ASST CIT 19(3), MUMBAI V. S.K. AGE EXPORTS, MUMBAI

ITA 2524/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1337 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MOHAN DR
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Double taxation relief; Services rendered outside India; Deemed to accrue or arise in india; Additional evidence; Permanent establishment; Advance ruling
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, J MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO.2524/MUM/2017 ASSESSMENT YEAR: 2013-14 ACIT-19(3), R. NO.206M 2 ND FLOOR, MATRU MANDIR, TARDEO RAOD, MUMBAI-400007 / VS. M/S S.K. AGE EXPORTS, 3-A, SHIVSAGAR ESTATE, DR. ANNIE BESANT ROAD, WORLI, MUMBAI-400018 ( !'# $ /ASSESSEE) ( / REVENUE) PAN. NO . AAAFS4534R % & $ ' / DATE OF HEARING : 21/08/2018 & $ ' / DATE OF ORDER: 21/08/2018 ! / REVENUE BY SHRI A. MOHAN- DR !'# $ ! / ASSESSEE BY SHRI HARI S. RAHEJA ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 2 / O R D E R PER JOGINDER SINGH(JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 16/01/2017 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, DELETING THE ADDITION OF RS.2,41,19,422/- TOWARDS P AYMENT MADE FOR EXPORT COMMISSION TO NON-RESIDENT ON WHICH NO TDS WAS MADE AND THUS DEFAULT UNDER SECTION 195 OF THE ACT WAS COMMITTED, AS THE NON-RESIDENT HAD DIRECT BUSINESS NEXUS WITH THE SALES OF THE ASSESSEE FIRM, WHICH IS ALSO ELABORATED IN ARTICLE-12 OF DTAA AGREEMENT. 2. DURING HEARING, AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE, SHRI HARIS S. RAHEJA, CLAIMED THAT THE IM PUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL FO R ASSESSMENT YEAR 2009-10 TO 2011-12 (ITA NO.3348, 3349 AND 5445/MUM/2014) ORDER DATED 25/11/2016, WHICH WAS FOLLOWED IN ITA NO.2702/MUM/2016 FOR ASSESSMENT YEA R 2012-13, ORDER DATED 20/03/2018 IN THE CASE OF THE ASSESSEE. ON THE OTHER HAND, SHRI A. MOHAN, LD. DR, THOUGH DE FENDED THE ADDITION MADE BY THE LD. ASSESSING OFFICER BUT DID NOT CONTROVERT THE FACTUAL MATRIX THAT THE ISSUE IN HAN D IS COVERED BY THE DECISIONS OF THE TRIBUNAL AS CLAIMED BY THE ASSESSEE. ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 3 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE AFORESAID ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2012-13(ORDER DATED 20/03/2018) FOR READY REFERENCE AND ANALYSIS:- THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 25.01.2016, OF THE FIRST APPELLATE AUTHORITY, ON TH E GROUND OF NON-APPRECIATION OF FACT THAT THE ASSESSEE WAS LIAB LE TO DEDUCT TAX ON THE SERVICES RENDERED BY THE NON-RESIDENT PARTIE S. 2. DURING THE HEARING, MS. ARJU GARODIA, LD. SR. D. R. DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER BY INVIT ING OUR ATTENTION TO RE-OBSERVATIONS MADE IN THE ASSESSMENT ORDER AND REITERATED THE GROUND RAISED BEFORE US. ON THE OTHE R HAND, SHRI HARI S. RAHEJA, THE LD. COUNSEL FOR THE ASSESSEE CL AIMED THAT THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL FOR ASSESSMENT YEAR 2009-1 0 (ITA NO. 3348, 3349 & 5445/MUM./2014) ORDER DATED 25.11.2016 . THE LEARNED D.R. DID NOT CONTROVERT THE CLAIM OF THE AS SESSEE AND MERELY DEFENDED THE ASSESSMENT ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE, WE ARE REPRODUCING HEREUNDER THE AFORESAID ORDER OF THE TR IBUNAL DATED 25.11.2016 FOR READY REFERENCE AND ANALYSIS:- THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)- MUMBAI, FOR THE ASSESSMENT YEARS 2009-10, 2010-11 & 2011-12, IN THE MATTER OF ORDER PASSED U/S.143(3) OF I.T. ACT. 2. COMMON GRIEVANCE OF THE REVENUE IN ALL THE YEARS PERTAINS TO DELETING DISALLOWANCE MADE ON ACCOUNT OF PAYMENT MA DE FOR EXPORT COMMISSION ON WHICH NO TDS WAS DEDUCTED AND ASSESSE E WAS FOUND TO BE IN DEFAULT BY THE AO U/S.195 OF THE I.T.ACT. THE DISALLOWANCE SO MADE BY THE AO WAS DELETED BY THE CIT(A) AFTER HAVING FO LLOWING OBSERVATION :- 2.4.6 NOW I PROCEED TO ADJUDICATE ON THE MERITS OF THE CASE. FROM THE FACTS SUBMITTED, IT IS APPARENT THAT THE ISSUE IN QUESTION WAS OF PAYMENT TO A NON-RESIDENT BY WAY OF EXPORT COMMISSI ON FOR SERVICES RENDERED OUTSIDE INDIA ON WHICH PAYMENTS A RE REMITTED DIRECTLY ABROAD AND AS SUCH NO TAX WAS REQUIRED TO BE DEDUCTED U/S. 195 OF THE ACT. THE NON-RESIDENT DID NOT HAVE ANY BUSINESS CONNECTION OR DEPENDENT AGENT IN INDIA AND THE AMOU NT PAID WAS ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 4 NOT THROUGH OR FROM ANY PROPERTY, ASSET OR SOURCE O F INCOME IN INDIA. AS SUCH, THE AMOUNT PAID IS NOT INCOME WHICH IS CHARGEABLE UNDER THE PROVISIONS OF THE ACT AND HENCE, NO TAX W AS DEDUCTIBLE THEREFROM. 2.4.7 I AM FORTIFIED IN THE ABOVE VIEW BY THE DECIS ION OF THE HON'BLE ITAT IN THE CASE OF ARMAYESH GLOBAL VS. ACIT, (2011 ) 45 SOT 69 (MUM) (URO) DATED 23-02-2011 WHERE IT HAS BEEN HELD AS UNDER: 'THE OVERSEAS AGENT DID NOT RENDER ANY SERVICES IN INDIA. IT HAD NO PLACE OR PERMANENT ESTABLISHMENT IN INDIA. IT WORKE D ABROAD AND PROCURED ORDERS. THE ORDERS WERE SENT DIRECTLY BY THE FOREIGN PURCHASERS REMITTED TO THE ASSESSEE IN INDIA AND EV EN THE PAYMENT FOR EXPORT WAS RECEIVED BY THE ASSESSEE IN FOREIGN CURRENCY DIRECTLY FROM FOREIGN PURCHASERS AND THE COMMISSION WAS PAID TO FOREIGN AGENT THEREAFTER AS A PERCENTAGE OF SALES IN TERMS OF THE AGENCY AGREEMENT. THE PAYMENT MADE TO OVERSEAS COMMISSION AGENT BY THE ASSESSEE WAS NOT FOR TECHNICAL/MANAGERIAL SERVI CES. THEREFORE, IN THE ABSENCE OF ANY SERVICE HAVING BEEN RENDERED IN INDIA, NO PART OF THE COMMISSION PAID TO THE OVERSEAS AGENT C OULD BE SAID TO BE CHARGEABLE IN INDIA AND IN THE ABSENCE OF ANY IN COME CHARGEABLE TO TAX IN INDIA, QUESTION OF APPLYING SE CTION 195 DID NOT ARISE. [PARA 14]' 2.4.8 DURING THE COURSE OF APPELLATE PROCEEDINGS, T HE LD. AR ALSO STATED THAT THE APPELLANT'S CASE WAS COVERED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. EON TECH. 343 ITR 366 WHERE TOO PAYMENTS WERE MADE BY WAY OF COMMISSI ON ON EXPORT ORDERS. AFTER REFERRING TO