ITA No. 636/LKW/2013 and C.O. No. 42/LKW/2013 [Arising out of ITA No. 636/LKW/2013], (Assessment Year: 2010-2011). Case: ACIT-1 Vs Northern Tannery. ITAT (Income Tax Appellate Tribunal)
| Case Number | ITA No. 636/LKW/2013 and C.O. No. 42/LKW/2013 [Arising out of ITA No. 636/LKW/2013], (Assessment Year: 2010-2011) |
| Counsel | For Appellant: Amit Nigam, D.R. and For Respondents: Ashish Jaiswal, Advocate |
| Judges | Sunil Kumar Yadav, Member (J) and A.K. Garodia, Member (A) |
| Issue | Income Tax Act, 1961 - Sections 195, 40(a)(i), 9(1)(vii) |
| Judgement Date | June 18, 2015 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
Sunil Kumar Yadav, Member (J), (ITAT Lucknow 'B' Bench)
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This appeal is preferred by the Revenue against the order of the ld. CIT(A), inter alia, on the following grounds:--
"1. That the Ld. Commissioner of Income tax (Appeals)-II, Kanpur has erred in law and on facts in deleting addition of Rs. 24,84,645/-made by the assessing officer on account of non-deduction of TDS on payment of commission to Foreign Agent without appreciating, the facts brought on record by the Assessing Officer during the course of assessment proceedings.
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The Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in Law and on facts in deleting the above addition made by the assessing officer without considering the Board's circular No. 7/2009 09 dated 22.10.2009.
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That the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has not appreciated the settled principle in respect of interpretation of prospective or retrospective nature of amendment in the statute as laid down by the Hon'ble Supreme court in the case of CIT v. Gold Coin Health Food Pvt. Ltd. (008) 304 ITR 308 (SC) and CIT v. Moser Baer India Ltd. [2009] 315 ITR 460(SC).
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That the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in not appreciating the fact that the services rendered by the non resident agent to procure orders from foreign buyers are purely technical as well as managerial in nature. Therefore, the provisions of section 9(1)(vii) are clearly applicable on the assessee.
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That the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in not appreciating the fact that the payment by the resident assessee in connection with its business in India to a person outside country is nothing but a fee which has been paid by the resident assessee to the non-resident for the technical services rendered by him.
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The Ld. Commissioner of Income Tax (Appeals)-I, Kanpur has erred in law and on facts in deleting the addition of Rs. 1,00,000/-made by the assessing officer on account of foreign travelling expenses without appreciating the facts brought on record by the Assessing Officer.
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The Ld. Commissioner of Income Tax (Appeals)-I, Kanpur has erred in law and on facts in deleting the addition of Rs. 2,00,000/- made by the assessing officer on account of repair & maintenance of machinery expenses without appreciating the facts brought on record by the Assessing Officer.
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The Ld. Commissioner of Income Tax (Appeals)-I, Kanpur has erred in law and on facts in deleting the addition of Rs. 2,50,000/-made by the assessing officer on account of miscellaneous expenses without appreciating the facts brought on record by the Assessing Officer.
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That the order of the Ld. CIT (A)-II, Kanpur dated 24.05.2013 needs to be quashed and the order passed by the Assessing Officer dated 27.02.2013 to be restored."
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In support of the order of the ld. CIT(A), the assessee has filed cross objection. We, therefore, heard the appeal as well as the cross objection together.
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The main issue involved in the Revenue's appeal is with regard to the deletion of addition of Rs. 24,84,645/- made by the Assessing Officer on account of non-deduction of TDS on payment of commission to foreign agent.
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The ld. counsel for the assessee has invited our attention to the order of the Tribunal in the assessee's own case for assessment year 2009-10 which is placed on record at pages 59 to 66 of the compilation of the assessee, in which identical issue was discussed and the Tribunal, having followed the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. M/s. Model Exims, 358 ITR 2 (Alld), decided the issue in favour of the assessee and the view taken by the ld. CIT(A) was confirmed. The ld. counsel for the assessee has further contended that since the issue is squarely covered by the earlier order of the Tribunal in the assessee's own case for the immediately preceding year, the order of the ld. CIT(A) deserves to be confirmed.
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The ld. D.R., on the other hand, has submitted that the assessment year involved is 2010-11 and the Explanation added to section 9(1)(vii) of the Income-tax Act, 1961 (hereinafter called in short "the Act") by the Finance Act, 2010 w.e.f. 1.6.1976 was to be considered and since it was not considered by the lower authorities while adjudicating the issue, therefore, the matter is required to be set aside to the file of the Assessing Officer for re-adjudication of the issue in the light of Explanation added to section 9(1)(vii) of the Act by the Finance Act, 2010.
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The ld. counsel for the assessee, in rebuttal, has contended that this argument was also considered by the Hon'ble High Court in the case of...
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