The Assessing Officer disallowed foreign commission payments in a sum of Rs. 5.05 lakhs under section 40(a)(ia) of the Income-tax Act, 1961 on the ground that the assessee had not deducted tax at source thereon. The Tribunal recorded that the non-resident agent of the assessee was operating at his own level and no part of the income arose or accrued in India  hence the assessee was not liable to deduct tax at source. Order of Tribunal is affirmed.