VARIOUS DECISIONS OF THE HON'BLE SUPREME COURT, IT WAS HELD THAT THERE WAS NO BUSINE SS CONNECTION AND HENCE, THE COMMISSION INCOME DID NOT ACCRUE IN INDIA AND WAS NOT LIABLE TO TAX IN INDIA. WHILE DECIDING THE ABOV E CASE, AMENDMENT TO SECTION 9(1 )(I) WAS ALSO REFERRED TO. 2.4.9 HAVING CONSIDERED THE ENTIRE GAMUT OF FACTS A S ALSO THE CASE LAWS CITED IN RESPECT OF THE EXPORT COMMISSION, I F IND THAT HON'BLE SUPREME COURT IN THE CASE OF G.E. INDIA TECHNOLOGY CENTRE PVT. LTD., 327 ITR 456 (SC) HELD THAT A PERSON PAYING IN TEREST OR ANY SUM TO A NON-RESIDENT IS NOT LIABLE TO DEDUCT TAX I F SUCH SUM IS NOT CHARGEABLE TO TAX UNDER THE INCOME TAX ACT, 1961. I T FURTHER HELD THAT IF THE CONTENTION OF THE DEPARTMENT THAT THE M OMENT THERE IS REMITTANCE, THE OBLIGATION TO PAY TAX ARISES IS TO BE ACCEPTED, THEN THE WORDS 'CHARGEABLE UNDER THE PROVISIONS OF THE A CT' IN SECTION 195(1) WOULD STAND OBLITERATED. 2.4.10 IN THE CASE OF ADIDAS SOURCING LTD. (2012) 2 8 TAXMANN.COM 267 (DEL-TRIB) IT WAS HELD THAT INCOME FROM SERVICE S RENDERED BY ASSESSEE NON-RESIDENT COMPANY TO RESIDENT COMPANY F OR SOURCING OF GOODS FROM OUTSIDE INDIA WAS COMMISSION AND NOT FEES FOR TECHNICAL SERVICES. SIMILARLY, IN THE CASE OF ANGEL IQUE INTERNATIONAL LTD. (2012) 28 TAXMANN.COM 219 (DEL-TRIB) IT WAS HE LD THAT EXPORT COMMISSION PAID TO A NON-RESIDENT AGENT FOR SERVICE S RENDERED OUTSIDE INDIA WAS NOT CHARGEABLE TO TAX IN INDIA. ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 5 2.4.11. A SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE H ON'BLE MUMBAI BENCH OF ITAT IN THE CASE OF WNS GLOBAL SERVICES (U K) LTD. (2013) 40 TAXMANN.COM 315 (MUM-TRIB) WHERE VIDE ORDER DATE D 31-07- 2013, IT WAS HELD THAT EVEN IF MARKETING SERVICES W AS ATTRIBUTABLE TO SERVICE PE IN INDIA, AS THE SERVICES IN QUESTION WE RE RENDERED OUTSIDE INDIA, INCOME OF SUCH SERVICES COULD NOT BE SAID TO HAVE ACCRUED OR ARISEN TO THE ASSESSEE OR DEEMED TO HAVE ACCRUED OR ARISEN TO THE ASSESSEE IN INDIA AND HENCE, EXISTENC E OF SERVICE PE IN INDIA WOULD NOT MAKE IT TAXABLE UNDER ARTICLE 7 OF INDO-US DTAA. 2.4.12 IT IS UNDISPUTED THAT THE PAYMENTS WHICH HAV E BEEN MADE TO THE NON-RESIDENTS WERE IN RESPECT OF EXPORT COMMISS ION. FURTHER, THESE NON-RESIDENTS DO NOT HAVE ANY PERMANENT ESTAB LISHMENT IN INDIA. AS THE SERVICES WERE RENDERED IN RESPECT OF PROCUREMENT OF EXPORT ORDERS OUTSIDE INDIA, THE APPELLANT WAS NOT OBLIGED TO DEDUCT ANY TAX ON THE COMMISSION SO PAID. 2.4.13 SIMILARLY, IN A RECENT DECISION IN THE CASE OF GUJARAT RECLAIM & RUBBER PRODUCTS VS. ACIT, (2013) 35 TAXMANN.COM 5 87 (MUM- TRIB) VIDE THEIR ORDER DATED 19-04-2013, HON'BLE IT AT MUMBAI BENCH HAS HELD AS UNDER: 'SECTION 9, READ WITH SECTION 40(A)(I) AND 195 OF T HE I. T.ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA (COMMIS SION) - ASSESSMENT YEARS 2007-08 TO 2008-09 - WHETHER WHERE ASSESSEE PAID COMMISSION TO NON-RESIDENT AGENT OUTSIDE INDIA FOR SERVICES PROVIDED IN FOREIGN COUNTRIES, IN ABSENCE OF PE OF NON-RESIDENT AGENT IN INDIA SAID PAYMENT WOULD NOT BE CHARGEABLE TO' TAX IN INDIA HENCE, NO DISALLOWANCE U/S. 40(A)(I) CAN BE MADE - HELD, YES [PARA 4.6J [IN FAVOUR OF ASSESSEE].' 2.4.14 EARLIER, THE HON'BLE BOMBAY HIGH COURT IN TH E CASE OF CEAT INTERNATIONAL, 237 ITR 859 HAS HELD THAT COMMISSION SERVICES BY A FOREIGN AGENT DID NOT IMPART ANY INFORMATION CONCER NING TECHNICAL, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC KNOWLEDGE, EXP ERIENCE OR SKILL NOR DID HE RENDER ANY MANAGERIAL, TECHNICAL, CONSUL TANCY SERVICE AND HENCE COMMISSION ATTRIBUTABLE TO SERVICES RENDE RED CANNOT BE REGARDED AS ROYALTY OR FEES FOR TECHNICAL SERVICES CHARGEABLE U/S. 9(1 )(VI) OR (VII). 2.4.15 THE JAIPUR ITAT IN THE CASE OF MODERN INSULA TOR LTD (2011) 10 ITR 147 HAS HELD THAT NON-RESIDENT AGENCY COMPAN IES HAVE NOT MADE AVAILABLE ANY TECHNICAL OR MANAGERIAL SERVICE AND HENCE COMMISSION PAID FOR SUCH COMPANIES IS A BUSINESS PR OFIT AND NOT TECHNICAL SERVICES. 2.4.16 THE MUMBAI ITAT IN THE CASE OF ARDESHI AND C URSTEJEE & SONS LTD. (2008) 7 DTR 51 HAS HELD THAT THE FOREIGN AGENTS RIGHT TO RECEIVE THE COMMISSION IS ACQUIRED AS AND WHEN SERV ICES ARE RENDERED. SINCE SERVICES ARE RENDERED ABROAD, THE R IGHT TO RECEIVE THE COMMISSION IS CONSEQUENTIALLY ACQUIRED OUTSIDE INDIA. THE ACCRUAL OF INCOME IS ALSO OUTSIDE INDIA. HENCE THE COMMISSION INCOME OF FOREIGN AGENT PAID BY INDIAN EXPORTER IS NOT CHARGEABLE TO TAX IN INDIA. ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 6 2.4.17 FURTHER BY WAY OF EXPLANATION I, CLAUSE (A) S.9(1) CLARIFIES THAT IN THE CASE OF A BUSINESS OF WHICH ALL THE OPE RATIONS ARE NOT CARRIED OUT IN INDIA, THE INCOME OF THE BUSINESS DE EMED UNDER THIS CLAUSE TO ACCRUE OR ARISE IN INDIA SHALL BE ONLY SU CH PART OF THE INCOME AS IS REASONABLY ATTRIBUTABLE TO THE OPERATI ONS CARRIED OUT IN INDIA. 2.4.18 HENCE IF NO OPERATIONS ARE CARRIED OUT IN IN DIA BY THE NON- RESIDENT, THEN THERE WOULD BE NO INCOME DEEMED TO A CCRUE OR ARISE IN INDIA. THE INCOME OF THE NON- RESIDENT CAN BE CO NSIDERED AS DEEMED TO ACCRUE OR ARISE IN INDIA ONLY IF THE NON- RESIDENT IS HAVING BUSINESS CONNECTION IN INDIA. 2.4.19 THE TERM BUSINESS CONNECTION IS ELABORATED I N EXPLANATION 2 TO S. 9(1) OF THE ACT, AND IS DISCUSSED IN DEPTH BY THE APEX COURT IN THE CASE OF R. O. AGGARWAL & COMPANY. (1965) 56 ITR 20. 2.4.20 THE APEX COURT IN THE CASE OF TOSHOKU LTD. ( 1980) 125 ITR 525 HAS HELD THAT THE COMMISSION AMOUNTS WHICH WERE EARNED BY THE NON-RESIDENT ASSESSEES FOR SERVICES RENDERED OU TSIDE INDIA CANNOT BE DEEMED INCOME ACCRUED OR ARISEN IN INDIA. 2.4.21 THE MADRAS ITAT IN THE CASE OF INDOPEL GARME NTS PVT. LTD. (2003) 86 ITO 102 REFERRED THE CASE OF TOSHOKU LTD. AND HELD THAT WHERE THE FOREIGN AGENT IS MERELY CANVASSING ORDERS OUTSIDE INDIA AND NO SERVICE IS RENDERED BY IT WITHIN THE TAXABLE TERRITORY, THE AMOUNT OF SALES COMMISSION WAS NOT LIABLE TO TAX IN INDIA. THE FOREIGN AGENT DOES NOT HAVE ANY BUSINESS CONNECTION IN INDIA AND HENCE HIS INCOME IS NOT DEEMED TO ACCRUE OR ARISE I N INDIA. 2.4.22 IN THE CASE OF IND TELESOFI PVT. LTD (2004) 267 ITR 725, THE AUTHORITY FOR ADVANCE RULINGS HELD THAT COMMISSION AND RETAINER FEES RECEIVED BY NON RESIDENT AGENT FROM INDIAN EXP ORTERS IS NOT TAXABLE IN INDIA. IN THE SAID CASE, ASSESSEE WAS EN GAGED IN THE BUSINESS OF PROVIDING SOFTWARE SOLUTIONS FOR TELECO M INDUSTRY. IT ENTERED INTO AGREEMENT WITH THREE NON- RESIDENTS FR OM THREE DIFFERENT COUNTRIES VIZ . FRANCE, CANADA AND USA, F OR SECURING BUSINESS FROM OUTSIDE INDIA. THE ASSESSEE AGREED TO PAY RETAINER FEES AND COMMISSION TO NON RESIDENT AGENTS. IN ABSE NCE OF THE NON RESIDENT AGENTS HAVING ANY BUSINESS CONNECTION IN I NDIA, IT WAS HELD THAT THE INCOME OF THE NON RESIDENTS WAS NOT T AXABLE IN INDIA. 2.4.23 ITAT IN ALLIED NIPPON LIMITED (OEL-TRIB) THE FACTS WERE THAT THE EXPORT COMMISSION WAS PAID TO THE NON-RESIDENT WHO RENDERED THE SERVICES OUTSIDE INDIA FOR THE PURPOSE OF PROCU RING THE ORDER AND PURSUING THE PAYMENT FROM THE FOREIGN BUYER. IT WAS REPRESENTED THAT SINCE NO SERVICES WERE RENDERED IN INDIA, THE INCOME OF THE FOREIGN AGENT TO WHOM THE COMMISSION WAS PAID DID NOT ACCRUE OR ARISE IN INDIA, THEREFORE, THE ASSESS EE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE. CONSEQUENTLY, THE DISALLOW ANCE UNDER SECTION 40(A)(I) IS NOT CALLED FOR. THE ITAT RELYIN G ON DCIT VS EON TECHNOLOGY PVT. LTD. 46 SOT 323 HELD IN FAVOUR OF T HE ASSESSEE. ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 7 2.4.24 IN VIEW OF THE ABOVE FACTUAL AND LEGAL ANALY SIS, I HAVE NO HESITATION IN HOLDING THAT THE EXPORT COMMISSION PA ID OUTSIDE INDIA FOR SERVICES RENDERED OUTSIDE INDIA WAS NOT LIABLE FOR DEDUCTION OF TAX AND CONSEQUENTLY, NO DISALLOWANCE SHOULD BE MAD E TOWARDS THE SAME. IN ANY CASE, THE LD. AO HAS NOT DOUBTED THE V ERACITY OF THE PAYMENT. ACCORDINGLY, GROUND NOS 1 TO 3 ARE ALLOWED . 3. IT IS CLEAR FROM THE ORDER OF THE CIT(A) THAT AF TER RELYING ON THE VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING HONBLE S UPREME COURT AND MUMBAI TRIBUNAL, THE CIT(A) FOUND THAT EXPORT COMMI SSION PAID OUTSIDE INDIA ON SERVICE RENDERED OUTSIDE INDIA WAS NOT LIA BLE TO DEDUCTION OF TAX AT SOURCE, CONSEQUENTLY NO DISALLOWANCE IS WARRANTED. 4. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW AND FOUND THAT ISSUE IS SQUARELY COVERED BY THE VARIOUS DECISIONS OF HONBLE SUPREME COURT, HIGH COURT AND VARIOUS TRIBUNAL AS DISCUSSED BY CIT(A) IN HIS ORDER. LD. DR ALSO FAIRLY CONCEDED THAT ISSU E IS COVERED BY VARIOUS ORDERS OF THE TRIBUNAL, HIGH COURT AND HONBLE SUPR EME COURT AS DISCUSSED BY CIT(A). ACCORDINGLY, WE DO NOT FIND AN Y REASON TO INTERFERE IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE M ADE ON ACCOUNT OF EXPORT COMMISSION PAID WITHOUT DEDUCTION OF TAX AT SOURCE. 5. IN THE ASSESSMENT YEAR 2009-2010 & 2010-2011, TH E REVENUE HAS ALSO TAKEN A GROUND WITH REGARD TO DELETING DISALLO WANCE ON ACCOUNT OF MARK TO MARKET LOSS OF RS.7,71,555/-. 6. WE HAVE GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW AND FOUND THAT THE AO HAS DISALLOWED RS.7,71,555/- OUT OF FOR EIGN EXCHANGE LOSS ON ACCOUNT OF SUNDRY CREDITORS OUTSTANDING AS ON 31-03 -2009. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED AN AD DITIONAL EVIDENCE WHICH WAS FORWARDED TO THE LD. AO AND AFTER VERIFIC ATION, THE SAME HAS BEEN ACCEPTED BY HER IN HER REMAND REPORT DATED 23- 10-2013 WHICH READS AS UNDER: 'IN THIS CASE, THE ASSESSMENT ORDER U/S. 143(3) OF THE I. T. ACT, 1961 HAD BEEN PASSED ON 30.12.2011 AFTER DETERMININ G TOTAL INCOME AT RS.2,43,86,380/-. DURING THE ASSESSMENT P ROCEEDING THE A.O. WHILE ASSESSING THE INCOME AT RS. 2,43,86,380/ - DISALLOWED RS. 7,71,555/- LOSS ON ACCOUNT OF SUNDRY CREDITORS. THE AO HAS ADDED RS.1,01,42,806/- FOR PAYMENT TO THE NON-RESID ENT WITHOUT DEDUCTING OF THE TDS, 1,06,908/- FOR PAYMENT OF LEG AL AND PROFESSIONAL TO MR. VISHAL J. KAPOOR WITHOUT DEDUCT ING THE TDS AND RS. 34,775/- ON ACCOUNT OF PATTY CASH EXPENSE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE VID E ORDER SHEET DTD. 21. 11.2011 WAS ASKED TO PROVIDE DETAILS OF FO REIGN EXCHANGE LOSSES CLAIMED. THE AR APPEARED ON 31.12.2011 AND S UBMITTED THE DETAILS. HOWEVER, THE AR FAILED TO FURNISH THE SUPP ORTIVE DETAILS REGARDING FOREIGN EXCHANGE LOSS ON ACCOUNT OF SUNDR Y CREDITORS. AS PER DIRECTION GIVEN IN THE LETTER REFERRED ABOVE , THE ASSESSEE VIDE LETTER DATED 22.07.2013 WAS GIVEN AN OPPORTUNI TY TO BE HEARD AND SUBMIT THE RELEVANT DETAILS DOCUMENTS SUPPORTIN G HIS CLAIM. IN RESPONSE TO THE SAID LETTER, THE ASSESSEE HAS NOT S UBMITTED ANY NEW DETAILS. ON GOING THROUGH THE DETAILS SUBMITTED BY THE ASSESSEE DURING THE APPELLATE PROCEEDING, IT IS FOU ND THAT THE ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 8 ASSESSEE HAS FILED DETAILS OF FOREIGN EXCHANGE LOSS ON SUNDRY CREDITORS AMOUNTING TO RS.7,71,555/- AS AN ADDITION AL EVIDENCE (PG. 103 TO 125 OF DETAILS SUBMITTED IN YOUR OFFICE) AND EXPLAINED THE SAME. THE REMAINING DETAILS HAS BEEN ALREADY SUBMIT TED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND THER E IS NO ADDITIONAL EVIDENCE SUBMITTED WITH REGARD TO OTHER ISSUES. IN VIEW OF THE ABOVE FACTS, THE APPEAL MAY KINDLY B E DECIDED ON MERITS. 7. AS THE AO HAS ALREADY VERIFIED THE LOSS AND TREA TED IT AS EXPENDITURE, THE CIT(A) ALLOWED ASSESSEES GROUND. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) INSOFAR AS IN THE REMAND REPORT ITSELF THE AO HAS VERIFIED ASSESSEES LOSS SO CLAIMED AND FOUND T HE SAME TO BE EXPLAINED. WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF CIT(A). 8. IN THE ASSESSMENT YEAR 2009-2010, THE REVENUE IS ALSO AGGRIEVED FOR DELETING THE DISALLOWANCE OF RS.72,970/- PAID F OR PROFESSIONAL AND TECHNICAL SERVICES WITHOUT DEDUCTION OF TAX AT SOUR CE. 9. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND T HAT OUT OF THE SUM PAID AMOUNTING TO RS.1,06,908/-, RS.72,980/- RELAT ED TO REIMBURSEMENT OF EXPENSES IN THE FORM OF DOCUMENT ATTESTATION FEES, TRANSLATION CHARGES ETC. AND HENCE, TDS WAS NOT REQUIRED TO BE MADE. HOWEVER , AS REGARDS THE BALANCE SUM OF RS.34,000/- WHICH WERE IN THE NATURE OF PROFESSIONAL CHARGES, TDS WAS REQUIRED TO BE MADE. BY CONSIDERIN G THE NATURE OF PAYMENT VIS--VIS REIMBURSEMENT THE CIT(A) CONFIRME D THE ADDITION OF RS.34,000/-, WHEREAS DELETED THE ADDITION OF RS.72, 970/-, WHICH WAS TOWARDS REIMBURSEMENT OF EXPENSES. WE DO NOT FIND A NY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING DISALLOWANCE OF RS.72, 980/-. 10. IN THE RESULT ALL APPEALS OF THE REVENUE ARE DI SMISSED. WE FIND THAT IN THE AFORESAID ORDER THE TRIBUNAL H AS DULY CONSIDERED THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2009-10 TO 2011-12, ON IDENTICAL FACTS / ISSUES AND CONSIDERIN G THE DECISION OF THE TRIBUNAL IN THE CASE OF AMAYESH GLOBAL V/S ACIT , {2011) 45 SOT 69 (MUM.) (URO) ORDER DATED 23.11.2011, ALONG WITH OTHER DECISIONS INCLUDING FROM HON'BLE APEX COURT IN G.E. INDIA TEC HNOLOGY CENTRE PVT. LTD. 327 ITR 456 (SC) AND VARIOUS OTHER DECISI ONS, CONTAINED IN THE AFORESAID ORDER FOUND THAT THE EXPORT COMMISSIO N WAS PAID OUTSIDE INDIA ON THE SERVICES RENDERED OUTSIDE INDI A, THEREFORE, THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE, CO NSEQUENTLY, NO DISALLOWANCE WAS WARRANTED. FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESULTANTLY, THE APPEAL OF THE REVENUE IS HAVING NO MERIT, CONSEQUENTLY, DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 9 WE FIND THAT IN THE AFORESAID ORDER, THE TRIBUNAL H AS FOLLOWED THE ORDER OF THE TRIBUNAL DATED 25/11/2016, AS CANV ASSED BY THE LD. COUNSEL FOR THE ASSESSEE AND VARIOUS OTHER DECISIONS INCLUDING FROM HON'BLE APEX COURT IN G.E. INDIA TEC HNOLOGY CENTRE PVT. LTD. 327 ITR 456 (SUPREME COURT) AND A NOTHER DECISION OF THE TRIBUNAL IN AMAYESH GLOBAL VS ACIT (2011) 45 SOT 69 (MUM.)(URO), ORDER DATED 23/11/2011, WHEREIN , THE EXPORT COMMISSION PAID OUTSIDE INDIA ON THE SERVICE S RENDERED OUTSIDE INDIA WAS HELD THAT NO TDS IS TO B E DEDUCTED. FOLLOWING THE AFORESAID ORDER OF THE TRIB UNAL AND THE UNCONTROVERTED FINDING OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY, RESULTANTLY; THE APPEAL OF THE REVENUE IS DISMISSED. FINALLY, THE APPEAL OF THE REVENUE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF HEARING ON 21/08/2018. SD/- SD/- ( MANOJ KUMAR AGGARWAL ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER % MUMBAI; ) DATED :21/08/2018 F{X~{T? P.S/. .. ITA NO.2524/MUM/2017 M/S S.K. AGE EXPORTS 10 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT (RESPECTIVE ASSESSEE) 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( + ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI, 5. 34 .$! , 0 +' ! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. ! / BY ORDER, /! (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI