Asstt. Commissioner of Income Tax-1, Kanpur V. M/s Enayat Overseas, Kanpur

ITA 662/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0999 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 13-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.662/LKW/2014 ASSESSMENT YEAR:2010 - 11 M/S ENAYAT OVERSEAS, D - 374, DEFENCE COLONY, JAJMAU, LUCKNOW. VS A.C.I.T. - 1, KANPUR. (RESPONDENT) (APPELLANT) SHRI AMIT NIGAM , D. R. APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY 17/06/2015 DATE OF HEARING 23 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR DATED 16/04/2014 FOR THE ASSESSMENT YEAR 2011 - 2011. 2. GROUND NO. 1 TO 8 ARE IN CONNECTION WITH ONE ISSUE I.E. DELETION OF ADDITION OF RS.1,01,84,186/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON DEDUCTION OF TDS ON PAYMENT OF COMMISSION TO FOREIGN AGENTS. 3. REGARDING THIS ISSUE, LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTE D THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS JUDGMENTS INCLUDING A JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF DIRECTOR OF INCOME TAX (INTL. TAX.) VS. PANALFA AU TO E LEKTRIK LTD.IN I.T.A. NO.292/2014 DATED 18/09/2014, COPY OF WHICH IS AVAILABLE ON PAGES 1 TO 13 OF THE JUDGMENT PAPER BOOK. 2 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH IS JUD GMENT OF HON'BLE DELHI HIGH COURT CITED BY LEARNED A.R. OF THE ASSESSEE. IN THIS CASE ALSO, THE QUESTION BEFORE HON'BLE DELHI HIGH COURT WAS AS TO WHETHER THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE COMMISSION PAID TO M/S AGENTA WORLD TRADING AND CONSULTIN G ESTABLISHMENT FOR PROCURING EXPORT ORDERS IS NOT FEE FOR TECHNICAL SERVICES U/S 9(1)(VII) OF THE INCOME TAX ACT. HON'BLE HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BL E DELHI HIGH COURT, WE HOLD THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER PASSED BY LEARNED CIT(A). 5. APART FROM THIS JUDGMENT OF HON'BLE DELHI HIGH COURT, LEARNED A.R. OF THE ASSESSEE HAS RELIED UPON TWO TRIBUNAL DECISIONS ALSO BEING IN THE CASE OF AC IT VS. T. ABDUL WAHID & CO. [2014] 46 TAXMANN.COM 75 (CHENNAI - TRIB.) AND IN THE CASE OF DY. CIT VS. I. M. GEARS PVT. LTD. [2014] 49 TAXMANN.COM 175 (CHENNAI TRIB.). COPY OF BOTH THESE TRIBUNAL ORDERS ARE AVAILABLE ON PAGES 14 TO 19 & 20 TO 25 OF THE PA PER BOOK CONTAINING JUDGMENTS. IN BOTH THESE CASES, THE DISPUTE WAS WHETHER AGENCY/SALES COMMISSION PAID BY THE ASSESSEE TO NON - RESIDENT AGENTS FOR SERVICES RENDERED BY THEM OUTSIDE INDIA IN PROCURING EXPORT ORDERS FOR THE ASSESSEE, IS CHARGEABLE TO TAX I N INDIA OR NOT AND WHETHER AS A CONSEQUENCE , THE ASSESSEE WAS UNDER ANY OBLIGATION TO DEDUCT TDS U/S 195 OF THE ACT ON SAID COMMISSION PAYMENT. IT WAS HELD BY THE TRIBUNAL THAT SUCH COMMISSION PAYMENT WAS NOT TAXABLE IN THE HANDS OF THE PAYEE IN INDIA AND AS A CONSEQUENCE TDS WAS NOT REQUIRED TO BE DEDUCTED AND AS A FURTHER CONSEQUENCE, NO DISALLOWANCE CAN BE MADE FROM SUCH COMMISSION PAYMENT U/S 40 (A) (IA) . RESPECTFULLY FOLLOWING THESE TRIBUNAL DECISIONS AND ALSO THE JUDGMENT OF HON'BLE DELHI HIGH COURT NOTED ABOVE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). ACCORDINGLY GROUND NO. 1 TO 8 ARE REJECTED. 3 6. GROUND NO. 9 IS AS UNDER: 9. THAT THE LEARNED CIT(A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN IGNORING THE EXPLANATION INSERTED BY FINANCE ACT, 2010 RETROSPECTIVELY W.E.F. 01/06/1976 IN SUB SECTION (2) OF SECTION 9 OF INCOME TAX ACT. 7. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 8. WE HAVE CONSID ERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY LEARNED CIT(A) IN PARA 14 OF HIS ORDER THAT THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.1,00,000/ - UNDER THE HEAD REPAIR AND MAINTENANCE ON ACCOUNT OF NON - VERIFIABILITY OF BILLS AND VOUCHERS AND I N ABSENCE OF LOG - BOOK. HE HAS GIVEN A FINDING THAT THERE IS NO SPECIFIC INSTANCE OF NON - VERIFIABILITY OF SUCH EXPENSES. THEREAFTER, HE HAS HELD THAT ON OVERALL CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE AND THE OBSERVATIONS RECORDED BY THE ASSE SSING OFFICER, THE DISALLOWANCE IS RESTRICTED TO RS.50,000/ - . CONSIDERING THE FACTS OF THE PRESENT CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). ACCORDINGLY, THIS GROUND IS REJECTED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 /07/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR