ACIT, New Delhi V. Sh. Rajesh Kumar Saroj, New Delhi

ITA 5880/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4480 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N NANDA
• Keywords: Deemed to accrue or arise in india; Permanent establishment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F , NEW DELHI BEFORE SH. N.K. SAINI , ACCOUNTANT M EMBER AND SH. KULDIP SINGH , JUDICIAL MEMBER ITA NO . 5880 /DE L/ 2014 ASSESSMENT YEAR : 2010 - 11 ACIT, CIRCLE - 20(1), NEW DELHI VS. SH. RAJESH KUMAR SAROJ, COTTAGE NO. 1, OBEROI APARTMENTS, 2, SHAM NATH MARG, NEW DELHI PAN : ACOPS5597C (APPELLANT) (RESPONDENT) APPELLANT BY SH. DEEPAK GARG, SR.DR RESPONDENT BY SH. S.N. NANDA, CA DATE OF HEARING 25.09.2017 DATE OF PRONOUNCEMENT 28.09.2017 ORDER PER KULDIP SINGH , JM . : THE APPELLANT (HEREINAFTER REFERRED TO AS THE REVENUE ) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 20.05.2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XXII, NEW DELHI, ON THE GROUNDS, INTER ALIA, THAT: (I) W HETHER ON THE FACTS OR CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,28,32,580/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - DEDUCTION OF TDS ON PAYMENTS TO NON - RESIDENT FOREIGN AGENT M/S. PARTNER AGENCY BY THE ASSESSEE. (II) T HE CIT(A) DID NOT APPRECIATE THE FACTS OF THE CASE THAT EXPORT COMMISSION PAID TO THE VARIOUS PARTIES SITUATED IN DIFFERENT FOREIGN COUNTRIES, BY THE ASSESSEE IS DEEMED TO ACCRUE OR ARISE IN INDIA AND ATTRACTED PROVISIONS OF SECTION 195 OF I.T. ACT, 1961. 2 ITA NO . 5860/DEL/2014 2. BRIEFLY STATED FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE THAT THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESSEE UN DER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) AT RS. 5,69,87,650/ - BY MAKING ADDITION OF RS.1,28,32,580/ - UNDER SECTION 40(A)(IA) READ WITH SECTION 195 OF THE ACT BY RELYING UPON BOARD CIRCULAR NO. 7/2009 AND BY FOLLOWING THE RULING IN RAJIV MALHOTRA, INRE AAR 671 OF 2005, REPORTED IN [2006] 284 ITR 564 (AAR) . 2.1 . THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A) WHO HAS DELETED THE ADDITION BY PARTLY ALLOWING THE APPEAL. 4. WE HAVE HEARD THE LEARN ED AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDER PASSED BY THE REVENUE AUTHORITIES BELOW. 5. LE ARNED AUTHORIZED REPRESENTATIVE OF THE ASSE SS EE, CHALLENGING THE IMPUGNED ORDER, CONTENDED THAT THE ISSUE IN CONTROVERSY HAS ALREADY BEEN SET AT REST BY THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. EON TECHNOLOGY PVT. LTD., [2012] 343 ITR 366 (DELHI) , HOWEVER, ON THE OTHER HAND, LEARNED SR. DR RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 6. THE HON BLE DELHI HIGH C OURT IN THE CASE EON TECHNOLOGY PVT. (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. UNDISPUTEDLY, THE ASSESSEE IS EXPORTER OF READYMADE GARMENTS HAVING NO DOMESTIC SALES WHOSE EXPORT ORDERS WERE PROCURED BY M/S. PART NER AGENCY TO WHOM THE ASSESSEE HAS PAID COMMISSION FROM 3% TO 7%. IT IS ALSO NOT IN DISPUTE THAT 3 ITA NO . 5860/DEL/2014 M/S. PARTNER AGENCY IS A FOREIGN AGENT OPERATING FROM OUTSIDE INDIA AND THE COMMISSION IS BEING DECLARED ON SHARING BILLS , WHICH WERE FILED WITH THE CUSTOM AU THORITIES AT THE TIME OF EXPORT. IT IS ALSO NOT IN DISPUTE THAT M/S. PARTNER AGENCY DID NOT HAVE ANY PERMANENT ESTABLISHMENT (PE) IN INDIA. 7. WHEN WE EXAMINE AFORESAID UNDISPUTED FACTS OF THIS CASE IN THE LIGHT OF THE DECISIONS RENDERED BY THE HON BLE DELHI HIGH COURT IN THE CASE OF EON TECHNOLOGY PVT. (SUPRA), WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS GIVEN BY THE LEARNED CIT(A) BECAUSE THE AGENT HAS RENDERED SERVICES ABROAD AND COMMISSION IS ALSO REMITTED TO THEM ABROAD AND THE AGENCY HAS N O PE IN INDIA , AND AS SUCH, THE PROVISIONS CONTAINED UNDER SECTION 195 OF THE ACT ARE NOT ATTRACTED. 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE FIND NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER, HENCE THE PRESENT APPEAL FILED BY THE REVENUE IS H EREBY DISMISSED. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 2 8 T H SEPT. , 201 7 . S D / - S D / - ( N.K. SAINI ) ( KULDIP SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 8 T H SEPTEMBER , 201 7 . RK / - COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI