ACIT 27(3), NAVI MUMBAI V. RAMESH P. SINGH, MUMBAI

ITA 974/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5140 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 10-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Services rendered outside India; Deemed to accrue or arise in india; Retrospective amendment; Permanent establishment; Set aside
• Section: 142(1); 5(2); 40(a)(ia); 195; 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE S HRI R.C. SHARMA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 974/MUM/2017 ASSESSMENT Y EAR: 2012 - 13 THE A.C.I.T. 27(3), 4 TH FLOOR, TOWER NO. 6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI VS. SHRI RAMESH P. SINGH, PROP. OF M/S ADITYA INVESTMENT AND EXIM TRADE (CO.), PLOT NO. 23, PALLVI BUILDING, MANEKLAL ESTATE, GHATKOPAR (E), MUMBAI - 400086 PAN: AAGPS2739C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI CHAITANYA ANJARIA ( D R ) ASSESSEE BY : NONE DATE OF HEARING: 12 /09 /201 8 DATE OF PRONOUNCEMENT: 28 / 09 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 11.11 .2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 25 , MUMBAI , FOR THE A S S ESSMENT YEAR 2012 - 13 , WHEREBY THE LD. CIT (A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME T AX ACT, 1961 (FOR SHORT THE A CT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE PROPRIETOR OF M/S ADITYA INVESTMENT AND EXIM TRADE CO., ENGAGED IN THE BUSINESS OF EXPORT OF FABRICS AND GARMENTS, FOOD PRODUCTS, STATIONERY ETC. FILED ITS RETURN OF INCO ME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS.26,55,425/ - . SINCE THE CASE WAS SELECTED FOR SCRUTINY AO ISSUED NOTICE U/S 143(2) AND 142(1) OF THE ACT. IN RESPONSE TO THE SAID NOTICES, THE AUTHORIZED REPRESENTATIVE (AR) APPEARE D BEFORE THE AO DISCUSSED THE CASE AND ALSO FILED THE DETAILS CALLED 2 ITA NO. 9 74 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 FOR. SINCE, IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED THE EXPENSES OF RS. 8,49,68,477/ - PAID TOWARDS COMMISSION TO M/S ASHIRWAD INTERNATIONAL GENERAL TRADING L.L.C. WHICH PROCURED ORDE RS FROM VARIOUS PARTIES FROM DIFFERENT COUNTRIES AS A SELLING AGENT OF THE ASSESSEE, AO ASKED THE ASSESSEE AS TO WHY TAX AT SOURCE WAS NOT DEDUCTED UNDER THE PROVISIONS OF SECTION 195 OF THE ACT ON PAYMENT OF COMMISSION TO THE FOREIGN AGENT. THE AR CONTEND ED THAT INCOME RECEIVED BY NON - RESIDENT FROM RESIDENT INDIAN IS TAXABLE IN INDIA IF THE INCOME IS RECEIVED IN RESPECTIVE OF SERVICES RENDERED IN INDIA AND UTILIZED IN INDIA OR HAS SUCH A LIVE LINK WITH INDIA THAT CAN BE TREATED AS ACCRUED OR ARISEN IN INDI A. HOWEVER, THE AO REJECTED THE CONTENTION OF THE ASSESSEE AND DISALLOWED THE EXPENSES HOLDING THAT INCOME ARISING ON ACCOUNT OF COMMISSION PAYABLE TO THE FOREIGN AGENTS IS DEEMED TO ACCRUE AND ARISING IN INDIA AND IS TAXABLE UNDER THE PROVISIONS OF SECTIO N5(2)(B) READ WITH SECTION 9(1)(I) OF THE ACT. THE ASSESSEE CHALLENGED THE IMPUGNED ORDER BEFORE THE CIT(A) . THE LD. CIT(A) AFTER HEARING THE ASSESSEE ALLOWED THE APPEAL AND DIRECTED THE AO TO DELETE THE ADDITION. 3 . AGGRIEVED BY THE ORDER OF LD. CIT (AP PEAL S ), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUND S : - ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DIRECTING TO DELETE THE DISALLOWANCE OF COMMISSION U/S 40(A)(IA) OF RS. 8,49,68 ,478/ - CLAIMED TO HAVE BEEN PAID OUT SIDE INDIA TO THE NON - RESIDENTS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD FAILED TO FOLLOW THE CONDITIONS OUTLINED IN THE CBDTS CIRCULAR NO. 4/2009 DATED 29.06.2009. 4 . THIS APPEAL WAS FIXED FOR HEARING ON 12.09.2018. HOWEVER, WHEN THE CASE WAS CALLED OUT FOR HEARING ON THE SAID DATE, NONE APPEARED ON BEHALF OF THE ASSESSEE. WE NOTICED THAT THE ASSESSEE HAD ALSO NOT APPEARED ON TWO THREE OCCASIONS BEFORE THE LAST DATE OF HEARING. WE ACCORDINGLY DECIDED TO DI SPOSE OF 3 ITA NO. 9 74 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 THE CASE ON THE BASIS OF MATERIAL ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 5. BEFORE US, THE LD. DR RELYING ON THE ASSESSMENT ORDER SUBMITTED THAT SINCE THE LD. CIT (A) HAS WRONGLY DELETED THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD FAILED TO FOLLOW THE CONDITION STIPULATED IN THE CBDT CIRCULAR NO. 4/2009 DATED 29.06.2009, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. 6 . WE HAVE GONE THROUGH THE ENTIRE MATERIAL ON RECORD INCLUDING THE ORDERS PASSED BY THE AUTHORITIES BELOW AND THE CASES RELIED UPON BY THEM. THE ONLY ISSUE RAISED BY THE REVENUE IS THAT WHETHER THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO DELETE THE DISALLOWANCE OF COMMISSION U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS. 8,49,68,478/ - PAID BY THE ASSESSEE TO NON - RESIDENT OUTSIDE INDIA? THE LD. CIT(A) HAS DECIDED THE SOLE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. THE DECISION OF THE LD CIT(A) READS AS UNDER: - 7.4 NOW IT NEEDS TO BE EXAMINED WHETH ER COMMISSION INCOME OF THE ASHIRWAD INTERNATIONAL GENERAL TRADING LLC WILL COME WITHIN THE MEANING OF RECEIVED, DEEMED TO BE RECEIVED, ARISES/ACCRUES AND DEEMED TO ARISE/ACCRUE IN INDIA. 7.4.1 INCOME RECEIVED IN INDIA: M/S ASHIRWAD INTERNATIONAL GENERAL TRADING LLC HAS NOT RECEIVED THE COMMISSION IN INDIA, SO THEIR INCOME DOES NOT FALL UNDER THIS CATEGORY. 7.4.2 INCOME DEEMED TO BE RECEIVED IN INDIA: SECTION 7 OF THE INCOME TAX ACT LISTS THE INCOME WHICH IS DEEMED TO BE RECEIVED IN INDIA AND THIS DOES N OT INCLUDE COMMISSION INCOME. HENCE, M/S ASHIRWAD INTERNATIONAL GENERAL TRADING LLC COMMISSION CANNOT BE CONSIDERED AS INCOME DEEMED TO BE RECEIVED IN INDIA. 7.4.3 INCOME ACCRUES OR ARISES IN INDIA: M/S ASHIRWAD INTERNATIONAL GENERAL TRADING LLC IS STATIO NED OUTSIDE INDIA AND CARRY ON ITS BUSINESS ACTIVITY OUTSIDE INDIA AND MARKET FOR CUSTOMERS ABROAD. THERE IS NO BUSINESS OPERATION OR RENDERING OF MARKETING RELATED SERVICES FOR THE INDIAN 4 ITA NO. 9 74 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 COMPANY IN INDIA BY THE NON - RESIDENT AGENTS. THE COMMISSION INCOME THEREFORE, DOES NOT ACCRUE OR ARISE IN INDIA. 7.4.4 INCOME DEEMED TO ACCRUE OR RAISE IN INDIA: THE PROVISIONS OF SEC 9(1)(I)/9(1)(VI) /9(1)(VII) PROVIDES FOR CERTAIN DEEMING FICTION WHEREIN CERTAIN SPECIFIED INCOME OR PAYMENTS ARE DEEMED TO ACCRUE OR AR ISE IN INDIA. SECTION 9(1)(I) STATES AS UNDER: - SECTION 9(1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA. - (I) ALL INCOME ACCRUING OR ARISING, WHETHER DIRECTLY OR INDIRECTLY THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA, OR THROU GH.. - [EXPLANATION 1] FOR THE PURPOSES OF THIS CLAUSE - (A) IN THE CASE OF A BUSINESS OF WHICH ALL THE OPERATIONS ARE NOT CARRIED OUT IN INDIA, THE INCOME OF THE BUSINESS DEEMED UNDER THIS CLAUSE TO ACCRUE OR ARISE IN INDIA SHALL BE ONLY SUCH PART OF TH E INCOME AS IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED OUT IN INDIA. .. .. .. 7.5 THE CONCEPT OF BUSINESS CONNECTION WAS DEALT WITH IN THE LANDMARK CASE OF CIT VS R.D. AGGARWAL & CO. & ANR. (1965 56 ITR 20 SC) WHERE THE APEX COURT HELD THAT A BUSINESS CONNECTION - INVOLVES A RELATION BETWEEN A BUSINESS CARRIED ON BY A NON - RESIDENT WHICH YIELDS PROFITS OR GAIN AND SOME ACTIVITY IN THE TAXABLE TERRITORIES WHICH CONTRIBUTES DIRECTLY OR INDIRECTLY TO THE EARNING OF THOSE PROFITS OR GAINS. I T PREDICATES AN ELEMENT OF CONTINUITY BETWEEN THE BUSINESS OF THE NON - RESIDENT AND THE ACTIVITY IN THE TAXABLE TERRITORIES. IT IS CLEAR FROM READING OF EXPLANATION 1 TO SECTION 9(1)(I) THAT THE INCOME OF THE BUSINESS TO ACCRUE OR ARISE IN SUCH A SCENARI O IS ONLY SUCH PART THAT CAN REASONABLY BE ATTRIBUTED TO OPERATIONS CARRIED OUT IN INDIA. SINCE M/S ASHIRWAD INTERNATIONAL GENERAL TRADING LLC DO NOT HAVE A PE IN INDIA, NO PART OF THE COMMISSION INCOME OF TH E AGENTS CAN BE SAID TO ACCRUE OR ARISE IN INDIA . 7.6 SECTION 9(1)(VI) DEALS WITH ROYALTY. IN MY VIEW, COMMISSION PAYMENTS CANNOT BE CONSTRUED AS ROYALTY PAYMENTS GOING BY THE DEFINITION OF ROYALTY UNDER THE I.T. ACT AS GIVEN IN EXPLANATION 2 OF SECTION 9(I)(VI). SIMILARLY, SECTION 9(I)(VII) DEALS WITH FEES FOR TECHNICAL 5 ITA NO. 9 74 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 SERVICES. FROM THE SUBMISSIONS OF THE APPELLANT IT IS CLEAR THAT M/S ASHIRWAD INTERNATIONAL GENERAL TRADING LLC WAS NOT PURSUING ORDER PROCUREMENT, SALES PROMOTION AND NO RIGHT TO CONCLUDE CONTRACTS TO GIVE IT A COLOUR OF MANAGERIA L, TECHNICAL OR CONSULTANCY SERVICE. HENCE, IN MY