The ACIT, Surendranagar Circle, RAJKOT-GUJARAT V. M/s. Rimtex Industries, Surendranagar

ITA 315/RJT/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0516 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 01-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH PANDEY
• Assessee Lawyers: DM RINDANI
• Keywords: Capital asset; Services rendered outside India; Deemed to accrue or arise in india; Retrospective amendment; Permanent establishment
• Section: 143(3)

Judgement Text

ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] ITA NO. 315 /RJT/2013 ASSESSMENT YEAR: 20 10 - 11 ASSISTANT COMMISSIONER OF INCOME TAX, ....... .. . ..... APPELLANT SURENDRANAGAR CIRCLE, SURENDRANA GAR. VS. RIMTEX INDUSTRIES, ....... ..................RESPONDENT PLOT NO.1514, PHASE - IV, G.I.D.C., WADHWAN CITY, DIST. SURENDRANAGAR . [PAN A A C F R 1934 J ] APPEARANCES BY: YOGESH PANDEY FOR THE A PPELLANT D.M. RINDANI FOR THE RESPONDENT DATE OF CON CLUDING THE HEARING : OCTOBER 6 TH , 201 5 DATE OF PRONOUNCING THE ORDER : OCTOBER 8 TH , 2015 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF TH IS A PPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 2 9 TH MAY, 201 3 PASSED BY THE LD. C IT (A) , IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR ASSESSMENT YEAR 20 10 - 11 , ON THE FOLLOWING GROUNDS : - (I) THE CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND DELETED THE ADDITION OF RS.54,32,213/ - PAYMENT MADE FOR RENDERING OF ANY MANAGERIAL OR CONSULTANCY SERVICE RENDERED BY NON RESIDENT AGENT WITHOUT TDS U/S. 40(A)(IA) OF THE ACT. (II) ON THE FACTS AND CIRCUMSTANCES OF CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD T HE ORDER OF T HE ASSESSING OFFICER. ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 2 OF 8 2. ALTHOUGH THE GROUNDS OF APPEAL REFERS TO SECTION 40(A)(IA) OF THE ACT , AS LD . REPRESENTATIVES FAIRLY AGREE TO REFER TO SECTION 40(A)(I) OF THE ACT , WE PROCEED ON THAT BASIS. 3. BRIEFLY ST ATED RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS , THE A SSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED A DEDUCTION IN RESPECT OF COMMISSION PAID TO OVERSEAS AGENTS, AGGREGATING TO RS.56,89,251/ - BUT HAS NOT DEDU CTED ANY TAX AT SOURCE FROM THE PAYMENTS SO MADE. IN RESPONSE TO A SSESSING OFFICER S REQUISITION TO SHOW CAUSE AS TO WHY THE EXPENSES SO INCURRED NOT BE DISALLOWED UNDER SECTION 40(A)(I) , IT WAS INTER ALIA SUBMITTED BY THE ASSESSEE THAT UNDER C I R CULA R NO. 786 OF 2002 THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE TO AGENTS ABROAD. AS FOR THE CIRCULAR HAVING BEEN WITHDRAWN VIDE SUBSEQUENT C IRCULAR NO.7 OF 2009 DATED 22 ND SEPTEMBER , 2009, IT WAS SUBMITTED BY THE ASSESSEE THAT BY WITHDRAWING THIS C IRCULAR THE LEGAL INTERPRETATION FOR PROVISION S OF SECTION 195 HAS NOT CHANGED. IT WAS POINTED OUT THAT THE FOREIGN AGENTS DID NOT RENDER ANY SERVICE IN INDIA THAT THEY HAVE NO PLACE OR PE RMANENT ESTABLISHMENT IN INDIA AND THAT THEY WOR K ABROAD TO PROCURE ORDERS . IT WAS ALSO EXPLAINED THAT THE PAYMENT MADE TO OVERSEAS AGENTS WAS NOT ON ACCOUNT OF ANY TECHNICAL OR MANAGERIAL SERVICES. IN EFFECT, THUS, IT WAS CONTENDED BY THE ASSESSEE THAT IN ABSENCE OF ANY SERVICE BEING RENDERED IN INDI A, NO PART OF COMMISSION PAID TO OVERSEAS AGENTS IS CHARGEABLE TO TAX UNDER THE I NCOME TAX ACT. AS A CORO LL ARY TO NON - TAXABILITY OF ANY PART OF SUCH INCOME BEING TAXABLE IN INDIA , ACCORDING TO THE ASSESSEE, THE TAX DEDUCTION REQUIREMENTS UNDER SECTION 195 DID NOT COME INTO PLAY. NONE OF THESE SUBMISSIONS, HOWEVER, IMPRESS THE A SSESSING OFFICER . THE A SSESSING OFFICER WAS OF THE VIEW THAT THE COMMISSION PAYMENT BEING MADE ARE FOR THE MANAGERIAL SERVICES WHICH ARE AS PER USE ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 3 OF 8 OF LEGAL INDEX, CONTACTING POTEN TIAL FOREIGN PURCHASERS . IT WAS ALSO NOTED THAT UNDER SECTION 52B OF THE ACT , SINCE INCOME ACCRUES OR ARISES IN INDIA, THE SAME IS TA XA BLE IN INDIA . THE A SSESSING OFFICER F URTHER NOTED THAT THE WITHDRAWAL OF CIRCULAR WAS CLARIFICAT ORY IN NATURE AND A S S UCH RETROSPECTIVE IN EFFECT. THE REFERENCE WAS ALSO MADE TO PROVISION OF SECTION 195 IN SUPPORT OF THE POSITION THAT THE ASSESSEE S FAILURE TO MOVE APPLICATION UNDER SECTION 195(2) OF THE ACT WOULD ALSO LEAD TO INFERENCE THAT THE ASSESSEE HAS FAILED TO CO MPLY WITH THE STATUTORY OBLIGATION AND DISALLOWANCE UNDER SECTION 40(A)(I) WOULD , THEREFORE , BE JUSTIFIED. IT WAS IN TH E BACK DROP OF THESE FINDING AND AFTER ELABORATE DISCUSSION S ABOUT THE TAXABILITY OF THE INCOME AND COMMISSION PAYMENT IN INDIA THAT THE A SSESSING OFFICER CONCLUDED THAT THE PAYMENTS AGGREGATING TO RS.56,89,251/ - MADE TO THE OVERSEAS A G EN T S ARE LIABLE TO BE DISALLOWED UNDER SECTION 40(A)(I) SINCE THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE UNDER SECTION 195 OF THE ACT. AGGRIEVED BY THE S T AND SO TAKEN BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MAT T ER IN APPEAL BEFORE THE LD. CIT (A) . LD . C IT ( A ) WAS OF THE VIEW THAT THE PROVISIONS OF SECTION 5, SECTION 9, SECTION 195 AND SECTION 40 (A)(I) COULD ONLY COME TO PLAY IN CASES WHERE THE INCOME OF THE NON - RESIDENT OVERSEAS AGENT ACCRUES OR ARISES IN INDIA BUT SINCE THESE AGENTS DID NOT HAVE ANY PERMANENT ESTABLISHMENT IN INDIA NOR DID THEY CARRY ANY ACTIVITY IN INDIA , SUCH TAXABILITY WILL NOT COME INTO PLAY EXCEPT IN THE CASE OF PARIK H PAT E L & C O MPANY . S O FAR AS THIS PAYMENT TO PARIKH PATEL & COMPANY IS CONCERNED, IT WAS NOTED BY THE LD . CIT (A) THAT THE TAX WAS DULY DEDUCTED UNDER SECTION 194H . LD . CIT ( A ), HOWEVER , CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS.2,57,038/ - IN RESPECT OF PAYMENT OF RS.2,13,537/ - TO SUKLA RASIKLAL SURYAPRASASD, RS.11,189/ - TO GLOBAL IMPACT USA, LLC AND RS.32,312/ - T O F RESNEDO ALBA NELL CARLOS ON THE GROUND THAT NO SALES W ERE EFFECTED THROUGH THESE AGENTS IN THE RELEVANT PREVIOUS YEAR. THE REMAINING ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 4 OF 8 DISALLOWANCE MA DE BY THE A SSESSING OFFICER WAS DELETED. AGGRIEVED BY THE DELETION OF THIS DISALLOWANCE , THE A SSESSING OFFICER IS IN APPEAL BEFORE US 4 . WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. WE HAVE NOTED THAT THE SHORT GRIEVANCE OF THE A SSESSING OFFICER IS THAT THE PAYMENT OF COMMISSION OF RS. 54,32,213/ - WAS IN THE NATURE OF CONSIDERATION FOR RENDITION OF MANAGERIAL CONSULTANCY SERVIC E S BY NON - RESIDENT AND ACCORDINGLY TAX SHOULD HAVE BEEN DEDUCTED FROM THE SAME AND SINCE THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE , THE PAYMENTS SO MADE SHOULD BE DISALLOW ED UNDER SECTION 40 (A)(I) . THE CASE OF THE R EVENUE THUS HINGES ON WHETHER OR NOT THE PAYMENTS IN QUES TION CAN BE TREATED AS MANAGERIAL OR CONSULTANCY SERVICE RENDERED BY NON - RESIDENT. WE FIND THAT , SO FAR AS THIS ASPECT OF THE MATTER IS CONCERNED, IT IS SQUARELY COVERED BY A DIRECT JUDGEMENT OF HON BLE M ADRAS H IGH C OURT IN THE CASE OF CIT VS . O RIENT E XPR ESS (230 T AXMAN 602 (MADRAS) /56 TA XMANN. COM 331 (MADRAS) WHEREIN THEIR LORDSHIPS HAVE INTER ALIA OBSERVED AS FOLLOWS : - 6. THIS COURT, IN FAIZAN SHOES (P.) LTD'S. CASE ( SUPRA ), HAD OCCASION TO CONSIDER A SIMILAR ISSUE AND AFTER EXHAUSTIVE ANALYSIS OF THE D IFFERENT PROVISIONS OF THE INCOME TAX ACT AND ALSO TAKING INTO CONSIDERATION THE LAW LAID DOWN BY THE SUPREME COURT WITH REGARD TO THE SAID PROVISIONS, HELD AS FOLLOWS : '6. BEFORE ADVERTING THE MERITS OF THE CASE, IT WOULD BE APPOSITE TO REFER TO SECTION 9(1)(I), SECTION 9(1)(VII) AND SECTION 9(2) OF THE ACT, WHICH READ AS UNDER : SECTION 9. INCOME DEEMED TO ACCRUE OR ARISE IN INDIA. (1) THE FOLLOWING INCOMES SHALL 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 ANY PROPERTY 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 ;... ( VII ) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 5 OF 8 PROVIDED THAT NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY IN RELATION TO ANY INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE IN PURSUANCE OF AN AGREEMENT MADE BEFORE THE 1ST DAY APRIL, 1976, AND APPROVED BY THE CENTRAL GOVERNMENT. EXPLANATION 1. - FOR THE PURPOSES OF THE FOREGOING PROVISO, AN AGREEMENT 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 ACCORDANCE WITH PROPOSALS APPROVED BY TH E 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 (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 THE HEAD 'SALARIES'. (2) NOTWITHSTANDING ANYTHING CONTAINED IN SUB - SECTION (1), ANY PENSION PAYABLE OUTSIDE INDIA TO A PERSON RESIDING PERMANENTLY OUTSIDE INDIA SHALL NOT BE DEEMED TO ACCRUE OR ARISE IN INDIA, IF THE PENSION IS PAYABLE TO A PERSON REFERRED TO IN ARTICLE 314 OF THE CONSTITUTION OR TO A PERSON WHO, HAVING BEEN APPOINTED BEFORE THE 15TH DAY OF AUGUST, 1947, TO BE A JUDGE OF THE FEDERAL COURT OR OF A HIGH COURT WITHIN THE MEANING OF THE GOVERNMENT OF INDIA ACT, 1935, CONTINUES TO SERVE ON OR AF TER THE COMMENCEMENT OF THE CONSTITUTION AS A JUDGE IN INDIA. EXPLANATION . - FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT FOR THE PURPOSES OF THIS SECTION, INCOME OF A NON - RESIDENT SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA UNDER CLAUSE (V) OR CLAU SE (VI) OR CLAUSE (VII) OF SUB - SECTION (1) AND SHALL BE INCLUDED IN THE TOTAL INCOME OF THE NON - RESIDENT, WHETHER OR NOT, ( I ) THE NON - RESIDENT HAS A RESIDENCE OR PLACE OF BUSINESS OR BUSINESS CONNECTION IN INDIA ; OR ( II ) THE NON - RESIDENT HAS RENDERE D SERVICES IN INDIA.' 7. ON A READING OF SECTION 9(1)(VII) OF THE ACT, WE ARE NOT INCLINED TO ACCEPT THE PLEA TAKEN BY THE LEARNED SENIOR STANDING COUNSEL APPEARING FOR THE REVENUE THAT COMMISSION PAID BY THE ASSESSEE TO THE NON - RESIDENT AGENT WOULD COME UNDER THE TERM 'FEES FOR TECHNICAL SERVICES'. IN THE CASE ON HAND, FOR PROCURING ORDERS FOR LEATHER BUSINESS FROM OVERSEAS BUYERS - WHOLESALERS OR RETAILERS, AS THE CASE MAY BE, THE NON - RESIDENT AGENT IS PAID 2.5 PER CENT. COMMISSION ON FOB BASIS. THAT APP EARS TO BE A COMMISSION SIMPLICITER. WHAT IS THE NATURE OF TECHNICAL SERVICE THAT THE SO - CALLED NON - RESIDENT AGENT HAS PROVIDED ABROAD TO THE ASSESSEE IS NOT CLEAR FROM THE ORDER OF THE ASSESSING OFFICER. THE OPENING OF LETTERS OF CREDIT FOR THE PURPOSE OF COMPLETING EXPORT OBLIGATION IS AN INCIDENT OF EXPORT AND, THEREFORE, THE NON - RESIDENT AGENT IS UNDER AN OBLIGATION TO RENDER SUCH SERVICES TO THE ASSESSEE, FOR WHICH COMMISSION IS PAID. THE NON - RESIDENT AGENT DOES NOT PROVIDE TECHNICAL SERVICES FOR THE P URPOSES OF RUNNING OF THE BUSINESS OF THE ASSESSEE IN INDIA. THE SERVICES RENDERED BY THE NON - RESIDENT AGENT CAN AT BEST BE ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 6 OF 8 CALLED AS A SERVICE FOR COMPLETION OF THE EXPORT COMMITMENT. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT THE COMMISSION PAID T O THE NON - RESIDENT AGENT WILL NOT FALL WITHIN THE DEFINITION OF FEES FOR TECHNICAL SERVICES. ** ** * * 9. THE EXPLANATION TO SECTION 9(2) OF THE ACT WAS SUBSTITUTED BY THE FINANCE ACT, 2010, WITH RETROSPECTIVE EFFECT FROM JUNE 1, 1976. THE ABOVE SAID EXPL ANATION WOULD COME INTO PLAY ONLY IF THE SAID AMOUNT PAID WOULD FALL UNDER THE HEADINGS : ( I ) INCOME BY WAY OF INTEREST AS SET OUT IN SECTION 9(1)(V) OF THE ACT ; OR ( II ) INCOME BY WAY OF ROYALTY AS SET OUT IN SECTION 9(1)(VI) OF THE ACT ; OR ( III ) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES AS SET OUT IN SECTION 9(1)(VII) OF THE ACT. 10. WHILE DEALING WITH SECTION 9(1) OF THE ACT, THE SUPREME COURT IN CIT V. TOSHOKU LTD. [1980] 125 ITR 525 , ON CONSIDERING A TRANSACTION WHERE TOBACCO WAS EXPORTED TO JAPAN AND FRANCE AND SOLD THROUGH NON - RESIDENT ASSESSEES WHO WERE PAID COMMISSION, HELD AS UNDER : '8. THE SECOND ASPECT OF THE SAME QUESTION IS WHETHER THE COMMISSION AMOUNTS CREDITED IN THE BOOKS OF THE STATUTORY AGENT CAN BE TREATED AS INCOMES ACCRUED, ARISEN, OR DEEMED TO HAVE ACCRUED OR ARISEN IN INDIA TO THE NON - RESIDENT ASSESSEES DURING THE RELEVANT YEAR. THIS TAKES US TO SECTION 9 OF THE ACT. IT I S URGED THAT THE COMMISSION AMOUNTS SHOULD BE TREATED AS INCOMES DEEMED TO HAVE ACCRUED OR ARISEN IN INDIA AS THEY, ACCORDING TO THE DEPARTMENT, HAD EITHER ACCRUED OR ARISEN THROUGH AND FROM THE BUSINESS CONNECTION IN INDIA THAT EXISTED BETWEEN THE NON - RES IDENT ASSESSEES AND THE STATUTORY AGENT. THIS CONTENTION OVERLOOKS THE EFFECT OF CLAUSE (A) OF THE EXPLANATION TO CLAUSE (I) OF SUB - SECTION (1) OF SECTION 9 OF THE ACT WHICH PROVIDES THAT IN THE CASE OF A BUSINESS OF WHICH ALL THE OPERATIONS ARE NOT CARRIE D OUT IN INDIA, THE INCOME OF THE BUSINESS DEEMED UNDER THAT CLAUSE TO ACCRUE OR ARISE IN INDIA SHALL BE ONLY SUCH PART OF THE INCOME AS IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED OUT IN INDIA. IF ALL SUCH OPERATIONS ARE CARRIED OUT IN INDIA, THE ENTIRE INCOME ACCRUING THEREFROM SHALL BE DEEMED TO HAVE ACCRUED IN INDIA. IF, HOWEVER, ALL THE OPERATIONS ARE NOT CARRIED OUT IN THE TAXABLE TERRITORIES, THE PROFITS AND GAINS OF BUSINESS DEEMED TO ACCRUE IN INDIA THROUGH AND FROM BUSINESS CONNECTION IN INDIA SHALL BE ONLY SUCH PROFITS AND GAINS AS ARE REASONABLY ATTRIBUTABLE TO THAT PART OF THE OPERATIONS CARRIED OUT IN THE TAXABLE TERRITORIES. IF NO OPERATIONS OF BUSINESS ARE CARRIED OUT IN THE TAXABLE TERRITORIES, IT FOLLOWS THAT THE INCOME ACCRUING OR ARISING ABROAD THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA CANNOT BE DEEMED TO ACCRUE OR ARISE IN INDIA (SEE CIT V. R. D. AGGARWAL AND CO. [1965] 56 IT R 20 (SC) AND CARBORANDUM CO. V. CIT [1977] 108 ITR 335 (SC) WHICH ARE DECIDED ON THE BASIS OF SECTION 42 OF THE INDIAN INCOME - TAX ACT, 1922, WHICH CORRESP ONDS TO SECTION 9(1)(I) OF THE ACT). 9. IN THE INSTANT CASE, THE NON - RESIDENT ASSESSEES DID NOT CARRY ON ANY BUSINESS OPERATIONS IN THE TAXABLE TERRITORIES. THEY ACTED AS SELLING AGENTS OUTSIDE INDIA. ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 7 OF 8 THE RECEIPT IN INDIA OF THE SALE PROCEEDS OF TOBACCO RE MITTED OR CAUSED TO BE REMITTED BY THE PURCHASERS FROM ABROAD DOES NOT AMOUNT TO AN OPERATION CARRIED OUT BY THE ASSESSEES IN INDIA AS CONTEMPLATED BY CLAUSE (A) OF THE EXPLANATION TO SECTION 9(1)(I) OF THE ACT. THE COMMISSION AMOUNTS WHICH WERE EARNED BY THE NON - RESIDENT ASSESSEES FOR SERVICES RENDERED OUTSIDE INDIA CANNOT, THEREFORE, BE DEEMED TO BE INCOMES WHICH HAVE EITHER ACCRUED OR ARISEN IN INDIA. THE HIGH COURT WAS, THEREFORE, RIGHT IN ANSWERING THE QUESTION AGAINST THE DEPARTMENT.' 