DUTIES NORMALLY RENDERED BY AN AGENT INCLUDING BUT NOT LIMITED TO THE ACTIVITIES SPECIFIED THEREIN. THE CONSIDERATION FOR WHICH THE PAYMENT MADE TO THE COMMISSION AGENT IS OBTAINING OF THE ORDERS AND NOT ANY SERVICES PER SE . THE CONSIDERATION IS COMPUTED ON THE BASIS OF BUSINESS PROCURED. OBVIOUSLY, IF THERE ARE NO BUSINESS GENERATED FOR THE PRINCIPAL, THE AGENT GETS NOTHING. QUITE CLEARLY, WHAT IS DONE BY THE AGENT IS NOT A RENDITION OF SERVICE BUT PURE ENTREPRENEURIAL ACTIVITY. THE WORK ACTUALL Y UNDERTAKEN BY THE AGENT IS THE WORK OF ACTING AS AGENT AND SO PROCURING BUSINESS FOR THE A SSESSEE BUT AS THE CONTEMPORARY BUSINESS MODELS REQUIRE THE WORK OF AGENT CANNOT SI MPLY AND ONLY BE TO OBTAIN THE ORDERS FOR ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 12 THE PRODUCT, AS THIS OBTAINING OF ORDERS IS INVARIA BLY PRECEDED BY AND FOLLOWED BY SEVERAL PREPARATORY AND FOLLOW UP ACTIVITIES. THE DESCRIPTI ON OF AGENTS OBLIGATION SETS OUT SUCH COMMON ANCILLARY ACTIVITIES AS WELL BUT THAT DOES N OT OVERRIDE, OR RELEGATE, THE CORE AGENCY WORK. THE CONSIDERATION PAID TO THE AGENT IS ALSO B ASED ON THE BUSINESS PROCURED AND THE AGENCY AGREEMENTS DO NOT PROVIDE FOR ANY INDEPENDEN T, STANDALONE OR SPECIFIC CONSIDERATION FOR THESE SERVICES. THE SERVICES RENDERED UNDER THE AGREEMENT CANNOT, THEREFORE, BE CONSIDERED TO BE TECHNICAL SERVICES IN NATURE OR CH ARACTER. THE SERVICES RENDERED IN THE COURSE OF RENDERING AGENCY SERVICES ARE ESSENTIALLY BUSINESS SERVICES AND TO OBTAIN THE BUSINESS. WE HAVE ALSO NOTED THAT, SO FAR AS RENDIT ION OF TECHNICAL SERVICES IS CONCERNED, ONE OF THE MAIN POINTS IN THE CASE OF THE REVENUE, AS E VIDENT FROM A PLAIN READING OF THE IMPUGNED ORDER UNDER SECTION 201, IS THAT MANUFACTURING OF SPECIALIZED PIPE WAS A HIGHLY TECH NICAL ACTIVITY INVOLVING VERY COMPLEX TECHNICAL EXERCISE OF TECHNOLOGY AND SKILLED LABOUR AND FINEST GRADE OF RAW MATERIAL AND THAT OBVIOUSLY, TO PROCURE THE ORDERS, THE ASSESSEE COMPANY WILL NEED SPECIALIST AGENTS WHO CAN UNDERST AND THE NITTY GRITTY OF THE ASSESSEES BUSINESS AND CAN DEMONSTRATE THE ASSESSE ES BUSINESS PROFILE AND QUALITY OF PRODUCTS OF THE ASSESSEE TO THE POTENTIAL CLIENT S TO CONVINCE THEM TO ENTER INTO A CONTRACT WITH THE ASSESSEE COMPANY . JUST BECAUSE A PRODUCT IS HIGHLY TECHNICAL DOES NOT CHANGE THE CHARACTER OF ACTIVITY OF THE SALE AGENT. WHETHER A SALESMAN SELLS A HANDCRAFTED SOUVENIR OR A TOP OF THE LINE LAPTOP, HE IS SELLING NEVERTHELESS. IT WILL BE ABSURD TO SUGGEST THAT IN THE FORMER CASE, HE IS SELLING AND THE LATTER, H E WILL BE RENDERING TECHNICAL SERVICES. THE OBJECT OF THE SALESMAN IS TO SELL AND FAMILIARITY W ITH THE TECHNICAL DETAILS, WHATEVER BE THE WORTH OF THOSE TECHNICAL DETAILS, IS ONLY TOWARDS T HE END OF SELLING. IN A TECHNOLOGY DRIVEN WORLD THAT WE LIVE IN, EVEN SIMPLEST OF DAY TO DAY GADGETS THAT WE USE ARE FAIRLY TECHNICAL AND COMPLEX. UNDOUBTEDLY WHEN A TECHNICAL PRODUCT IS BE ING SOLD, THE PERSON SELLING THE PRODUCT SHOULD BE FAMILIAR WITH TECHNICAL SPECIFICATIONS OF THE PRODUCT BUT THEN THIS ASPECT OF THE MATTER DOES NOT ANYWAY CHANGE THE ECONOMIC ACTIVITY . NOTHING, THEREFORE, TURNS ON THE DETAILS OF THE PRODUCTS BEING TECHNICAL. IT WAS ALSO NOTED THAT BY THE ASSESSING OFFICER THAT IT IS A VERY TECHNICAL EXERCISE TO OBTAIN THE CONTRACTS SIN CE IT INVOLVES COMPLEX PROCESS REQUIRING ELABORATE DISCUSSION, TECHNICAL EXPERTISE AND PRESENT OF COMPLEX TECHNICAL PRESENTATION, ON BEHALF OF THE ASSESSEE, WHICH CAN ONLY BE DONE BY A SPECIALIST IN THIS FIELD SO AS TO CONVINCE THE CLIENTS ABOUT WELSPUNS SUITABILITY TO THE CONTRACT . THIS AT BEST SIGNIFIES COMPLEXITY IN THE BUSINESSES AND THE NEED OF TECHNICAL INPUTS IN THE PROCESS OF BUSINESSES, PARTICULARLY WHEN THE PRODUCTS BEING DE ALT WITH ARE TECHNICAL PRODUCTS, BUT THEN MERELY BECAUSE TECHNICAL INPUTS ARE NEEDED IN CARRY ING OUT BUSINESS ACTIVITY, IT DOES NOT BECOME A TECHNICAL SERVICE RATHER THAN A BUSINESS A CTIVITY. AT THE COST OF REPETITION, WE MUST EMPHASIZE THE IMPORTANT DISTINCTION BETWEEN A BUSIN ESS ACTIVITY, REQUIRING UNDERSTANDING OF RELATED TECHNOLOGY, AND RENDITION OF TECHNICAL SERV ICES SIMPLICTOR. IN ANY CASE, WHAT HAS BEEN DESCRIBED AS A TECHNICAL SERVICE IS THE SERVICE BEI NG RENDERED TO THE BUYER BUT THE PAYMENT RECEIVED BY THE COMMISSION AGENTS IS NOT FOR THIS S ERVICE PER SE BUT FOR GENERATING BUSINESS ORDERS FOR THE ASSESSEE. GENERATING BUSINESS OR SEC URING ORDERS IS AN ENTREPRENEURIAL ACTIVITY AND CANNOT, BY ANY STRETCH OF LOGIC, BE TREATED AS A TECHNICAL SERVICE PER SE. THE SAME IS THE POSITION WITH REGARD TO ASSISTANCE WITH RESPECT OF LOGISTICS, SUCH AS SHIPPING AND HANDLING SERVICES, WITH RESPECT TO SALE FORECASTING, WITH RE SPECT TO GATHERING INFORMATION ON MARKETS, BUSINESS ENVIRONMENT AND ON SPECIFIC BUYERS AND WIT H RESPECT TO DEVELOPMENT OF SALES NETWORK. ALL THESE SERVICES ARE ESSENTIALLY INTEGRA L PART OF, AND ARE THUS AIMED AT, DEVELOPING BUSINESS FOR THE ASSESSEE AND SECURING ORDERS FOR T HE ASSESSEE FROM THE RIGHT PERSONS. NEITHER THESE SERVICES CAN BE VIEWED ON A STANDALON E BASIS DIVORCED FROM THE ECONOMIC ACTIVITY OF SECURING ORDERS, NOR ANY PAYMENT CAN BE SAID TO BE FOR RENDITION OF THESE SERVICES INASMUCH AS IT IS NOT THE RENDITION OF THESE SERVIC ES BUT SECURING BUSINESS OF THE ASSESSEE WHICH TRIGGERS THE INCOME ACCRUING TO THE NON-RESID ENT AGENTS OF THE ASSESSEE AND IT IS SECURING OF BUSINESS FOR THE ASSESSEE WHICH IS THE PROXIMATE CAUSE OF THE INCOME ACCRUING TO THE ASSESSEE. THIS ISSUE IS ALSO COVERED, IN FAVOUR OF THE ASSESSEE, BY A COORDINATE BENCH DECISION IN THE CASE OF DCIT VS TROIKAA PHARMACEUTI CALS LTD AND VICE VERSA ( ITA NO. 2028/ AHD/13 AND CO NO 13/AHD/14 ) WHEREIN IT HAS BEEN, INTER ALIA, OBSERVED AS FOLL OWS: 5. AS REGARDS THE REFERENCES TO SECTION 9(1)(VII), AS MADE BY THE ASSESSING OFFICER AND THE LEARNED DEPARTMENTAL REPRESENTATIVE, WE FIN D THAT ASPECT OF THE MATTER IS ALSO COVERED, IN FAVOUR OF THE ASSESSEE, BY A LARGE NUMBER OF JUDICIAL PRECEDENTS- INCLUDING HONBLE MADRAS HIGH COURTS JUDGMENT IN T HE CASE OF CIT VS FARIDA LEATHER ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 13 CO. [(2016) 66 TAXMANN.COM 321 (MADRAS)], WHEREIN T HEIR LORDSHIPS HAVE, INTER ALIA, OBSERVED AS FOLLOWS: 5. THE MAIN CONTENTION OF THE LEARNED COUNSEL FOR T HE ASSESSEE / RESPONDENT IS THAT THE AGENCY COMMISSION / SALES COMMISSION PA ID BY THE ASSESSEE TO NON-RESIDENT AGENTS, FOR THE SERVICES RENDERED BY T HEM, OUTSIDE INDIA, IN PROCURING EXPORT ORDERS FOR THE ASSESSEE, WOULD NOT ATTRACT OR PARTAKE THE CHARACTER OF ' FEES FOR TECHNICAL SERVICES ' AS EXPLAINED IN THE CONTEXT OF 9 (1) (VII) OF THE ACT AND THEREFORE, THERE IS NO SCOPE F OR THE APPLICATION OF THE PROVISIONS OF SECTION 195 OF THE ACT ( TAX DEDUCTED AT SOURCE ). IT IS ALSO CONTENDED THAT AS THE NON-RESIDENT AGENTS HAVE NEIT HER BUSINESS CONNECTION IN INDIA NOR THEY HAVE PERMANENT ESTABLISHMENT IN I NDIA, THEY ARE LIABLE TO BE TAXED IN INDIA. 5.1 YET ANOTHER CONTENTION OF THE LEARNED COUNSEL F OR THE ASSESSEE IS THAT: (A) THE ASSESSEE PAID THE AMOUNT BY WAY OF COMMISSI ON TO FOREIGN AGENTS FOR THE SERVICES RENDERED OUTSIDE INDIA; (B) THE TAX DEDUCTION AT SOURCE (TDS) IS REQUIRED T O BE MADE ON ALL PAYMENTS TO NON-RESIDENTS, ONLY IF SUCH PAYMENTS AR E LIABLE TO BE TAXED IN INDIA. (C) FOLLOWING THE DECISION OF THIS COURT, CI T V. FAIZAN SHOES (P.) LTD. [2014] 367 ITR 155/226 TAXMAN 115/48 TAXMANN.COM 48 (MAD.), THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE, WHE N THE NON-RESIDENT AGENT PROVIDES SERVICES OUTSIDE INDIA ON PAYMENT OF COMMI SSION. 5.2 THE CONTENTION OF THE REVENUE IS THAT SUCH SERV ICES ARE ATTRACTED BY EXPLANATION (2) TO SECTION 9 (1) (VII) OF THE ACT A ND THEREFORE TDS CERTIFICATE IS ESSENTIAL. 6. WHETHER THIS CONTENTION IS CORRECT, IS THE ISSU E TO BE DECIDED. 7. IN ORDER TO APPRECIATE THIS CONTENTION, IT IS NE CESSARY TO CONSIDER THE RELEVANT PROVISIONS OF THE ACT: (I) SECTION 40(A)(I) OF THE ACT : ' SECTION 40 - AMOUNTS NOT DEDUCTIBLE: NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTIONS 30 TO 38, THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTING THE INCO ME CHARGEABLE UNDER THE HEAD ' PROFITS AND GAINS OF BUSINESS OR PROFESSION ', (A) IN THE CASE OF ANY ASSESSEE (I) ANY INTEREST (NOT BEING INTEREST ON A LOAN ISSU ED FOR PUBLIC SUBSCRIPTION BEFORE THE 1ST DAY OF APRIL, 1938), RO YALTY, FEES FOR TECHNICAL SERVICES OR OTHER SUM CHARGEABLE UNDER TH IS ACT, WHICH IS PAYABLE, (A) OUTSIDE INDIA; OR (B) IN INDIA TO A NON-RESIDENT, NOT BEING A COMPANY OR TO A FOREIGN COMPANY, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVIIB AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 13 9: PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDUCTED DURING THE PR EVIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 13 9, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS Y EAR IN WHICH SUCH TAX HAS BEEN PAID. ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 14 EXPLANATION : FOR THE PURPOSES OF THIS SUB-CLAUSE, (A) ' ROYALTY ' SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 T O CLAUSE (VI) OF SUB- SECTION (1) OF SECTION 9: (B) ' FEES FOR TECHNICAL SERVICES ' SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9: (IA) THIRTY PER CENT OF ANY SUM PAYABLE TO A RESIDE NT, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVIIB AND SUCH T AX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUBSECTION (1) OF SECTION 139. PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDUCTED DURING THE PR EVIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIED IN SUB SECTION (1) OF SECTION 13 9 THIRTY PER CENT OF, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME O F THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO DE DUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XV II-B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB-SECTION (1) OF SECTION 201, THEN, FOR THE PURPOSE OF THIS SUB-CLAU SE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. (II) EXPLANATION 2 TO SECTION 195(1) OF THE ACT : ' SECTION 195 - OTHER SUMS: (1) ANY PERSON RESPONSIBLE FOR PAYIN G TO A NON-RESIDENT NOT BEING A COMPANY, OR TO A FOREIGN COMPANY, ANY I NTEREST ( NOT BEING INTEREST REFERRED TO IN SECTION 194LB OR SECTION 194LC ) OR SECTION 194LD OR ANY OTHER SUM CHARGEABLE UNDER THE PROVISIONS OF THIS ACT (NOT BE ING INCOME CHARGEABLE UNDER THE HEAD ' SALARIES ') SHALL, AT THE TIME OF CREDIT OF SUCH INCOME TO T HE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT INC OME-TAX THEREON AT THE RATES IN FORCE : PROVIDED THAT IN THE CASE OF INTEREST PAYABLE BY TH E GOVERNMENT OR A PUBLIC SECTOR BANK WITHIN THE MEANING OF CLAUSE (23D) OF SECTION 10 OR A PUBLIC FINANCIAL INSTITUTION WITHIN THE MEANING OF THAT CLAUSE, DEDUCTION OF TAX SHALL BE MADE ONLY AT THE TIME OF PAYMENT THEREOF IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE : PROVIDED FURTHER THAT NO SUCH DEDUCTION SHALL BE MA DE IN RESPECT OF ANY DIVIDENDS REFERRED TO IN SECTION 115-O. [ EXPLANATION 1 ] :............... [ EXPLANATION 2 .- FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIE D THAT THE OBLIGATION TO COMPLY WITH SUB-SECTION (1) AND TO MAKE DEDUCTION T HEREUNDER APPLIES AND SHALL BE DEEMED TO HAVE ALWAYS APPLIED AND EXTENDS AND SHALL BE DEEMED TO HAVE ALWAYS EXTENDED TO ALL PERSONS, RESIDENT OR NON-RESIDENT, WHETHER OR NOT THE NON-RESIDENT PERSON HAS (I) A RESIDENCE OR PLACE OF BUSINESS OR BUSINESS CO NNECTION IN INDIA; OR (II) ANY OTHER PRESENCE IN ANY MANNER WHATSOEVER IN INDIA.' EXPLANATION 4 TO SECTION 9 (1) (I) OF THE ACT: ' SECTION 9 - INCOME DEEMED TO ACCRUE OR ARISE IN INDIA ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 15 (1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA: (I) ALL INCOME ACCRUING OR ARISING, WHETHER DIRECTLY OR INDIRECTLY , THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA, OR THROUGH OR FROM ANY PROPERT Y IN INDIA, OR THROUGH OR FROM ANY ASSET OR SOURCE OF INCOME IN INDIA, OR THROUGH THE TRANSFER OF A CAPITAL ASSET SITUATE IN INDIA. ** ** ** EXPLANATION 4 .- FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIE D THAT THE EXPRESSION ' THROUGH ' SHALL MEAN AND INCLUDE AND SHALL BE DEEMED TO HAV E ALWAYS MEANT AND INCLUDED '' BY MEANS OF ', ' IN CONSEQUENCE OF ' OR ' BY REASON OF '. 7.1 SECTION 40 OF THE ACT SPELLS OUT WHAT AMOUNTS A RE NOT DEDUCTIBLE FROM THE INCOME CHARGED TO TAX UNDER THE PROFITS AND GAINS OF BUSIN ESS OR PROFESSION. 7.2 SECTION 40(A)(I) OF THE ACT DEALS WITH INTEREST AND OTHER SUMS PAYABLE OUTSIDE INDIA. THE PROVISIONS OF THIS SUB-CLAUSE MADE APPLI CABLE TO INTEREST HAVE BEEN EXTENDED TO PAYMENT OF ROYALTY, TECHNICAL FEES AND ANY OTHER SUM CHARGEABLE UNDER THIS ACT. THE SECTION PROVIDES THAT THE SUMS COVERE D BY THE SUB-CLAUSE, WHICH ARE CHARGEABLE UNDER THE ACT AND ARE PAYABLE OUTSIDE IN DIA, SHALL NOT BE ALLOWED AS AN EXPENDITURE TO THE ASSESSEE, UNLESS TAX IS PAID THE REON OR IS DEDUCTED THEREFROM UNDER CHAPTER XVII-B OF THE ACT. 7.3 SECTION 195(1) OF THE ACT DEALS WITH DEDUCTION OF TAX FROM PAYMENT TO NON- RESIDENTS AND FOREIGN COMPANIES. SECTION 195(1) OF THE ACT COMES INTO PLAY AT A STAGE WHERE THE PAYER, WHO IS ENJOINED TO DEDUCT THE TAX, EITHER CREDIT SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR MAKE PAYMENT THEREOF, WHETH ER IN CASH / CHEQUE / DRAFT OR ANY OTHER MODE. THE TAXABILITY OF SUCH AMOUNT IN TH E HANDS OF THE PAYEE OR OCCASIONING OF THE TAXABLE EVENT IS ALIEN FOR THE P URPOSE OF SECTION 195(1) OF THE ACT. 7.4 SECTION 195(2) IS AN ENABLING PROVISION, ENABLI NG AN ASSESSEE TO FILE AN APPLICATION BEFORE THE ASSESSING OFFICER TO DETERMI NE THE APPROPRIATE PROPORTION OF THE SUM CHARGEABLE AND UPON SUCH DETERMINATION, THE TAX HAS TO BE DEDUCTED UNDER SECTION 195(1) OF THE ACT. THE PAYMENT IS MADE CRED ITED TO THE ACCOUNT OF THE PAYEE. 8. THE QUESTION NOW IS, WHETHER THE ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE AS CONTEMPLATED UNDER SECTION 195 OF THE ACT, WHEN THE ASSESSEE PAID COMMISSION TO FOREIGN AGENT. 9. THIS QUESTION HAS BEEN ANSWERED BY THE HON 'BLE SUPREME COURT, IN THE CASE OF G.E.INDIA TECHNOLOGY CENTRE (P.) LTD. (SUPRA), IN W HICH, IT IS VERY CATEGORICALLY HELD THAT THE TAX DEDUCTED AT SOURCE OBLIGATIONS UNDER S ECTION 195(1) OF THE ACT ARISES, ONLY IF THE PAYMENT IS CHARGEABLE TO TAX IN THE HAN DS OF THE NON-RESIDENT RECIPIENT. 9.1 THEREFORE, MERELY BECAUSE A PERSON HAS NOT DEDU CTED TAX AT SOURCE OR A REMITTANCE ABROAD, IT CANNOT BE INFERRED THAT THE P ERSON MAKING THE REMITTANCE, NAMELY, THE ASSESSEE, IN THE INSTANT CASE, HAS COMM ITTED A DEFAULT IN DISCHARGING HIS TAX WITHHOLDING OBLIGATIONS BECAUSE SUCH OBLIGATION S COME INTO EXISTENCE ONLY WHEN THE RECIPIENT HAS A TAX LIABILITY IN INDIA. 9.2 THE UNDERLYING PRINCIPLE IS THAT, THE TAX WITHH OLDING LIABILITY OF THE PAYER IS INHERENTLY A VICARIOUS LIABILITY ON BEHALF OF THE R ECIPIENT AND THEREFORE, WHEN THE RECIPIENT / FOREIGN AGENT DOES NOT HAVE THE PRIMARY LIABILITY TO BE TAXED IN RESPECT OF INCOME EMBEDDED IN THE RECEIPT, THE VICARIOUS LIABI LITY OF THE PAYER TO DEDUCT TAX DOES NOT ARISE. THIS VICARIOUS TAX WITHHOLDING LIABILITY CANNOT BE INVOKED, UNLESS PRIMARY TAX LIABILITY OF THE RECIPIENT / FOREIGN AGENT IS ESTAB LISHED. IN THIS CASE, THE PRIMARY TAX LIABILITY OF THE FOREIGN AGENT IS NOT ESTABLISHED. THEREFORE, THE VICARIOUS LIABILITY ON THE PART OF THE ASSESSEE TO DEDUCT THE TAX AT SOURCE DO ES NOT EXIST. 10. FURTHER, JUST BECAUSE, THE PAYER / ASSESSEE HAS NOT OBTAINED A SPECIFIED DECLARATION FROM THE REVENUE AUTHORITIES TO THE EFF ECT THAT THE RECIPIENT IS NOT LIABLE TO BE TAXED IN INDIA, IN RESPECT OF THE INCOME EMBEDDE D IN THE PARTICULAR PAYMENT, THE ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 16 ASSESSING OFFICER CANNOT PROCEED ON THE BASIS THAT THE PAYER HAS AN OBLIGATION TO DEDUCT TAX AT SOURCE. HE STILL HAS TO DEMONSTRATE A ND ESTABLISH THAT THE PAYEE HAS A TAX LIABILITY IN RESPECT OF THE INCOME EMBEDDED IN THE IMPUGNED PAYMENT. 11. IN THE INSTANT CASE, IT IS SEEN, ADMITTEDLY THA T THE NON-RESIDENT AGENTS WERE ONLY PROCURING ORDERS ABROAD AND FOLLOWING UP PAYMENTS W ITH BUYERS. NO OTHER SERVICES ARE RENDERED OTHER THAN THE ABOVE. SOURCING ORDERS ABROAD, FOR WHICH PAYMENTS HAVE BEEN MADE DIRECTLY TO THE NON-RESIDENTS ABROAD, DOE S NOT INVOLVE ANY TECHNICAL KNOWLEDGE OR ASSISTANCE IN TECHNICAL OPERATIONS OR OTHER SUPPORT IN RESPECT OF ANY OTHER TECHNICAL MATTERS. IT ALSO DOES NOT REQUIRE A NY CONTRIBUTION OF TECHNICAL KNOWLEDGE, EXPERIENCE, EXPERTISE, SKILL OR TECHNICA L KNOW-HOW OF THE PROCESSES INVOLVED OR CONSIST IN THE DEVELOPMENT AND TRANSFER OF A TECHNICAL PLAN OR DESIGN. THE PARTIES MERELY SOURCE THE PROSPECTIVE BUYERS FOR EF FECTING SALES BY THE ASSESSEE, AND IS ANALOGOUS TO A LAND OR A HOUSE / REAL ESTATE AGE NT / BROKER, WHO WILL BE INVOLVED IN MERELY IDENTIFYING THE RIGHT PROPERTY FOR THE PROSP ECTIVE BUYER / SELLER AND ONCE HE COMPLETES THE DEAL, HE GETS THE COMMISSION. THUS, B Y NO STRETCH OF IMAGINATION, IT CANNOT BE SAID THAT THE TRANSACTION PARTAKES THE CH ARACTER OF ' FEES FOR TECHNICAL SERVICES ' AS EXPLAINED IN THE CONTEXT OF SECTION 9(1)(VII) OF THE ACT. 12. AS THE NON-RESIDENTS WERE NOT PROVIDING ANY TEC HNICAL SERVICES TO THE ASSESSEE, AS HELD ABOVE AND AS HELD BY THE COMMISSIONER OF IN COME TAX (APPEALS), THE COMMISSION PAYMENT MADE TO THEM DOES NOT FALL INTO THE CATEGORY OF ' FEES OF TECHNICAL SERVICES ' AND THEREFORE, EXPLANATION (2) TO SECTION 9(1)(VI I) OF THE ACT, AS INVOKED BY THE ASSESSING OFFICER, HAS NO APPLICATIO N TO THE FACTS OF THE ASSESSEE'S CASE. 13. IN THIS CASE, THE COMMISSION PAYMENTS TO THE NO N RESIDENT AGENTS ARE NOT TAXABLE IN INDIA, AS THE AGENTS ARE REMAINING OUTSIDE, SERV ICES ARE RENDERED ABROAD AND PAYMENTS ARE ALSO MADE ABROAD. 14. THE CONTENTION OF THE LEARNED COUNSEL FOR THE R EVENUE IS THAT THE TRIBUNAL OUGHT NOT TO HAVE RELIED UPON THE DECISION G.E.INDIA TECH NOLOGY'S CASE, CITED SUPRA, IN VIEW OF INSERTION OF EXPLANATION 4 TO SECTION 9(1)(I) OF THE ACT WITH CORRESPONDING INTRODUCTION OF EXPLANATION 2 TO SECTION 195(1) OF THE ACT, BOTH BY THE FINANCE ACT, 2012, WITH RETROSPECTIVE EFFECT FROM 01.04.1962. 15. THE ISSUE RAISED IN THIS CASE HAS BEEN THE SUBJ ECT MATTER OF THE DECISION, IN THE RECENT CASE, CIT V. KIKANI EXPORTS (P.) LTD. [2014] 369 ITR 96/[2015] 232 TAXMAN 255/49 TAXMANN.COM 601 (MAD.) WHEREIN THE CONTENTIO N OF THE REVENUE HAS BEEN REJECTED AND ASSESSEE HAS BEEN UPHELD AND THE RELEV ANT OBSERVATION READS AS UNDER: '... THE SERVICES RENDERED BY THE NON-RESIDENT AGEN T COULD AT BEST BE CALLED AS A SERVICE FOR COMPLETION OF THE EXPORT COMMITMENT A ND WOULD NOT FALL WITHIN THE DEFINITION OF ' FEES FOR TECHNICAL SERVICES ' AND, THEREFORE, SECTION 9 WAS NOT APPLICABLE AND, CONSEQUENTLY, SECTION 195 DID N OT COME INTO PLAY. THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING O FFICER TOWARDS EXPORT COMMISSION PAID BY THE ASSESSEE TO THE NON-RESIDENT WAS RIGHTLY DELETED .' 16. WHEN THE TRANSACTION DOES NOT ATRACT THE PROVIS IONS OF SECTION 9 OF THE ACT, THEN THERE IS NO QUESTION OF APPLYING EXPLANATION 4 TO S ECTION 9 OF THE ACT. THEREFORE, THE REVENUE HAS NO CASE AND THE TAX CASE APPEAL IS LIAB LE TO BE DISMISSED. 6. CLEARLY, THEREFORE, THE PAYMENT OF COMMISSION IN THE HANDS OF THE NON-RESIDENT AGENT, AS LONG AS SUCH AN AGENT CARRIES OUT ITS ACT IVITIES OUTSIDE INDIA, DOES NOT RESULT IN TAXABILITY IN THE HANDS OF THE AGENT IN INDIA 39. AS WE DEAL WITH THIS ASPECT OF THE MATTER, WE M AY ALSO TAKE NOTE OF THE FOLLOWING ANALYSIS, IN THE CASE OF UPS SCS ASIA LIMITED VS ADIT [(2012) 50 SOT 268 (MUM)], ABOUT THE SCOPE ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 17 OF MANAGERIAL, CONSULTANCY AND TECHNICAL SERVICES W HICH THE SERVICES RENDERED MUST FULFIL SO AS TO LEAD TO TAXABILITY AS FEES FOR TECHNICAL SERV ICES: 5. A BARE PERUSAL OF THE ABOVE QUOTED PROVISION IND ICATES THAT THE ' FEES FOR TECHNICAL SERVICES ' MEANS ANY CONSIDERATION FOR RENDERING OF ANY ' MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES ' BUT DOES NOT INCLUDE THE CONSIDERATION FOR ANY CO NSTRUCTION, ASSEMBLY ETC. THE LEARNED CIT(A) HAS HELD THE SERVICES RENDE RED BY THE ASSESSEE AS FEES FOR TECHNICAL SERVICES' COMING WITHIN THE SWEEP OF ' MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES '. ON THE CONTRARY, THE CONTENTION OF THE ASSESSEE HAS RE MAINED BEFORE THE AUTHORITIES BELOW AS WELL AS THAT THE SUCH SERVICES DO NOT FALL WITHIN T HE AMBIT OF ANY OF THE CATEGORIES TAKEN NOTE OF BY THE AUTHORITIES BELOW. WE WILL EXAMINE AS TO WHETHER THE SERVICES SO PROVIDED BY THE ASSESSEE FALL WITHIN THE SCOPE OF ' MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES ' AS PER EXPLANATION 2 TO SECTION 9(1)(VII). 6. IN ORDER TO APPRECIATE THE NATURE OF SERVICES MO RE ELABORATELY, IT IS RELEVANT TO CONSIDER THE TERMS OF THE AGREEMENT ENTERED INTO BE TWEEN THE ASSESSEE AND MENLO INDIA EXECUTED ON NOVEMBER 7, 2006 WITH EFFECT FROM 1ST JUNE, 2005, A COPY OF WHICH IS AVAILABLE ON PAGE 1 ONWARDS OF THE PAPER BOOK. T HE SCOPE OF SERVICES HAS BEEN GIVEN IN CLAUSE 1.1. IN THE RECITAL CLAUSE IT HAS B EEN PROVIDED THAT THE ASSESSEE COMPANY MAY REQUIRE MENLO INDIA TO PERFORM LOGISTIC S SERVICES SUCH AS TRANSPORT, PROCUREMENT, CUSTOM CLEARANCE, SORTING, DELIVERY, W AREHOUSING AND PICKING UP SERVICES ( LOCAL SERVICES ) WITHIN INDIA (LOCAL OPERATING AREA). IT HAS FURTH ER BEEN PROVIDED THAT MENLO INDIA MAY ALSO SEEK SIMILAR SER VICES FROM THE ASSESSEE-COMPANY SUCH AS TRANSPORT, PROCUREMENT, CUSTOMS CLEARANCE, SORTING, DELIVERY, WAREHOUSING AND PICK UP SERVICES ( INTERNATIONAL SERVICES ) OUTSIDE INDIA. IN THE PRESENT APPEAL WE ARE CONCERNED WITH THE ' INTERNATIONAL SERVICES ' PROVIDED BY THE ASSESSEE TO MENLO OUTSIDE INDIA. THESE SERVICES COMPRISE OF TRANSPORT , PROCUREMENT, CUSTOMS CLEARANCE, SORTING, WAREHOUSING AND PICK UP SERVICE S ON THE CARGO EXPORTED BY MENLO ON BEHALF OF ITS CUSTOMERS. HAVING NOTED THE NATURE OF SERVICES PROVIDED BY THE ASSESSEE OUTSIDE INDIA, FOR WHICH MENLO INDIA MADE THE PAYMENT, LET US CONSIDER IF THESE CAN BE DESCRIBED AS MANAGERIAL OR TECHNICAL O R CONSULTANCY SERVICES. 7. FIRST WE WILL CONSIDER THE AMBIT OF ' MANAGERIAL SERVICES ' TO TEST WHETHER THE INSTANT SERVICES CAN QUALIFY TO BE SO CALLED. ORDINARILY TH E MANAGERIAL SERVICES MEAN MANAGING THE AFFAIRS BY LAYING DOWN CERTAIN POLICIE S, STANDARDS AND PROCEDURES AND THEN EVALUATING THE ACTUAL PERFORMANCE IN THE LIGHT OF THE PROCEDURES SO LAID DOWN. THE MANAGERIAL SERVICES CONTEMPLATE NOT ONLY EXECUT ION BUT ALSO THE PLANNING PART OF THE ACTIVITY TO BE DONE. IF THE OVERALL PLANNING AS PECT IS MISSING AND ONE HAS TO FOLLOW A DIRECTION FROM THE OTHER FOR EXECUTING PARTICULAR JOB IN A PARTICULAR MANNER, IT CANNOT BE SAID THAT THE FORMER IS MANAGING THAT AFFAIR. IT WOULD MEAN THAT THE DIRECTIONS OF THE LATTER ARE EXECUTED SIMPLICITY WITHOUT THERE BEING ANY PLANNING PART INVOLVED IN THE EXECUTION AND ALSO THE EVALUATION OF THE PERFORMANC E. IN THE ABSENCE OF ANY SPECIFIC DEFINITION OF THE PHRASE ' MANAGERIAL SERVICES ' AS USED IN SECTION 9(1)(VII) DEFINING THE ' FEES FOR TECHNICAL SERVICES ', IT NEEDS TO BE CONSIDERED IN A COMMERCIAL SENSE. IT CANNOT BE INTERPRETED IN A NARROW SENSE TO MEAN SIMPLY EXECUTING THE DIRECTIONS OF THE OTHER FOR DOING A SPECIFIC TASK. FOR INSTANCE, IF GOODS ARE TO BE LOADED AND SOME WORKER IS INSTRUCTED TO PLACE THE GOODS ON A CARRIE R IN A PARTICULAR MANNER, THE ACT OF THE WORKER IN PLACING THE GOODS IN THE PRESCRIBED M ANNER, CANNOT BE DESCRIBED AS MANAGING THE GOODS. IT IS A SIMPLE DIRECTION GIVEN TO THE WORKER WHO HAS TO EXECUTE IT IN THE WAY PRESCRIBED. IT IS QUITE NATURAL THAT SOM E SORT OF APPLICATION OF MIND IS REQUIRED IN EACH AND EVERY ASPECT OF THE WORK DONE. AS IN THE ABOVE EXAMPLE WHEN THE WORKER WILL LIFT THE GOODS, HE IS EXPECTED TO B E VIGILANT IN PICKING UP THE GOODS MOVING TOWARDS THE CARRIER AND THEN PLACING THEM. T HIS ACT OF THE WORKER CANNOT BE DESCRIBED AS MANAGING THE GOODS BECAUSE HE SIMPLY F OLLOWED THE DIRECTION GIVEN TO HIM. ON THE OTHER HAND, ' MANAGING ' ENCOMPASSES NOT ONLY THE SIMPLE EXECUTION OF A WORK, BUT ALSO CERTAIN OTHER ASPECTS, SUCH AS PLANN ING FOR THE WAY IN WHICH THE EXECUTION IS TO BE DONE COUPLED WITH THE OVERALL RE SPONSIBILITY IN A LARGER SENSE. THUS IT IS MANIFEST THAT THE WORD ' MANAGING ' IS WIDER IN SCOPE THAN THE WORD ' EXECUTING '. RATHER THE LATER IS EMBEDDED IN THE FORMER AND NOT VICE VERSA. ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 18 8. ADVERTING TO THE FACTS OF THE INSTANT CASE IT IS OBSERVED THAT THE ASSESSEE PERFORMED FREIGHT AND LOGISTICS SERVICES OUTSIDE IN DIA IN RESPECT OF CONSIGNMENTS ORIGINATING FROM INDIA UNDERTAKEN TO BE DELIVERED B Y MENLO INDIA. THE ROLE OF THE ASSESSEE IN THE ENTIRE TRANSACTION WAS TO PERFORM O NLY THE DESTINATION SERVICES OUTSIDE INDIA BY UNLOADING AND LOADING OF CONSIGNME NT, CUSTOM CLEARANCE AND TRANSPORTATION TO THE ULTIMATE CUSTOMER. IN OUR CON SIDERED OPINION, IT IS TOO MUCH TO CATEGORIZE SUCH RESTRICTED SERVICES AS MANAGERIAL S ERVICES. WE, THEREFORE, JETTISON THIS CONTENTION RAISED ON BEHALF OF THE REVENUE. 9. NOW WE TAKE UP THE NEXT COMPONENT OF THE DEFINIT ION OF ' FEES FOR TECHNICAL SERVICES ', BEING ' CONSULTANCY SERVICES ', WHICH HAS BEEN PRESSED INTO SERVICE BY THE LEARNED CIT(A) TO FORTIFY HIS VIEW THAT THE AMOUNT RECEIVED BY THE ASSESSEE IS COVERED WITHIN SECTION 9(1)(VII). THE WORD ' CONSULTANCY ' MEANS GIVING SOME SORT OF CONSULTATION DE HORS THE PERFORMANCE OR THE EXECUTI ON OF ANY WORK. IT IS ONLY WHEN SOME CONSIDERATION IS GIVEN FOR RENDERING SOME ADVI CE OR OPINION ETC., THAT THE SAME FALLS WITHIN THE SCOPE OF ' CONSULTANCY SERVICES '. THE WORD ' CONSULTANCY ' EXCLUDES ACTUAL ' EXECUTION '. THE NATURE OF SERVICES, BEING FREIGHT AND LOGIST ICS SERVICES PROVIDED BY THE ASSESSEE TO MENLO INDIA HAS NOT BEE N DISPUTED BY THE AUTHORITIES BELOW. THERE IS NOTHING LIKE GIVING ANY CONSULTATIO N WORTH THE NAME. RATHER SUCH PAYMENT IS WHOLLY AND EXCLUSIVELY FOR THE EXECUTION IN THE SHAPE OF TRANSPORT, PROCUREMENT, CUSTOMS CLEARANCE, DELIVERY, WAREHOUSI NG AND PICKING UP SERVICES. THAT BEING THE POSITION, WE OPINE THAT THE PAYMENT IN LIEU OF FREIGHT AND LOGISTICS SERVICES CANNOT BE RANKED AS CONSULTANCY SERVICES. 10. THE ONLY LEFT OVER COMPONENT OF THE DEFINITION OF ' FEES FOR TECHNICAL SERVICES ' TAKEN NOTE OF BY THE LD. CIT(A) IS ' TECHNICAL SERVICES '. HE OBSERVED THAT THE ASSESSEE'S BUSINESS STRUCTURE IS TIME BOUND SERVICE COUPLED WITH CONTINUOUS REAL TIME TRANSMISSION OF INFORMATION BY USING AND ALSO MAKING AVAILABLE ITS TECHNOLOGY IN THE FORM OF SOPHISTICATED EQUIPMENTS AND SOFTWARE E TC. THE LEARNED CIT(A) HAS HELD THAT : ' IN ORDER TO ENSURE EFFICIENT AND TIMELY DELIVERY AN D TO PROVIDE CONTINUOUS REAL TIME INFORMATION, THE APPELLANT IS REQUIRED TO USE SOPHISTICATED TECHNOLOGY FOR WHICH THE INDIAN ENTITY IS ALSO EQUALLY INVOLVE D AND TO WHOM THE APPELLANT IS COMMITTED TO PROVIDING THE REQUISITE SOFTWARE AND E QUIPMENT '. THE LEARNED CIT(A) HAS ALSO ACCENTUATED ON THE CLAUSE 2 OF THE AGREEMENT WHICH READS AS UNDER: '2. CONTRACTOR SHALL SEPARATELY EXECUTE A TECHNOLOG Y AND SOFTWARE LICENSE AGREEMENT FOR THE PROVISION OF COMPUTER EQUIPMENT A ND SOFTWARE SUPPLIED BY SCS. CONTRACTOR SHALL SEPARATELY EXECUTE A TRADEMAR K LICENSE AGREEMENT FOR THE USE OF ANY MARKS OR BRANDS OWNED BY UNITED PARC EL SERVICE OF AMERICA, INC. THE FEE PAYABLE BY CONTRACTOR UNDER PARAGRAPH 3.1 WILL NOT INCLUDE ANY ROYALTY AMOUNT RELATING TO THE USE OF INTANGIBLE PR OPERTY OR INFORMATION.' 11. ON GOING THROUGH CLAUSE 2 OF THE AGREEMENT, IT IS OBVIOUS THAT MENLO INDIA SHALL 'SEPARATELY EXECUTE A TECHNOLOGY AND SOFTWARE LICEN SE AGREEMENT' FOR THE PROVISION OF COMPUTER EQUIPMENT AND SOFTWARE SUPPLIED BY THE ASS ESSEE. IT IS NOBODY'S CASE THAT THE CONSIDERATION IN QUESTION RELATES TO THE SUPPLY OF ANY COMPUTER EQUIPMENT AND SOFTWARE BY THE ASSESSEE TO MENLO INDIA. WE FAIL TO APPRECIATE AS TO HOW THIS CLAUSE 2 MAKES THE SERVICES PROVIDED BY THE ASSESSEE AS ' TECHNICAL '. RATHER CLAUSE 2 MANDATES TO EXECUTE A SEPARATE TECHNOLOGY AND SOFTW ARE LICENSE AGREEMENT FOR THE PROVISION OF COMPUTER EQUIPMENT AND SOFTWARE. HOW I S IT THAT THE CONSIDERATION FOR THE SERVICES CAN BE ATTRIBUTED TO A PROPOSED AGREEMENT, WHICH HAS YET TO SEE THE LIGHT OF THE DAY. 12. THE LEARNED CIT(A) HAS ALSO HARPED ON ' TRANSPORTATION OF TIME SENSITIVE PACKAGES ' WITH A VIEW TO BRING THE SERVICES PROVIDED BY THE ASSESSEE WITHIN THE FOLD OF ' TECHNICAL SERVICES '. IN REACHING THIS CONCLUSION THE LEARNED CIT(A) A LSO RELIED ON THE ORDER PASSED BY THE MUMBAI BENCH OF THE TRIBUNA L IN BLUE DART EXPRESS LIMITED VS. JCIT. LET US EXAMINE THE FACTS OF THAT CASE. TH E ASSESSEE THERE CLAIMED DEDUCTION U/S 80O IN RESPECT OF ITS FOREIGN EXCHAN GE EARNINGS FOR RENDERING TECHNICAL ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 19 / PROFESSIONAL SERVICES TO A US MULTI INTERNATIONAL COMPANY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. REQUIRED THE ASSES SEE TO FURNISH THE NATURE OF SERVICES RENDERED AND ALSO THE CALCULATION OF DEDUC TION. THE ASSESSEE DID IT. ON BEING SATISFIED THE A.O. GRANTED DEDUCTION U/S 80O . BY EXERCISING THE POWER U/S 263, THE LEARNED CIT HELD THE ASSESSMENT ORDER TO B E ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE TO THE EXTENT OF GRANTI NG DEDUCTION U/S 80O. WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL, IT WAS OBSERVED THAT THE ISSUE IS DEBATABLE AND HENCE OUTSIDE THE AMBIT OF SECTION 263. APART FROM THAT, IT WAS ALSO OBSERVED THAT THE ASSESSEE WAS ENGAGED IN INTEGRATED AIR AND GROUND T RANSPORTATION OF TIME SENSITIVE PACKAGES TO VARIOUS DESTINATIONS RENDERING COMMERCI AL SERVICES. IT WAS IN THIS CONTEXT THAT THE ASSESSEE WAS HELD TO BE ELIGIBLE FOR DEDUC TION U/S 80O. AT THIS JUNCTURE IT WILL BE USEFUL TO NOTE THAT AT THE MATERIAL TIME SE CTION 80O PROVIDED FOR DEDUCTION ON ANY 'INCOME BY WAY OF ROYALTY, COMMISSION, FEES OR ANY SIMILAR PAYMENT RECEIVED BY THE ASSESSEE FROM THE GOVERNMENT OF A F OREIGN STATE OR A FOREIGN ENTERPRISE IN CONSIDERATION FOR THE USE OUTSIDE IND IA OF ANY PATENT, INVENTION, MODEL, DESIGN, SECRET FORMULA OR PROCESS, OR SIMILA R PROPERTY RIGHT, OR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SC IENTIFIC KNOWLEDGE, EXPERIENCE OR SKILL MADE AVAILABLE OR PROVIDED OR A GREED TO BE MADE AVAILABLE OR PROVIDED TO SUCH GOVERNMENT OR ENTERPRISE BY THE ASSESSEE, OR IN CONSIDERATION OF TECHNICAL OR PROFESSIONAL SERVICES RENDERED OR AGREED TO BE RENDERED OUTSIDE INDIA TO SUCH GOVERNMENT OR ENTERP RISE BY THE ASSESSEE '. FROM THE ABOVE QUOTED PART OF SEC. 80O, IT CAN BE SEEN THAT THE DEDUCTION AT THAT TIME WAS AVAILABLE NOT ONLY IN RESPECT OF INCOME AS A CONSIDERATION FOR THE USE OF ' TECHNICAL OR PROFESSIONAL SERVICES' BUT ALSO ANY 'C OMMERCIAL....KNOWLEDGE EXPERIENCE OR SKILL '. THESE TWO SOURCES ARE DISTINCT FROM EACH OTHER A S CAN BE SEEN FROM THE EMPLOYMENT OF WORD ' OR ' BETWEEN THEM. IN ORDER TO QUALIFY FOR DEDUCTION UNDER THIS SECTION, THE INCOME COULD HAVE RESULTED FROM THE RENDERING OF ' TECHNICAL OR PROFESSIONAL SERVICES ' OR COMMERCIAL KNOWLEDGE, EXPERIENCE OR SKILL ETC. WHEN THE TRIBUNAL IN BLUE DART EXPRESS LIMITED (SUPRA) HELD THE ASSESSEE TO BE ENTITLED TO DEDUCTION, IT WAS CONSIDERING ALL THE SPECIES OF TH E SERVICES SET OUT IN SECTION 80O AND NOT ONLY ' TECHNICAL OR PROFESSIONAL SERVICES '. IT WAS IN THE LIGHT OF SUCH LANGUAGE OF THE PROVISION THAT THE TRIBUNAL HELD TH E ASSESSEE TO BE ELIGIBLE FOR RELIEF U/S 80O.WE ARE CURRENTLY DEALING WITH SECTION 9(1) (VII), BEING THE ' FEES FOR TECHNICAL SERVICES ' AND THE DEFINITION OF SUCH EXPRESSION IS RESTRICT ED ONLY TO ' MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES ' AND DOES NOT HAVE ANY SUCH ELEMENTS AS ARE THERE IN SECTION 80O. THE DECISION IN THE CASE OF BLUE DART EXPRESS LIMITED (SUPRA) CAME UP FOR CONSIDERATION BEFORE THE MUMBAI BENCH O F THE TRIBUNAL IN DAMPSKIBSSELSKABET AF 1912 VS. ADDL.DIT (INTERNATIO NAL TAXATION) [(2011) 51 DTR 148] ( TO WHICH ONE OF US, NAMELY, THE LD. JM IS PARTY ) IN WHICH IT HAS BEEN HELD THAT THE RATIO LAID DOWN IN THAT CASE CANNOT BE UNIVERSA LLY APPLIED. DUE TO MATERIAL DIFFERENCE IN THE LANGUAGE OF SECTIONS 9(1)(VII) AN D 80O AS DISCUSSED ABOVE, WE HOLD THAT THE DECISION IN BLUE DART EXPRESS LIMITED (SUPRA),CANNOT BE HELD TO BE SUPPORTING THE CASE OF THE REVENUE. 13.THE LD. CIT(A) IN REACHING THE CONCLUSION THAT T HE ASSESSEE RENDERED ' TECHNICAL SERVICES ' ALSO OBSERVED THAT ITS ' BUSINESS STRUCTURE IS TIME BOUND SERVICE COUPLED WITH CONTINUOUS REAL TIME TRANSMISSION OF I NFORMATION BY USING AND ALSO MAKING AVAILABLE ADVANCED TECHNOLOGY IN THE FO RM OF SOPHISTICATED EQUIPMENT AND SOFTWARE. ' HE WAS SWAYED BY THE CONTENTION OF THE ASSESSEE T HAT THE MANLO INDIA OR THE ULTIMATE CUSTOMER COULD TRAC K THE MOVEMENT OF CARGO WITH THE HELP OF COMPUTERS. WE HAVE NOTED SUPRA THAT THE CON SIDERATION RECEIVED BY THE ASSESSEE DID NOT INCLUDE ANY CONSIDERATION FOR THE SUPPLY OF ANY EQUIPMENT TO MANLO INDIA. NOW WE WILL EXAMINE AS TO WHETHER THE USE OF COMPUTER IN ANY MANNER FOR KNOWING THE LOCATION OF THE CARGO AT A PARTICULAR T IME, CAN BE HELD AS TECHNICAL SERVICE. 14. EXPLANATION TO SECTION 9(1)(VII) DEFINES THE EX PRESSION ' FEES FOR TECHNICAL SERVICES ' AS CONSIDERATION FOR RENDERING ' MANAGERIAL, TECHNICAL OR CONSULTANCY ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 20 SERVICES '. IT IS SEEN THAT THERE IS NO DEFINITION OF THE TE RM ' TECHNICAL SERVICES ' IN THE ACT. 15. THE PRINCIPLE OF NOSCITUR A SOCIIS MANDATES THA T THE MEANING OF A WORD IS TO BE JUDGED BY THE COMPANY OF OTHER WORDS WHICH IT KEEPS . THIS RULE IS WIDER IN SCOPE THAN THE RULE OFEJUSDEM GENERIS. IN ORDER TO DISCOVER TH E MEANING OF A WORD WHICH HAS NOT BEEN DEFINED IN THE ACT, THE HON'BLE SUPREME COURT HAS APPLIED THE PRINCIPLE OFNOSCITUR A SOCIIS IN SEVERAL CASES INCLUDING ARAV INDA PARAMILA WORKS VS. CIT [(1999) 237ITR 284 (SC)]. AS NOTED ABOVE THE WORD ' TECHNICAL ' HAS BEEN SANDWICHED BETWEEN THE WORDS ' MANAGERIAL ' AND ' CONSULTANCY ' IN EXPLANATION 2 TO SEC. 9(1)(VII) AND NO DEFINITION HAS BEEN ASSIGNED TO THE ' TECHNICAL ' SERVICES IN THE RELEVANT PROVISION, WE NEED TO ASCERTAIN THE MEANING OF THE ' TECHNICAL SERVICES ' FROM THE OVERALL MEANING OF THE WORDS ' MANAGERIAL ' AND ' CONSULTANCY ' SERVICES BY APPLYING THE PRINCIPLE OF NOSTICUR A SOCIIS. IT HAS BEEN HEL D ABOVE THAT THE ' MANAGERIAL SERVICES ' AND ' CONSULTANCY SERVICES ' PRESUPPOSE SOME SORT OF DIRECT HUMAN INVOLVEMENT. THESE SERVICES CANNOT BE CONCEIVED WIT HOUT THE DIRECT INVOLVEMENT OF MAN. THESE SERVICES CAN BE RENDERED WITH OR WITHOUT ANY EQUIPMENT, BUT THE HUMAN INVOLVEMENT IS INEVITABLE. MOVING IN THE LIGHT OF T HIS RULE, THERE REMAINS NO DOUBT WHATSOEVER THAT THE TECHNICAL SERVICES CANNOT BE CO NTEMPLATED WITHOUT THE DIRECT INVOLVEMENT OF HUMAN ENDEAVOR. WHERE SIMPLY AN EQUI PMENT OR A STANDARD FACILITY ALBEIT DEVELOPED OR MANUFACTURED WITH THE USE OF TE CHNOLOGY IS USED, SUCH A USER CANNOT BE CHARACTERIZED AS USING ' TECHNICAL SERVICES '. 16. COMING BACK TO THE FACTS OF THE PRESENT CASE, E VEN IF WE ACCEPT THE LEARNED FIRST APPELLATE AUTHORITY'S POINT OF VIEW THAT THE COMPUT ER COULD BE USED IN TRACING THE MOVEMENT OF THE GOODS, SUCH USE OF COMPUTER, THOUGH INDIRECT, REMOTE AND NOT NECESSARY, CANNOT BRING THE PAYMENT FOR FREIGHT AND LOGISTICS SERVICES WITHIN THE PURVIEW OF ' TECHNICAL SERVICES '. THE ESSENCE OF THE CONSIDERATION FOR THE PAYMENT IS RENDERING OF SERVICES AND NOT THE USE OF COMPUTER. IF INCIDENTALLY COMPUTER IS USED AT ANY STAGE, WHICH IS OTHERWISE NOT NECESSARY FOR REN DERING SUCH SERVICES, THE PAYMENT FOR FREIGHT AND LOGISTICS WILL NOT PARTAKE OF THE C HARACTER OF FEES OF ' TECHNICAL SERVICES '. WE, THEREFORE, REPEL THIS CONTENTION RAISED ON B EHALF OF THE REVENUE. 17. THUS IT CAN BE NOTICED THAT THE PAYMENT MADE TO THE ASSESSEE IN QUESTION IS NOT A CONSIDERATION FOR MANAGERIAL OR TECHNICAL OR CONSUL TANCY SERVICES. THAT BEING THE POSITION, IT CANNOT FALL WITHIN THE AMBIT OF SECTIO N 9(1)(VII). 40. WE MAY ALSO TAKE NOTE OF ANOTHER DECISION OF A COORDINATE BENCH DEALING WITH MATERIALLY SIMILAR QUESTION DEALING WITH TAXABILITY OF INCOME IN THE HANDS OF NON RESIDENT COMMISSION AGENTS, REPRESENTING INDIAN PRINCIPAL, IN WHICH SIM ILAR ACTIVITIES WERE SAID TO HAVE BEEN PERFORMED. IN THE CASE OF ARMYESH GLOBAL VS ACIT [(2012) 51 SOT 564 (MUM)], THE COORDINATE BENCH HAS, INTER ALIA, OBSERVED AS FOLLO WS: 16. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE F ACTS ON RECORD. THE LEARNED ASSESSING OFFICER TRIED TO INVOKE THE DEFINITIONS O F TECHNICAL SERVICES ON THE COMMISSION PAID TO THE FOREIGN COMPANY. THE REASON BEING THAT COMMISSION PAYMENT TO NON RESIDENT IS NOT COVERED BY THE PROVISIONS OF SECTION 40(A)(IA), AS IT HAS ONLY APPLICABLE TO ANY INTEREST ROYALTY, FEES FOR TECHNI CAL SERVICES OR OTHER SUM CHARGEABLE UNDER THIS ACT WHICH PAYABLE OUTSIDE INDIA ON WHICH TAX IS DEDUCTIBLE AT SOURCE BUT HAS NOT BEEN DEDUCTED. THE ASSESSING OFFICER MADE O UT A CASE THAT THE COMMISSION PAID IS TEES FOR TECHNICAL SERVICES' WITHOUT SPECIF YING WHAT ARE THE TECHNICAL/MANAGERIAL SERVICES RENDERED BY THE SAID COMPANY TO THE ASSESSEE. ASSESSEE INDEED ENTERED INTO AN AGREEMENT FOR PROPA GATION OF ITS HANDICRAFT PRODUCTS WITH THE NON RESIDENT COMPANY. THE COPIES OF THE AG REEMENT HAVE BEEN PLACED BEFORE THE AUTHORITIES. THE AGREEMENT CLEARLY SHOWS THAT THE NON RESIDENT COMPANY WAS TO GET COMMISSION FOR PROMOTING THE PRODUCTS OF THE ASSESSEE COMPANY AND RENDERING INCIDENTAL SERVICES ON SALES SUCH AS RECO VERY ETC. FOR DOING EXPORT SALES. IT IS ALSO RESPONSIBILITY OF THE NON RESIDENT COMPANY TO DISSEMINATE THE INFORMATION AND INQUIRE ABOUT VARIOUS IMPORTERS IN VARIOUS COUNTRIE S SO THAT ASSESSEE EXPORTS CAN BE ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 21 INCREASED. THE AGREEMENT CLEARLY SHOWS THAT NON RES IDENT COMPANY WAS TO GET THE COMMISSION FOR PROMOTING THE PRODUCT OF ASSESSEE CO MPANY AFTER SALES PROCEEDS ARE RECEIVED. THE DETAILED TERMS OF THE AGREEMENT ARE A S UNDER: ' AGENCY AGREEMENT IN THIS AGREEMENT BETWEEN M/S ARMAYESH GLOBAL, KAMA NWALA CHAMBERS, 2ND FLOOR, SIR P.M. ROAD, FORT, MUMBAI 400 001, INDIA HEREINAF TER REFERRED TO AS ' PRINCIPAL ' AND INDIJACK LIMITED, 99 BRECK NOCK ROAD, LONDON N19 5 AB, U.K. HEREINAFTER REFERRED TO AS ' AGENT ' THE FOLLOWING IS AGREED UPON: - ARTICLE 1 - OBJECT OF AGREEMENT 1.1. THE PRINCIPAL ENTRUSTS THE AGENT WITH THE NON EXCLUSIVE AGENCY FOR THE FOLLOWING CONTRACTUAL TERRITORY (AREA): WORLDWIDE 1.2. THE PRINCIPAL ALSO HAS THE RIGHT TO OPERATE AC TIVELY' IN HE AFOREMENTIONED TERRITORY (AREA). 1.3. THE AGENCY COVERS THE FOLLOWING PRODUCTS: HAND EMBROIDERED PRODUCTS OF ANY AND ALL KINDS. 1.4. THE AGENT COVENANTS AND AGREES TO REPRESENT TH E PRINCIPAL ON A COMMISSION BASIS. ARTICLE 2 DUTIES OF THE AGENT 2.1 IT SHALL BE THE AGENT'S DUTY TO NEGOTIATE CONTR ACTS WITH THE OVERSEAS PARTY. FURTHERMORE, THE AGENT SHALL ACT ON THE PRINCIPAL'S BEHALF IN CONFORMITY WITH PROVISIONS HEREINAFTER ENUMERATED. THE AGENT SHALL NOT BE AUTH ORIZED TO ENTER INTO A CONTRACT OR OTHERWISE TO BIND THE PRINCIPAL. THE PRINCIPAL SHAL L BE FREE TO CONCLUDE, OR TO REFUSE THE CONCLUSION OF A CONTRACT NEGOTIATED BY THE AGENT. 2.2 WHILE NEGOTIATING CONTRACTS OF SALE THE AGENT S HALL ACT IN CONFORMITY WITH ALL THE CONDITIONS AND PARTICULARLY OF DELIVERY AND PAYMENT AS FIXED BY THE PRINCIPAL. 2.3 THE AGENT SHALL BE RESPONSIBLE FOR NEGOTIATING WITH ALL PARTIES IN THEIR TERRITORY (AREA). THE AGENT SHALL TRAVEL IN THEIR TERRITORY ( AREA) REGULARLY TO VISIT CUSTOMERS, AND IS BOUND TO KEEP CONCLUDED CONTRACTS SECRET. THE AG ENT SHALL ALWAYS KEEP THE PRINCIPAL INFORMED ABOUT THEIR ACTIVITIES AND SHALL SUPPLY THE PRINCIPAL, AT LEAST ONCE EVERY QUARTER, WITH REPORTS ON ECONOMIC DEVELOPMENT S AND MARKET CONDITIONS IN THE TERRITORY (AREA) AND AT THE SAME TIME, CONVEY TO TH E PRINCIPAL, THE AGENT'S OBSERVATIONS WITH RESPECT TO ACTIVITIES OF COMPETITORS. THE AGEN T SHALL REPORT IMMEDIATELY ON PARTICULAR PROFITABLE BUSINESS POSSIBILITIES AND EX TRAORDINARY EVENTS. 2.4. THE AGENT SHALL ABSTAIN FROM ANY COMPETITION W HATSOEVER AGAINST THE PRINCIPAL AND SHALL NOT PROMOTE COMPETITION BY THIRD PERSONS. IN PARTICULAR, THE AGENT SHALL NOT ACT FOR COMPETITIVE FIRMS AS A COMMERCIAL AGENT, CO MMISSION MERCHANT OR DISTRIBUTOR, NOR SHALL THE AGENT ASSOCIATE DIRECTLY OR INDIRECTL Y WITH COMPETITIVE FIRMS. THE AGENT SHALL NOT, FOR ALL TIME EXPLOIT OR DISCLOSE TO OTHE R PERSONS ANY BUSINESS AND PRODUCTION SECRETS OF THE PRINCIPAL THAT HAVE BEEN COMMUNICATE D TO THEM OR WHICH THEY HAVE OTHERWISE COME TO KNOW, IRRESPECTIVE OF WHETHER OR NOT THE CONTRACT IS STILL IN FORCE. 2.5 THE AGENT SHALL OBSERVE THE RULES OF FAIR COMPE TITION AND BE RESPONSIBLE FOR ANY VIOLATION OF THE SAME. 2.6 THE AGENT IS NOT AUTHORIZED TO ACCEPT PAYMENTS DIRECTLY IN THEIR OWN NAME BUT SHALL ASSIST THE PRINCIPAL IN COLLECTING OUTSTANDIN G PAYMENTS. THE AGENT IS ALSO AUTHORIZED TO ACCEPT NOTIFICATION OF DEFECTS BY A C USTOMER, AS WELL AS THE STATEMENT OF A CUSTOMER THAT HE WILL THE GOODS AT THE DISPOSABLE OF THE PRINCIPAL OR ANY SIMILAR STATEMENT BY WHICH THE CUSTOMER EXERCISES HIS RIGHT S RESULTING FROM DEFECTIVE ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 22 DELIVERY. THE AGENT SHALL IMMEDIATELY II PRINCIPAL AND SHALL SEE TO IT THAT THE NECESSARY EVIDENCE IN FAVOUR OF THE PRINCIPAL IS OBTAINED. 2.7 THE AGENT SHALL ESTABLISH BUSINESS RELATIONS ON LY WITH SUCH CUSTOMERS WHOSE SOLVENCY IS SATISFACTORY TO THE BEST OF THE KNOWLED GE AND BELIEF OF THE AGENT. 17. THUS AS CAN BE SEEN FROM THE ABOVE, ALL THE TER MS DO INDICATE THAT THE SAID COMPANY WAS ONLY ACTING AS AN AGENT ON COMMISSION B ASIS AND HAS NOT BEEN PROVIDING ANY MANAGERIAL/TECHNICAL SERVICES. FURTHE R THERE IS NO EVIDENCE ON RECORD THAT THEY ARE PROVIDING ANY TECHNICAL/MANAGERIAL SE RVICES. THE SAID COMPANY WAS RESPONSIBLE FOR ARRANGING TIMELY PAYMENT FROM THE C USTOMERS AND COMMISSION WAS PAID ONLY AFTER THE SALES AMOUNT WAS RECEIVED. SINC E THE SERVICES WERE RENDERED OUTSIDE INDIA, THE PROVISIONS OF SECTION 5 CANNOT B E APPLIED TO THE COMMISSION PAID SO AS TO MAKE IT TAXABLE IN INDIA. 18. THIS ASPECT CAN ALSO BE EXAMINED IN ANOTHER WAY AS ALREADY GIVEN A FINDING BY THE BENCH EARLIER AND WHICH IS ALSO NOT IN DISPUTE, THAT THE FOREIGN COMPANY DOES NOT HAVE ANY PE IN INDIA. THEREFORE, THE COMMISSION PAI D TO THE FOREIGN COMPANY WHICH HAS TO BE CONSIDERED AS BUSINESS INCOME AND CANNOT BE TAXED IN INDIA AS PER THE DTAA BETWEEN INDIA AND UK. THE DEFINITION OF ' FEE FOR TECHNICAL SERVICES ' BETWEEN UK AND INDIA DOES NOT INCLUDE MANAGERIAL SERVICES. HOWEVER, NEITHER THE ASSESSING OFFICER NOR THE CIT (A) CONSIDERED THE ISSUE OF DTA A, EVEN THOUGH ASSESSEE MENTIONED THE SAME IN ITS SUBMISSIONS BEFORE THE AU THORITIES. THE DEFINITION OF TECHNICAL SERVICES AS PER THE INCOME TAX ACT IS AS UNDER: '9.(1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACC RUE OR ARISE IN INDIA: (I)...(II)...(III)....(IV)...(V)...(VI) (VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY (A) THE GOVERNMENT; OR (B) A PERSON WHO IS A RESIDENT, EXCEPT WHERE THE FE ES ARE PAYABLE IN RESPECT OF SERVICES UTILIZED IN A BUSINESS OR PROFESSION CA RRIED ON BY SUCH PERSON OUTSIDE INDIA OR FOR THE PURPOSES OF MAKING OR EARN ING ANY INCOME FROM ANY SOURCE OUTSIDE INDIA ; OR (C) A PERSON WHO IS A NON-RESIDENT, WHERE THE FEES ARE PAYABLE IN RESPECT OF SERVICES UTILIZED IN A BUSINESS OR PROFESSION CARRI ED ON BY SUCH PERSON IN INDIA OR FOR THE PURPOSES OF MAKING OR EARNING ANY INCOME FROM ANY SOURCE IN INDIA : [ PROVIDED THAT NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY I N RELATION TO ANY INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABL E IN PURSUANCE OF AN AGREEMENT MADE BEFORE THE 1ST DAY OF APRIL, 1976, A ND APPROVED BY THE CENTRAL GOVERNMENT.] [ EXPLANATION 1 .FOR THE PURPOSES OF THE FOREGOING PROVISO, AN AGR EEMENT MADE ON OR AFTER THE 1ST DAY OF APRIL, 1976, SHALL BE DEEMED TO HAVE BEEN MADE BEFORE THAT DATE IF THE AGREEMENT IS MADE IN A CCORDANCE WITH PROPOSALS APPROVED BY THE CENTRAL GOVERNMENT BEFORE THAT DATE .] EXPLANATION [2] .FOR THE PURPOSES OF THIS CLAUSE, ' FEES FOR TECHNICAL SERVICES ' MEANS ANY CONSIDERATION ( INCLUDING ANY LUMP SUM CONSIDERATION ) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES ( INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRU CTION ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE U NDER THE HEAD ' SALARIES '. ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 23 19. AS CAN BE SEEN FROM THE ABOVE SECTION 9(1)(VII) (B), FEE PAYABLE FOR THE PURPOSES OF MAKING OR EARNING INCOME FROM ANY SOURCE OUTSIDE INDIA IS NOT INCLUDED IN THE DEFINITION. THE AMOUNT HAS TO BE CONSIDERED AS BUSI NESS INCOME. SINCE THE SERVICES ARE RENDERED OUTSIDE INDIA, THAT AMOUNT IS NOT TAXA BLE AS IT DOES NOT ACCRUE OR ARISE IN INDIA. THE SAME VIEW WAS CONSIDERED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CEAT INTERNATIONAL S.A. VS.CIT 237 ITR 859, WHER E CERTAIN EXPORT COMMISSION WAS PAID TO A NON RESIDENT COMPANY AND IT WAS HELD THAT THE ASSESSEE DID NOT IMPART ANY INFORMATION CONCERNING TECHNICAL, INDUSTRIAL, C OMMERCIAL OR SCIENTIFIC KNOWLEDGE EXPORTS OR SKILL, NOR RENDERED ANY MANAGERIAL TECHN ICAL OR CONSULTANCY SERVICES. THE COMMISSION ATTRIBUTABLE TO THE SERVICES RENDERED CA NNOT BE REGARDED AS ROYALTY OR FEES FOR TECHNICAL SERVICES AND IT WAS HELD THAT TH E SAME WAS NOT TAXABLE UNDER SECTION 9(1)(VII). SIMILAR ISSUE WAS ALSO CONSIDERE D BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. SHERATON INT ERNATIONAL INC. 313 ITR 267 WHERE CERTAIN PAYMENTS FOR ADVERTISING, PUBLICITY AND SAL ES PROMOTION SERVICES WERE CONSIDERED AND HELD THAT THOSE PAYMENTS CANNOT BE C ONSIDERED AS EITHER ROYALTY OR FOR TECHNICAL SERVICES. SINCE THE NON RESIDENT DOES NOT HAVE ANY PE IN INDIA, SUCH INCOME WHICH IS TO BE CONSIDERED AS BUSINESS INCOME WAS NOT TAXABLE IN INDIA. 41. WE ARE IN CONSIDERED AGREEMENT WITH THE VIEWS S O EXPRESSED BY THE COORDINATE BENCH. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE UPHOLD WELL REASONING FINDINGS OF THE LEARNED CIT(A) THAT THE C OMMISSION PAYMENTS MADE TO THE NON RESIDENT AGENTS DID NOT HAVE ANY TAXABILITY IN INDI A, EVEN UNDER THE PROVISIONS OF THE DOMESTIC LAW I.E. SECTION 9. ONCE WE COME TO THE CONCLUSION THAT THE INCOME EMBEDDED IN THESE PAYMENTS DID NOT HAVE ANY TAX IMPLICATIONS IN INDIA , NO FAULT CAN BE FOUND IN NOT DEDUCTING TAX AT SOURCE FROM THESE PAYMENTS OR, FOR THAT PURPOSE, EVEN NOT APPROACHING THE ASSESSING OFFICER FOR ORDER UNDER SECTION 195. IN OUR CONSIDE RED VIEW, THE ASSESSEE, FOR THE DETAILED REASONS SET OUR ABOVE, DID NOT HAVE TAX WITHHOLDING LIABILITY FROM THESE PAYMENTS. AS HELD BY HONBLE SUPREME COURT IN THE CASE OF GE INDIA TECHN OLOGY CENTRE PVT LTD VS CIT [(2010) 327 ITR 456 (SC)], PAYER IS BOUND TO WITHHOLD TAX F ROM THE FOREIGN REMITTANCE ONLY IF THE SUM PAID IS ASSESSABLE TO TAX IN INDIA. THE ASSESSEE CA NNOT, THEREFORE, BE FAULTED FOR NOT APPROACHING THE ASSESSING OFFICER UNDER SECTION 195 EITHER. AS REGARDS THE WITHDRAWAL OF THE CBDT CIRCULAR HOLDING THAT THE COMMISSION PAYMENTS TO NON RESIDENT AGENTS ARE NOT TAXABLE IN INDIA, NOTHING REALLY TURNS ON THE CIRCULAR, AS DE HORS THE AFORESAID CIRCULAR, WE HAVE ADJUDICATED UPON THE TAXABILITY OF THE COMMISSION A GENTS INCOME IN INDIA IN TERMS OF THE PROVISIONS OF THE INCOME TAX ACT AS ALSO THE RELEVA NT TAX TREATY PROVISIONS. 42. IN VIEW OF THESE DISCUSSIONS, WE UPHOLD THE REL IEF GRANTED BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. WE ADOPT THE ABOVE DETAILED REASONING MUTATIS MUTANDIS TO HOLD THAT SINCE THE ASSESSEES COMMISSION PAYMENTS MADE TO THE OVER SEAS COMMISSION AGENTS ARE NOT TAXABLE IN INDIA, THE ASSESSEE HAD R IGHTLY NOT DEDUCTED TDS THEREUPON. WE ACCORDINGLY DECLINE THE REVENUES INS TANT FORMER SUBSTANTIVE GRIEVANCE. 4. NEXT COMES REVENUES LATTER SUBSTANTIVE GROUND T HAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ASSESSEE S EMPLOYEES CONTRIBUTION OF PF & ESI AMOUNTING TO 7,23,540/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LATE PAYMENT THEREOF. IT EMERGES DURING THE COU RSE OF HEARING THAT THE ITA NO.1354/KOL/2019 A.Y. 2013-14 DCIT, CIR-2(2), KOL. VS. M/S SHALIMAR WI RES INDUSTRIES LTD. PAGE 24 ASSESSEE HAD ALREADY PAID THE IMPUGNED SUM WELL WIT HIN DUE DATE OF FILING ITS RETURN U/S. 139(1) OF THE ACT. HON'BLE JURISDICTION AL HIGH COURTS DECISION IN COMMISSIONER OF INCOME TAX VS. M/S VIJAY SHREE LTD. ITAT NO. 245 OF 2011 , G.A. NO.2607 OF 2011 DATED 07.11.2011 HOLDS THAT TH E IMPUGNED DISALLOWANCE DOES NOT APPLY IN CASE THE ASSESSEE PAYS THE EMPLOY EES CONTRIBUTION TO PF & ESI BEFORE THE DUE DATE OF FILING RETURN U/S.139(1) OF THE ACT. WE THEREFORE AFFIRM THE CIT(A)S ACTION QUA THIS LATTER ISSUE AS WELL. 5. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 23/ 12/2019 SD/- SD/- ( &) (( &) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP )- 23 / 12 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIRCLE-2(2), R.NO. 24, 7 TH FLOOR, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQU ARE, KOLKATA-700 069 2. /RESPONDENT-M/S SHALIMAR WIRES INDUSTRIES LTD., 25, G.C.AVENUE, KOLKATA-23 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. ((4, 4, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ 4,