VIEW, COMMISSION PAYMENTS TO NON - RESIDENT AGENTS CANNOT BE AS REGARDED FEES FOR TECHNICAL SERVICES AS DEFINED IN EXPLANATION 2 OF SECTION 9(VII), AS THE COMMISSION PAYMENT IS NOT FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES. WITH RESPECT TO ROYALTY & FESS FOR TECHNICAL SERVICES, IT IS ALSO OBSERVED THAT NORMALLY THE PAYMENT IN THE NATURE OF ROYALTY OR FEES FOR TECHNICAL SERVICES, MADE TO A NON RESIDENT IS NTO TAXABLE IN INDIA EXCE PT FOR THE OPERATION OF THESE DEEMING PROVISIONS. HOWEVER, UNDER CLAUSE (B) OF THESE TWO PROVISIONS. ROYALTY OR FESS FOR TECHNICAL SERVICES WOULD NOT ACCRUE IN INDIA IF IT IS FOR THE PURPOSE OF MAKING OR EARNING ANY INCOME FROM ANY SOURCE OUTSIDE INDIA. HO NBLE TRIBUNALS IN CIT VS. KKK WEST GERMANY (262 ITR 513 (MAD)., TITAN INDUSTRIES VS. ITO (11 SOT 206 (BANG.) AND LUFTHANSA CARGO INDIA (P) LTD. DCIT 91 ITD 133 (DEL.) HAVE TAKEN A STAND THAT AS THE FEES ARE PAID TO NON - RESIDENTS FOR THE PURPOSE OF PROCUR ING EXPORT ORDERS OUTSIDE INDIA, IT IS FOR THE PURPOSE OF EARNING FROM A SOURCE OUTSIDE INDIA. THEREFORE, THE FACT IS EVEN IF THE COMMISSION IS CONSIDERED AS ROYALTY OR FEES FOR TECHNICAL SERVICES, IT DOES NOT ACCRUE IN INDIA. 7.7 IT IS FURTHER OBSERVED THAT IN THE FOLLOWING DECISIONS PAYMENT OF COMMISSION TO FOREIGN AGENTS HAVE BEEN UPHOLD THE NON - TAXABLITY OF SUCH PAYMENTS UNDER THE INCOME TAX ACT, 1961: 1. CIT V TOSHOKU LTD. 125 ITR 525 (SC): THE HONBLE SUPREME COURT HELD THAT WHEN A NON - RESIDENT, WITH NO OPERATION OF BUSINESS IN INDIA, RENDERED SERVICES OUTSIDE INDIA TO AN INDIAN CONCERN, THEN PROVISIONS OF SECTION 9 OF THE I.T. ACT 1961 ARE NOT ATTRACTED. 2. CIT VS. EON TECHNOLOGY P. LTD. (ITA NO. 1167 DATED 8 TH NOVEMBER 2011, DELHI (HC) WHEREIN THE DELH I HIGH COURT HELD THAT INDIAN TAXPAYER IS NOT LIABLE TO DEDUCT TAX UNDER SECTION 195 OF THE ACT FROM COMMISSION AND OTHER RELATED CHARGES PAYABLE TO NON - RESIDENT WHO HAS RENDERED SERVICES OUTSIDE INDIA. 3. CIT VS. SHERATON INTERNATIONAL INC. (2009) 313 ITR 2 67) WHERE THE DELHI HIGH COURT HAS REVERSED THE ORDER OF TRIBUNAL BY HOLDING THAT THE MAIN SERVICE RENDERED BY THE U.S. COMPANY TO INDIAN COMPANY WAS ADVERTISEMENT, PUBLICITY AND SALES PROMOTION AND THESE WOULD NEITHER FALL UNDER THE CATEGORY OF ROYALTY NOR FEES FOR TECHNICAL SERVICE. 6 ITA NO. 9 74 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 4. CIT VS INDOPEL GARMENTS (P) LTD. VS DCIT ( 2001 72 TTJ MAD 702) WHERE THE ITAT CHENNAI HELD THAT NO DISALLOWANCE UNDER S. 40(A)(I) COULD BE MADE FOR COMMISSION PAYMENT, WITHOUT DEDUCTING TAX, TO FOREIGN CONCERN WITHOUT A CTING AS A SELLING AGENT OF THE ASSESSEE FOR CANVASSING ORDERS OUTSIDE INDIA AS INCOME WILL BE DEEMED TO ACCRUE OR ARISE IN INDIA ONLY IF ANY PART OF THE INCOME IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED OUT IN INDIA AND IF NO OPERATIONS ARE CARR IED OUT IN INDIA, THERE WOULD BE NO INCOME DEEMED TO ACCRUE OR ARISE IN INDIA AND NO TAX WAS TO BE DEDUCTED UNDER S. 195 OUT OF REMITTANCES MADE TO FOREIGN CONCERN. 5. SPAHI PROJECTS (P) LTD., IN RE (315 ITR 374 AAR) WHERE THE AAR HELD THAT COMMISSION FOR SER VICES RENDERED IN CONNECTION WITH ARRANGING SALES ABROAD (IN SOUTH AFRICA) CANNOT BE BROUGHT WITHIN THE NET OF INCOME - TAX IN INDIA AS THERE WAS NO FIXED PLACE OF BUSINESS IN INDIA FOR THE SOUTH AFRICAN ENTITY NOR DOES THE SA ENTITY ENTER INTO ANY CONTRACTS IN INDIA. 6. IND TELESOFT P. LTD., IN RE (543 OF 2001) WHERE THE AAR HELD THAT FOR PAYMENT OF COMMISSION THEREON TO NON - RESIDENT COMPANIES FOR SECURING BUSINESS OUTSIDE INDIA THERE IS NO LIABILITY TO DEDUCT TAX AT SOURCE UNDER THE INDIAN INCOME TAX 1961. 7. DCI T VS. ARDESHI B. CURSETJEE & SONGS LTD. (2008 115 TTJ MUMBAI 916) WHERE THE ITAT MUMBAI HELD THAT COMMISSION PAYMENT MADE TO NON - RESIDENT FOR SERVICES RENDERED OUTSIDE INDIA NOT BEING CHARGEABLE TO TAX IN INDIA COULD NOT BE DISALLOWED UNDER SECTION 40(A)(I A). 8. JCIT VS. GEORGE WILLIAMSON (ASSAM) LTD. (2009 116 ITD 328) WHERE IN THE ITAT GUWAHATI BENCH HELD THAT WITH RESPECT TO PAYMENT OF SELLING COMMISSION, BROKERAGE AND OTHER REALTED CHARGES TO NON - RESIDENT AGENTS IN RESPECT OF SALE OF TEA OUTSIDE INDIA, NO INCOME HAD ACCRUED OR ARISEN IN INDIA EITHER UNDER SECTION 5(2) OR UNDER SECTION 9 AND THEREFORE NO TAX WAS DEDUCTIBLE UNDER SECTION 195. 9. DCIT VS. SANJIV GUPTA (2011 135 TTJ LUCKNOW 641) WHERE THE ITAT LUCKNOW HAD HELD THAT DISALLOWANCE UNDER SECTION 40(A) (IA) FOR THE A.Y. 2007 - 08 ON THE COMMISSION PAYMENTS MADE TO NON - RESIDENTS WAS NOT CALLED FOR AS THE WITHDRAWAL OF CIRCULAR 23 OF 1969 AND 786 OF 2000 BY CIRCULAR 7 OF 2009 DATED 22 - 10 - 2009 WAS ONLY OPERATIVE FROM THE DATE OF ISSUE OF CIRCULAR 7 AND DID NO T HAVE RETROSPECTIVE EFFECT. 10. TVS MOTOR COMPANY VS. ACIT (ITA NOS. 697 & 757/MDS/2009) WHERE THE ITAT CHENNAI IN AN ORDER DATED 22 ND DECEMBER 2010, AMONGST OTHER ISSUES, HAS AFFIRMED THAT EXPORT COMMISSION PAYMENTS MADE TO NON - RESIDENT AGENTS WILL NOT BE LI ABLE TO TAX DEDUCTION AT SOURCE AND DISALLOWANCE U/S 40(A)(IA) IS TO BE DELETED. 7 ITA NO. 9 74 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 7.8 IT IS FURTHER OBSERVED THAT THE CBDT CIRCULAR 7 OF 2009, WHICH HAS WITHDRAWN EARLIER CBDT CIRCULAR(S) WILL NOT HAVE ANY EFFECT ON THE LOCUS - STANDI THAT THE TAX DEDUCTION A T SOURCE IS NOT REQUIRED FOR COMMISSION PAYMENTS TO NON - RESIDENT AGENTS BY THE INDIAN COMPANY. IT IS OBSERVED THAT EARLIER CIRCULARS OF 1969 AND 2000 HAVE GIVEN BLANKET EXEMPTIONS ON THIS ISSUE. THE WITHDRAWAL WITH THE CIRCULAR NO. 7 OF 2009 HAS REMOVED TH E BLANKET EXEMPTION. HOWEVER, THIS DOES NOT IMPLY THAT COMMISSIONS TO NON - RESIDENT AGENTS BECOME AUTOMATICALLY CHARGEABLE TO TAX IN INDIA. STILL THE PRINCIPLE HOLDS GOOD THAT THE PAYMENTS TO NON - RESIDENTS ARE LIABLE FOR TAX IN INDIAN ONLY IF THEY SATISFY T HE TEST OF CHARGEABILITY IN INDIA AND ONE HAS TO ASCERTAIN FROM THE FACTS OF EVERY CASE TO DETERMINE WHETHER THE COMMISSION PAID TO NON - RESIDENT IS CHARGEABLE FOR TAX IN INDIA. IT HAS BEEN UPHELD IN THE CASE OF DCIT V. DIVIS LABORATORIES LTD. - (2011 - TII - 1 82 - ITAT - HYD - INTL) THAT WITHDRAWAL OF THE AFORESAID CBDT CIRCULARS WOULD NOT AFFECT THE EXISTING SETTLED POSITION IN LAW. 7.9 THUS FROM THE READING OF THE PROVISIONS OF SECTION 9 AS WELL AS A NUMBER OF CASE LAWS IT IS CLEAR THAT THE COMMISSION PAYMENTS MA DE BY THE APPELLANT FIRM TO M/S ASHIRWAD INTERNATIONAL GENERAL TRADING LLC CANNOT BE TREATED AS DEEMED TO ACCRUE OR ARISE IN INDIA AND HENCE IS NOT TAXABLE IN INDIA. THE AO IS ACCORDINGLY, DIRECTED TO DELETE THE ADDITION OF RS. 8,49,68,478/ - ON THIS ACCOUN T. HENCE, G ROUNDS NO. 1 AND 2 ARE ALLOWED. 7 . WE NOTICE THAT THE THE LD. CIT(A) HAS DECIDED THE ISSUE INVOLVED IN THIS CASE BY RELYING ON THE JUDGMENTS OF THE HONBLE SUPREME COURT, HONBLE HIGH COURTS AND THE DECISIONS OF THE VARIOUS BENCHES OF THE TRIBU NAL INCLUDING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V TOSHOKU LTD. 125 ITR 525 (SC): IN WHICH IT HAS BEEN HELD THAT WHEN A NON - RESIDENT, WITH NO OPERATION OF BUSINESS IN INDIA, RENDERED SERVICES OUTSIDE INDIA TO AN INDIAN CONCERN, T HEN PROVISIONS OF SECTION 9 OF THE I.T. ACT 1961 ARE NOT ATTRACTED. IN SPAHI PROJECTS (P) LTD., IN RE (315 ITR 374 AAR ) , THE A UTHORITY FOR A DVANCE R ULINGS HAS HELD THAT COMMISSION FOR SERVICES RENDERED IN CONNECTION WITH ARRANGING SALES IN SOUTH AFRICA CAN NOT BE BROUGHT WITHIN THE NET OF INCOME - TAX IN INDIA AS THERE WAS NO FIXED PLACE OF BUSINESS IN INDIA FOR THE SOUTH AFRICAN ENTITY NOR DOES THE S OUTH A FRICA ENTITY ENTER INTO ANY CONTRACTS IN INDIA. WE 8 ITA NO. 9 74 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 FURTHER NOTICE THAT T HE OTHER DECISIONS RELIED AND DIS CUSSED BY THE LD. CIT(A) ARE ALSO RELEVANT TO ADJUDICATE THE ISSUE INVOLVED IN THE PRESENT CASE. SINCE, THE FINDINGS OF THE LD. CIT(A) ARE BASED ON THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE SUPREME COURT, HIGH COURTS AND THE DECISIONS OF VARIOUS BENCH ES OF THE ITAT, WE DO NOT FIND ANY ERROR OR INFIRMITY TO INTERFERE WITH THE SAME. HENCE, WE UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS THE SOLE GROUND OF APPEAL OF THE REVENUE. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR A SSESSMENT YEAR 2012 - 201 3 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER , 2018 . SD/ - SD/ - ( R.C. SHARMA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI ; DATED: 28 / 09 / 201 8 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI