The DCIT, Panchmahal Circle, Panchmahal V. The Panchmahal Steel Ltd., Panchmahal

ITA 634/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7823 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 14-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: M J SHAH
• Keywords: Services rendered outside India; Advance ruling

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.634/AHD/2017 / ASSTT. YEAR: 2013-2014 DCIT, PANCHMAHAL CIRCLE GODHRA 389 001. VS. THE PANCHMAHAL STEEL LTD. GIDC, KALOL DIST: PANCHMAHAL,GUJARAT. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI V.K. SINGH, SR.DR ASSESSEE BY : SHRI M.J. SHAH, AR ! / DATE OF HEARING : 25/06/2018 '#$ ! / DATE OF PRONOUNCEMENT: 09/07/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF THE LD.CIT(A)-4, VADODARA DATED 4.11.2016 PASSED FOR TH E ASSESSMENT YEAR 2013-14. 2. THOUGH REVENUE HAS TAKEN THREE GROUNDS OF APPEAL , BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D.CIT(A) HAS ERRED IN DELETING DISALLOWANCE OF RS.1,05,98,558/- MADE BY T HE AO. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY AT THE RELEVANT TIME WAS ENGAGED IN MANUFACTURING OF STEEL BILLETS AND RELATED PRODUCTS AT ITS FACTORY LOCATED AT KALOL, DIST. PAN CH MAHALS. IT FILED ITS RETURN OF INCOME ELECTRONICALLY ON 23.9.2013 DECLAR ING INCOME AT NIL. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND ITA NO.634/AHD/2017 2 NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED U PON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAD CLAIMED EXPENDITURE OF COMMISSION PAYMENT OF RS.1,0 5,98,558/- IN FOREIGN CURRENCY. THE LD.AO HAS CONFRONTED THE ASS ESSEE TO SHOW AS TO WHETHER IT HAS DEDUCTED TDS ON SUCH COMMISSION PAYM ENT. IF NOT, THEN WHY IT SHOULD NOT BE DISALLOWED BY APPLYING TH E PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT. IN RESPO NSE TO THE QUERY OF THE AO, THE ASSESSEE FILED A DETAILED WRITTEN SUBMI SSIONS WHICH HAS BEEN REPRODUCED BY THE AO ON PAGE NOS.2 TO 5 OF THE ASSESSMENT ORDER. IN BRIEF THE CONTENTION OF THE ASSESSEE WAS THAT IT HAD PAID COMMISSION TO FOREIGN AGENT FOR THE SERVICES RENDERED BY THEM OUTSIDE INDIA. SERVICES WERE OF PROVIDING DETAILS OF PROSPECTIVE C USTOMERS AND AFTER SALE ENSURING PAYMENT TOWARDS EXPORT SALES. IT WAS ALSO CONTENDED THAT NORMALLY TALKS WITH SUCH AGENTS WERE BY MEANS OF ELECTRONIC MEDIA, SUCH AS TELEPHONE, EMAIL ETC. THE AGENTS AL SO ARRANGE MEETINGS WITH PROSPECTIVE BUYERS DURING THE VISIT OF MARKETI NG HEAD IN THAT COUNTRY. THERE WAS NO FORMAL AGREEMENT. HOWEVER, F OR THE SALES MADE THROUGH THEM COMMISSION IS PAYABLE/PAID TO THEM ON RECEIPT OF THEIR DEBIT NOTES AFTER REALIZATION OF EXPORT PROCEEDS. THE PAYMENTS WERE MADE THROUGH BANKING CHANNELS TO THE AGENTS IN THEI R ACCOUNTS WITH THE BANK. AGENTS HAVE NO BUSINESS ESTABLISHMENT IN IND IA. THEY HAVE NOT CARRIED OUT ACTIVITY IN INDIA. HENCE, THE COMMISSIO N PAID BY THE ASSESSEE DOES NOT HAVE ELEMENT OF INCOME ASSESSABLE IN THE HANDS OF ALLEGED AGENTS, AND IF THERE WAS NO ELEMENT OF INCO ME AVAILABLE, THEN THE ASSESSEE WAS NOT SUPPOSED TO DEDUCT TDS. HOWEV ER, THE LD.AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. HE MADE DISALLOWANCE WITH HELP OF SECTION 40(A)(I) ON THE G ROUND THAT THE ASSESSEE FAILED TO DEDUCT TDS ON THE ALLEGED COMMIS SION PAYMENT. DISSATISFIED WITH THE DISALLOWANCE THE ASSESSEE CAR RIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A) IT AGAIN FILED WRITTEN SUBMISSIONS WHICH ITA NO.634/AHD/2017 3 HAVE BEEN REPRODUCED BY THE LD.CIT(A) IN THE IMPUGN ED ORDER. THE LD.CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY RECORDING THE FOLLOWING FINDING: 3.3.1. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD . AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFIC ER. THE ONLY ISSUE PERTAINS TO THE DISALLOWANCE OF COMMISSION PA YMENTS MADE TO FOREIGN AGENTS CLAIMED BY THE APPELLANT OF RS.1, 05,98,558/-. THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENE SS OF THE PAYMENTS MADE TO THE COMMISSION AGENTS LOCATED IN F OREIGN COUNTRIES BASED ON THE CONFIRMATION LETTER AS WELL AS LETTER RECEIVED FROM THE FOREIGN AGENTS WHO HAD NO PE OR P LACE OF BUSINESS IN INDIA. THE FOREIGN AGENTS HAD DONE THE SERVICES IN THEIR COUNTRIES AND RECEIVED COMMISSION PAYMENTS FO R THE SERVICES RENDERED BY THEM IN THEIR COUNTRIES FOR GE TTING ORDERS TO THE APPELLANT. THE OPERATION OF THE SECTION 195 OF THE INCOME-TAX ACT COMES INTO FORCE FOR DEDUCTING TDS ON FOREIGN PAYMENTS PA ID BY THE RESIDENT ASSESSEE TO NON-RESIDENT AGENTS ONLY WHEN THE PAYMENT MADE TO THE NON-RESIDENTS. VARIOUS COURT DECISIONS HAVE HELD THAT IN SUCH TYPE OF SITUATIONS, THE PROVISIONS OF DEDUC TING TAX WILL NOT ARISE AS THE OVERSEAS COMMISSION INCOME OF A FOREIG N AGENT IS NOT TAXABLE IN INDIA IN THE ABSENCE OF 'BUSINESS CONNEC TION. A COMMISSION AGENT WORKING OUTSIDE INDIA FOR OBTAININ G EXPORT ORDERS DOES NOT CARRY OUT ANY BUSINESS OPERATION IN INDIA AND, THEREFORE, NO INCOME IS STATED TO ACCRUE OR ARISE I N INDIA. THE CBDT CIRCULARS CLARIFYING THIS PROVISION HAVE BE EN WITHDRAWN BUT IT HAS NOT CHANGED THE FUNDAMENTAL PRINCIPLE S. IF THE COMMISSION AGENT ACTING AS A SELLING AGENT OUTSIDE INDIA IS NOT CHARGEABLE TO TAX IN INDIA AND THE RECEIPT IN INDIA OF THE SALE PROCEEDS REMITTED BY THE PURCHASERS FROM ABROAD DID NOT AMOUNT TO AN OPERATION CARRIED OUT BY THE NON-RESIDENT COM MISSION AGENT IN INDIA AS CONTEMPLATED BY CLAUSE (A) OF THE EXPLA NATION TO 9(1) OF THE ACT. THE APEX COURT IN THE CASE OF CIT VS TO SHOKU LTD [1980] 125 ITR 525(SC) HAS CATEGORICALLY HELD THAT THE COMMISSION AMOUNTS WHICH WERE EARNED BY THE NON-RES IDENT FOR SERVICES RENDERED OUTSIDE INDIA COULD NOT BE DEEMED TO BE INCOME WHICH HAD EITHER ACCRUED OR ARISEN IN INDIA. FURTHER, IN THE CASE OF AUTHORITY FOR ADVANCE RULINGS IN THE CASE I ND TELESOFT(P) LTD [2004] 267 ITR 725 (AAR) IT IS HELD THAT NO TAX WAS DEDUCTIBLE AT SOURCE UNDER SECTION 195 OF THE ACT O N PAYMENTS OF COMMISSION AND RETAINER FEE MADE BY THE APPELLANT T O THE NON- ITA NO.634/AHD/2017 4 RESIDENT COMPANIES FOR SECURING BUSINESS OUTSIDE IN DIA WHERE THE SAID ENTITIES HAD NO OFFICE OR BUSINESS OPERATIONS IN INDIA. 3.3.2. HON'BLE APEX COURT, IN THE CASE OF GE INDIA TECHNOLOGY CEN. (P.) LTD. [2010] 327 ITR 456(SC) HAS HELD THAT THE EXPRESSION 'CHARGEABLE UNDER THE PROVISIONS OF THE ACT IN SEC.195(1)' SHOWS THAT THE REMITTANCE HAS TO BE OF TRADING RECEIPT, THE WHOLE OR PART OF WHICH, IS LIABLE TO T AX IN INDIA. IF TAX IS NOT SO ASSESSABLE, THERE IS NO QUESTION OF TAX A T SOURCE BEING DEDUCTED. LD. AUTHORIZED REPRESENTATIVE HAS ALSO RE LIED ON SOME RECENT DECISIONS WHICH ARE DIRECTLY ON THIS ISSUE A ND SUPPORT THE CLAIM OF THE APPELLANT. THESE ARE: (I) GUJARAT RECLAIM AND RUBBER PRODUCTS LTD. ITA N O. 8868/MUM/2010 (MUMTRIB.) (II) DCIT V. DIVI'S LABORATORIES LTD. - (2011-TII-1 82-ITAT- HYD-INTL) (III) EXOTIC FRUITS (P) LTD VS. ITO [2013] 40 TAXMA NN.COM 348 (BANG. TRIB.) (IV) CIT V. EON TECHNOLOGY (P) LT D. (2012) 246 CTR 40 (DELHI) (HIGH COURT) (V) SOUTHERN BOREWE LLS V. CIT [2014] 43 TAXMANN.COM 378 (HC-KERALA) (VI) ITO VS TRIDENT EXPORTS [2014] 44 TAXMANN.COM 2 97 (CHENNAI - TRIB.) (VII) ANDREW YULE & CO.LTD. VS CI T(1994) 206 ITR 381 (MAD) :TC5PS.170 (VIII) RUPAJEE RATNACH AND & ANR.VS CIT (1955)282 (AP):TC5R453 & (IX) ITO VS SHRIRAM BEARINGS LTD.(1987)164 ITR 419(CAL):TC5R453A CONSIDERING THE RATIO OF AFOREMENTIONED DECISIONS, THE ISSUE NEEDS TO BE ALLOWED IN FAVOUR OF THE APPELLANT WHICH IS A LLOWED IN PARA BELOW. 3.3.3. MOREOVER, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF MY PREDECESSORS AS WELL AS BY THE UNDERSIGNED AS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVES THA T ON THE SAME ISSUE, LD.CIT(A) BARODA HAD ALLOWED THE SIMILA R PAYMENT IN EARLIER YEARS I.E. FOR A.Y. 2001-02, 2003-04, 2004- 05, 2005-06, 2006-07, 2007-08, 2008-09 2009-10 AND 2011-12 VIDE ORDERS DATED 18.09.2009, 28.01.2010, 21.01.2013, 29.11.201 3 AND 15.02.2016 RESPECTIVELY. FROM THE COPIES OF ORDERS PLACED BEFORE ME IT TRANSPIRES THAT THIS CONTENTION OF THE AUTHOR IZED REPRESENTATIVES IS CORRECT. THREE DIFFERENT CLT(A) HAVE ALLOWED APPEALS OF THE ASSESSEE FOR A.Y. 2001-02, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 AND 2009-10. I A LSO AGREE ITA NO.634/AHD/2017 5 WITH THE LD. AUTHORIZED REPRESENTATIVE THAT HON'BLE ITAT, AHMEDABAD VIDE ITS ORDER DATED 20.08.2010 FOR A.Y. 2002-03 AND 2007-08 IN ITA NO. 1443 AND 1444/AHD/2010 HAVE DISM ISSED THE APPEALS OF THE REVENUE. SIMILARLY, VIDE ORDER DATED 13.07.2012 TRIBUNAL HAS DISMISSED THE APPEALS OF REVENUE FOR A .Y. 2001-02, 2003-04, 2004-05, 2005-06 AND 2006-07 IN ITA NO 5- 14/AHD/2010. CONSIDERING THE VARIOUS JUDICIAL PRECE DENTS AS MENTIONED ABOVE, THE ASSESSING OFFICER IS NOT JUSTI FIED IN DISALLOWING THE COMMISSION PAYMENTS MADE ABROAD ON THE GROUND THAT NO IDS WAS DEDUCTED. IN VIEW OF THE VARIOUS CA SE LAWS MENTIONED SUPRA AND RESPECTFULLY FOLLOWING THEM, I AM OF THE CONSIDERED VIEW THAT THE CLAIM OF THE APPELLANT IS IN ACCORDANCE WITH LAW. THE ASSESSING OFFICER IS DIRECTED TO DELE TE THE ADDITION MADE AT RS.1,05,98,558/-. THIS GROUND OF APPEAL IS ALLOWED. 4. AT THE VERY OUTSET, THE LD.COUNSEL FOR THE ASSES SEE CONTENDED THAT SIMILAR PAYMENTS WERE MADE IN THE ASSESSMENT YEARS 2001-02 TO 2009- 10 AND 2011-12. DISPUTE IN ALL THESE YEARS EITHER AT THE INSTANCE OF THE REVENUE OR AT THE INSTANCE OF THE ASSESSEE TRAVELLE D UPTO THE TRIBUNAL, AND CONSISTENTLY IT HAS BEEN HELD THAT ELEMENT OF I NCOME WAS NOT INVOLVED IN SUCH TRANSACTIONS. THUS, NON-RESIDENT COMMISSION AGENTS ARE NOT TAXABLE IN INDIA BECAUSE THEY HAVE NOT CARR IED OUT ANY ACTIVITY IN INDIA. HE PLACED ON RECORD COPY OF THE TRIBUNAL S ORDER IN THE ASSESSMENT YEAR 2009-10. HE FURTHER POINTED OUT TH AT THE LD.CIT(A) HAS MADE REFERENCE TO THE FACTS AND THE STATUS OF D ISALLOWANCE OF SUCH COMMISSION PAYMENTS IN EARLIER YEARS. HE ALSO CONT ENDED THAT ITAT, AHMEDABAD IN THE CASE OF DCIT VS. WELSPUN CORPORATI ON LTD., 77 TAXMANN.COM 165 (AHD) HAS CONSIDERED SIMILAR ASPECT S ELABORATELY. FACTS OF BOTH THESE CONCERNS ARE IDENTICAL. THEY A RE ALSO IN SIMILAR PRODUCTS, AND COMMISSION WAS PAID TO FOREIGN AGENTS . THE AO SOUGHT TO DISALLOW ON THE GROUND THAT PAYMENT MADE BY THE ASSESSEE WAS A FEE FOR TECHNICAL SERVICES AS PER SECTION 9 AND EVEN IF THE RECIPIENTS ARE NOT HAVING ANY PE IN INDIA OR ANY OTHER ESTABLISHMENT T HEN ALSO THEIR SERVICES ARE BEING USED IN INDIA FOR SUPPLYING OF T HE GOODS. THUS, THE PAYMENT MADE TO THEM, INVOLVED ELEMENT OF INCOME AN D TDS OUGHT TO ITA NO.634/AHD/2017 6 BE DEDUCTED. THIS STAND OF THE AO HAS NOT BEEN APP ROVED BY THE CIT(A) AS WELL AS BY THE ITAT IN THE CASE OF WELSPU N CORPORATION LTD. (SUPRA). THE LD.COUNSEL FOR THE ASSESSEE PLACED ON RECORD COPY OF THE ORDER OF THE TRIBUNAL WHICH IS REPORTED IN 77 TAXMA NN.COM 165 (AHD) AND 55 ITR (T) 405 (AHD). ON THE OTHER HAND, THE L D.DR RELIED UPON THE ORDER OF THE AO. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE CIT(A)S ORDER WOULD INDICATE THAT IDENTICAL ISSUE HAS BEEN CONSIDERED IN EARLIER YEAR S. CONSISTENTLY, IT HAS BEEN HELD THAT PAYMENTS MADE BY THE ASSESSEE TO ALL EGED FOREIGN COMMISSION AGENTS DOES NOT INVOLVE ELEMENT OF INCOM E ASSESSABLE IN INDIA, AND THEREFORE, THERE IS NO OBLIGATION UPON T HE ASSESSEE TO DEDUCT TDS. REFERENCE TO THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF GE INDIA TECHNOLOGY CENTRE P. LTD. V. CIT [ 2010] 327 ITR 456 (SC) WAS MADE. APART FROM CONSISTENCY, WE WOUL D LIKE TO MAKE REFERENCE TO THE FACTS NOTED IN THE HEAD NOTES OF T HE JUDGMENT OF WELSPUN CORPORATION LTD. (SUPRA), WHICH READS AS UN DER: THE ASSESSEE-COMPANY WAS A GLOBAL MANUFACTURER OF S TEEL PIPES, PLATES AND COILS, OFFERING THE HIGHEST QUALI TY OF PIPES. THE MANUFACTURING ACTIVITIES PERFORMED BY THE COMPA NY WERE HIGHLY TECHNICAL IN NATURE. THE MANUFACTURING OF SP ECIALISED PIPE WAS A HIGHLY TECHNICAL ACTIVITY INVOLVING A HI GHLY-TECHNICAL COMPLEX EXERCISE OF TECHNOLOGY AND SKILLED LABOUR A ND THE FINEST GRADE OF RAW MATERIALS. TO PROCURE ORDERS, T HE COMPANY REQUIRED SPECIALIST AGENTS WHO COULD UNDERSTAND THE TECHNICAL NITTY-GRITTY OF THE ASSESSEE'S BUSINESS AND COULD D EMONSTRATE THE ASSESSEE'S BUSINESS PROFILE AND THE QUALITY OF THE PRODUCTS OF THE ASSESSEE TO THE POTENTIAL CLIENTS TO CONVINC E THEM TO ENTER INTO A CONTRACT WITH THE ASSESSEE FOR SUPPLY OF THE PIPES ETC. AND OTHER ALLIED WORKS. IN ORDER TO PERFORM THE AFORESAID HIGHLY TECHNICAL ACTIVITY, THE ASSESSEE ENTERED INTO A CONTRACT WITH FOREIGN AGENT S. IN TERMS OF THE AGREEMENT, THE AGENT WAS TO DEVELOP, EXPAND AND PROMOTE THE SALES AND MARKETING FOR ASSESSEE'S PROD UCTS, MAKE MARKET PLANS AND ESTABLISH A MARKETING NETWORK OF ITA NO.634/AHD/2017 7 REPRESENTATIVES TO HELP AND PROMOTE ASSESSEE'S PROD UCTS, TO PROVIDE INFORMATION SUCH AS MARKET DEVELOPMENT, ACT IVITIES OF COMPETITORS, INTENTIONS AND PLANS OF CLIENTS AND FI NANCIAL INFORMATION ON CLIENTS, TO PROVIDE ADVANCED INFORMA TION ABOUT THE TENDERS, GATHERING TECHNICAL SPECIFICATIONS OF PROJECT AND WORK INCIDENTAL THERETO, AND TO IDENTIFY SUB-CONTRA CTORS AND LOGISTIC SERVICE PROVIDER, SUCH AS SHIPPERS AND CAR GO HANDLING AGENCIES, TO ENSURE THE SMOOTH EXECUTION OF CONTRAC TS. DURING RELEVANT YEAR, THE ASSESSEE MADE PAYMENT OF EXPORT COMMISSION TO COMMISSION AGENTS WITHOUT DEDUCTING T AX AT SOURCE. THE ASSESSEE CLAIMED THAT THE EXPORT COMMIS SION WAS NOT A SERVICE AND IF AT ALL THEY ARE BEING CONSTRUE D AS SERVICES, THE SAME WAS BEING RENDERED OUTSIDE INDIA AND WAS N OT TAXABLE IN INDIA UNDER SECTION 5(2). ACCORDINGLY, T HE TAX WAS NOT REQUIRED TO BE WITHHELD UNDER SECTION 195. THE ASSESSING OFFICER HELD THAT THE RESPONSIBILITIE S OF AGENTS SHOWED THAT AGENTS WERE REQUIRED TO RENDER TECHNICA L SERVICES, ALLOW THE USE OF INFORMATION CONTAINING INDUSTRIAL, COMMERCIAL AND TECHNICAL EXPERIENCE WHICH WAS MADE AVAILABLE T O THE ASSESSEE, AND THAT THE CONSIDERATION RECEIVED FOR T HESE SERVICES WAS NOTHING BUT FEES FOR TECHNICAL SERVICE S. THESE PAYMENTS ACCORDING TO THE ASSESSING OFFICER WERE TA XABLE UNDER SECTION 9(1)(VII). THEREFORE, THE ASSESSEE WA S LIABLE FOR TAX DEDUCTION AT SOURCE FROM THESE PAYMENTS UNDER S ECTION 195. ON APPEAL, THE COMMISSIONER(APPEALS) HELD THAT THE PAYMENTS COULD NOT BE HELD TO BE FTS AND THEY WERE IN THE NA TURE OF COMMISSION EARNED FROM SERVICES RENDERED OUTSIDE IN DIA WHICH DID NOT HAVE TAX IMPLICATIONS IN INDIA. 6. THE TRIBUNAL MADE ELABORATE DISCUSSION ON ALL PO SSIBLE ANGLES IN THIS JUDGMENT, AND THEREAFTER CONCLUDED AS UNDER: 41. WE ARE IN CONSIDERED AGREEMENT WITH THE VIEWS SO EXPRESSED BY THE COORDINATE BENCH. IN VIEW OF THESE DISCUSSIO NS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE UPHOLD WEL L REASONING FINDINGS OF THE LEARNED CIT(A) THAT THE COMMISSION PAYMENTS MADE TO THE NON-RESIDENT AGENTS DID NOT HAVE ANY TA XABILITY IN INDIA, EVEN UNDER THE PROVISIONS OF THE DOMESTIC LA W I.E. SECTION 9. ONCE WE COME TO THE CONCLUSION THAT THE INCOME E MBEDDED IN THESE PAYMENTS DID NOT HAVE ANY TAX IMPLICATIONS IN INDIA, NO FAULT CAN BE FOUND IN NOT DEDUCTING TAX AT SOURCE F ROM THESE PAYMENTS OR, FOR THAT PURPOSE, EVEN NOT APPROACHING THE ASSESSING OFFICER FOR ORDER UNDER SECTION 195. IN O UR CONSIDERED ITA NO.634/AHD/2017 8 VIEW, THE ASSESSEE, FOR THE DETAILED REASONS SET OU R ABOVE, DID NOT HAVE TAX WITHHOLDING LIABILITY FROM THESE PAYMENTS. AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF GE INDIA TECHN OLOGY CENTRE (P.) LTD. V. CIT [20101 327 ITR 456/193 TAXMAN 234/ 7 TAX.MANN.COM 18, PAYER IS BOUND TO WITHHOLD TAX FRO M THE FOREIGN REMITTANCE ONLY IF THE SUM PAID IS ASSESSABLE TO TA X IN INDIA. THE ASSESSEE CANNOT, THEREFORE, BE FAULTED FOR NOT APPR OACHING THE ASSESSING OFFICER UNDER SECTION 195 EITHER. AS REGA RDS THE WITHDRAWAL OF THE CBDT CIRCULAR HOLDING THAT THE CO MMISSION PAYMENTS TO NON-RESIDENT AGENTS ARE NOT TAXABLE IN INDIA, NOTHING REALLY TURNS ON THE CIRCULAR, AS DE HORS THE AFORES AID CIRCULAR, WE HAVE ADJUDICATED UPON THE TAXABILITY OF THE COMMISS ION AGENT'S INCOME IN INDIA IN TERMS OF THE PROVISIONS OF THE I NCOME TAX ACT AS ALSO THE RELEVANT TAX TREATY PROVISIONS. 7. THE FACTS IN BOTH THE CASE ARE IDENTICAL. BOTH THE ASSESSES WERE ENGAGED IN MANUFACTURING OF STEEL BILLETS, WIRE ROD S, BRIGHT BARS ETC. THEY HAVE BEEN EXPORTING THESE PRODUCTS TO FOREIGN COUNTRIES. THEY HAVE CERTAIN AGENTS WHO HAVE PROCURED ORDERS OUTSID E INDIA AND THE ASSESSEES HAVE PAID COMMISSION ON SUCH ORDERS. THE REFORE, RESPECTFULLY FOLLOWING ORDER OF THE ITAT IN THE CAS E OF WELSPUN CORPORATION LTD. (SUPRA) AS WELL AS ORDERS IN THE A SSESSEES OWN CASE, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED F OR IN THE ORDER OF THE LD.CIT(A). 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 9 TH JULY, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 09/07/2018