DCIT, CHENNAI V. M/s. Fluidtherm Technology Pvt. Ltd., CHENNAI

ITA 199/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6161 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMOD NANGIA IRS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! '# $% , & #'$ #( BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI VIKAS AWASTHY, JUDICIAL MEMBER # ./ ITA NO. 199/MDS/2014 & ) *) / ASSESSMENT YEAR : 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1), CHENNAI - 600 034. V. M/S FULIDTHERM TECHNOLOGY PVT. LTD., 132, 3 RD MAIN ROAD, INDUSTRIAL ESTATE, AMBATTUR, CHENNAI - 600 058. PAN : AAACF 0874 G (%,/ APPELLANT) (./%,/ RESPONDENT) %, 0 # / APPELLANT BY : SHRI PRAMOD NANGIA, IRS, CIT ./%, 0 # / RESPONDENT BY : SHRI R. VIJAYARAGHAVAN, ADVOCA TE # 1 0 23 / DATE OF HEARING : 22 ND MAY, 2014 45* 0 23 / DATE OF PRONOUNCEMENT : 22 ND MAY, 2014 / O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVA NT ASSESSMENT YEAR IS 2009-10. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE APPELLATE ORDER PASSED BY THE COMMISSI ONER OF INCOME TAX (APPEALS)-II AT CHENNAI, ON 23.9.2013. THE APP EAL ARISES OUT OF 2 I.T.A. NO. 199/MDS/14 THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF TH E INCOME-TAX ACT, 1961. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THE PRES ENT APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING AUT HORITY UNDER SECTION 40(A)(I) TO THE TUNE OF ` 43,82,894/- ON ACCOUNT OF NON DEDUCTION OF TAX AT SOURCE OUT OF AGENCY COMMISSION PAYMENTS MADE BY THE ASSESSEE TO ITS NON-RESIDENT AGENT. 3. IN THE PRESENT CASE, THE COMMISSION PAYMENTS WER E MADE BY THE ASSESSEE TO ITS NON-RESIDENT AGENT FOR PROCU RING EXPORT ORDERS. THE NON-RESIDENT AGENT DOES NOT HAVE ANY P ERMANENT ESTABLISHMENT IN INDIA OR ANY BUSINESS CONNECTION I N INDIA. ALL THE SERVICES RENDERED BY THE NON-RESIDENT AGENT WERE OU TSIDE INDIA. THE PAYMENTS WERE ALSO MADE OUTSIDE INDIA. IN THES E CIRCUMSTANCES, THE COMMISSIONER OF INCOME TAX (APPE ALS) RELIED ON THE DECISIONS OF ITAT, CHENNAI RENDERED IN THE C ASE OF M/S FARIDA SHOES PVT. LTD. (I.T.A. NO.159/MDS/2013 DATE D 11.4.2013) AND M/S DELTA SHOES PVT. LTD. (I.T.A. NO.909/MDS/20 13 DATED 31.7.2013). THE COMMISSIONER OF INCOME TAX (APPEAL S) FOUND THAT THE FACTS OF THE PRESENT CASE ARE EXACTLY SIMILAR T O THE FACTS OF THE CASES DECIDED BY THE TRIBUNAL AND HELD THAT THE ASS ESSEE WAS NOT 3 I.T.A. NO. 199/MDS/14 LIABLE FOR MAKING TDS AGAINST THE PAYMENTS OF THE C OMMISSION MADE TO NON-RESIDENT AGENT. 4. WE AGREE WITH THE FINDINGS OF THE COMMISSIONER O F INCOME TAX (APPEALS). WHEN THE NON-RESIDENT AGENT HAS REN DERED ALL SERVICES OUTSIDE INDIA AND PAYMENTS WERE ALSO RECEI VED OUTSIDE INDIA, HAVING NO PE OR BUSINESS CONNECTION IN INDIA , THERE IS NO REASON TO HOLD THAT THE FOREIGN AGENT HAS EARNED AN Y TAXABLE INCOME IN INDIA OUT OF THE COMMISSION PAID BY THE A SSESSEE. WHERE NO SUCH TAX LIABILITY IS FASTENED ON THE PAYEE WHO RECEIVED THE COMMISSION, THERE IS NO OBLIGATION ON THE PART OF T HE PAYER TO DEDUCT THE TAX IN INDIA. 5. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN AT THE TIME OF HEARI NG ON THURSDAY, THE 22 ND OF MAY, 2014 AT CHENNAI. SD/- SD/- ( '# $% ) ( ... ) (VIKAS AWASTHY) (DR. O.K. NARAYANAN) & #'$ /JUDICIAL MEMBER /VICE-PRESIDENT /CHENNAI, H' /DATED, THE 22 ND MAY, 2014. KRI. 4 I.T.A. NO. 199/MDS/14 'I 0 .&2J' K'*2 /COPY TO: 1. %, /APPELLANT 2. ./%, /RESPONDENT 3. 1 L2 () /CIT(A)-II, CHENNAI 4. 1 L2 /CIT-II, CHENNAI 5. 'MN .&2& /DR 6. N) O /GF.