| COURT: | Madras High Court |
| CORAM: | M. Jaichandren J, S. Vimala J |
| SECTION(S): | 195, 40(a)(ia), 9(1)(i), 9(1)(vii) |
| GENRE: | Domestic Tax, International Tax |
| CATCH WORDS: | Accrual of income, TDS disallowance |
| COUNSEL: | T. N. Seetharaman |
| DATE: | January 20, 2016 (Date of pronouncement) |
| DATE: | April 28, 2016 (Date of publication) |
| AY: | 2010-11 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 195/ 40(a)(ia): Commission paid to a non-resident for services rendered outside India is not chargeable to tax in India and is not liable for TDS. Insertion of Explanation 4 to s. 9(1)(i) and Explanation 2 to s. 195(1) by FA 2012 w.r.e.f. 01.04.1962 and insertion of Explanation below s. 9 (2) by FA 2010, w.r.e.f. 01.06.1976 makes no difference to the law | |
The commission payments to the non-resident agents are not taxable in India, as the agents are remaining outside, services are rendered abroad and payments are also made abroad. The contention of the Revenue that the Tribunal ought not to have relied upon G.E.India Technology’s case, cited supra, in view of insertion of Explanation 4 to Section 9 (1) (i) of the Act with corresponding introduction of Explanation 2 to Section 195 (1) of the Act, both by the Finance Act, 2012, with retrospective effect from 01.04.1962 is not correct. When the transaction does not attract the provisions of Section 9 of the Act, then there is no question of applying Explanation 4 to Section 9 of the Act
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