11. THE FACTS OF THE PRESENT CASE ARE AKIN TO THE FACTS OF THE DECISION IN TOSHOKU LTD.'S CASE, REFERRED SUPRA . IN THE INSTANT CASE ALSO THE ASSESSEE ENGAGED THE SERVICES OF NON - RESIDENT AGENT TO PROCURE EXPORT ORDERS AND PAID COMMISSION. THAT APART, THE COMMISSIONER OF I NCOME - TAX (APPEALS) AS WELL AS THE TRIBUNAL HAVE CORRECTLY APPLIED THE PRINCIPLE LAID DOWN IN GE INDIA TECHNOLOGY CENTRE (P.) LTD.'S CASE, REFERRED TO SUPRA , TO HOLD THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE WHEN THE NON - RESIDENT AGENT PROVID ES SERVICES OUTSIDE INDIA ON PAYMENT OF COMMISSION. 12. IN THE LIGHT OF THE ABOVE SAID DECISIONS AND THE FINDING RENDERED BY US ON THE EARLIER ISSUE THAT THE SERVICES RENDERED BY THE NON - RESIDENT AGENT CAN AT BEST BE CALLED AS A SERVICE FOR COMPLETION OF T HE EXPORT COMMITMENT AND WOULD NOT FALL WITHIN THE DEFINITION OF FEES FOR TECHNICAL SERVICES, WE ARE THE FIRM VIEW THAT SECTION 9 OF THE ACT IS NOT APPLICABLE TO THE CASE ON HAND AND, CONSEQUENTLY, SECTION 195 OF THE ACT DOES NOT COME INTO PLAY. IN VIEW OF THE ABOVE FINDING, THE DECISION OF THE SUPREME COURT IN TRANSMISSION CORPORATION OF A.P. LTD.'S CASE, REFERRED TO SUPRA , RELIED UPON BY THE LEARNED STANDING COUNSEL FOR THE REVENUE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. WE FIND NO INFIRMITY I N THE ORDER OF THE TRIBUNAL IN CONFIRMING THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS).' THE ABOVE DECISION OF THIS COURT IN FAIZAN SHOES (P.) LTD'S. CASE ( SUPRA ) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE 6 . LD . DEPARTMENTAL REPRES ENTATIVE COULD NOT INVITE OU R ATTENTION TO ANY DECISION CONTRARY TO THE ABOVE FROM HON BLE GUJARAT HIGH COURT OR FOR THAT PURPOSE FROM ANY OTHER HON BLE HIGH COURTS . HE, HOWEVER, INVITES OU R ATTENTION TO A RULING GIVEN BY SKF BOILER S AND DRIER S (P) L TD. I N RE . 343 ITR 385 . HOWEVER, AS IS ELEMENTARY , THE R ULINGS G IVEN BY THE A UTHORIT Y FOR A DVANCE R ULING ARE NOT BINDING JUDICIAL PRECEDENT AS SECTION 245S OF THE ACT SPECIFICALLY PROVIDES THAT SUCH RULES ARE BINDING ONLY ON THE APPLICANT WHO SOUGHT IT. IN RE SPECT OF THE TRANSACTION IN RELATION TO WHICH RULING HAS BEEN SOUGHT AND THE CIT AND THE I . T . AUTHORITIES SUBORDINATE TO HIM I N RESPECT OF THE APPLICANT AND ITA N O. 315 /RJT/201 3 ASSESSMENT YEAR: 20 10 - 11 PAGE 8 OF 8 SAID TRANSACTION . IT IS , THEREFORE , OBVIOUS THAT PART FROM WHATEVER PERSUASIVE VALUE , SUCH RULINGS MAY HAVE, THESE RULINGS WOULD NOT BE DECISIVE ON THE VALUE PARTICULARLY WHEN THERE ARE CONTRARY BINDING JUDICIAL PRECEDENT FROM HON BLE HIGH C OURTS ABOVE. 7 . IN VIEW OF THE ABOVE DISCUSSION S AND ALSO BEARING IN MIND THE ENTIRETY OF THE CASE, WE UPHOLD THE RELIEF GRANTED BY THE LD . CIT ( A ) AND DECLINE TO INTERFERE IN THE MATTER. 8 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. P RONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF OCTOBER , 2015. SD/ - SD/ - RAJPAL YADAV PRAMOD K UMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) RAJKOT , THE 8 TH DAY OF OCTOBER , 2015 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL RE PRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT