An appeal was filed by the Revenue challenging the order of the Tribunal wherein the Tribunal deleted the disallowance made under section 40(a)(i) of the Act in respect of payment made towards commission to foreign agents without deducting tax at source. High Court observed that the question of TDS on commission income paid to foreign agents and the non-deduction of TDS was fully covered by the decision of the Supreme Court in GE India Technology Centre (P.) Ltd. v. CIT (327 ITR 456). High Court further observed that it was well settled that commission earned by a non-resident agent who carried on the business of selling Indian goods outside India cannot be said to be deemed income accrued or arising in India. High Court dismissed the department’s appeal holding that no substantial question of law arose in the matter. (TA No. 68 of 2016 dt. 16-8-2017) (AY 2010-11)
PCIT v. Sesa Goa Ltd. (2023) 291 Taxman 229 (Bom)(HC) Editorial: SLP of Revenue dismissed PCIT v. Vedanta Ltd (2023)291 Taxman 205 / 146 taxman.com 34 (SC)
S. 195 : Deduction at source-Non-resident-Other sums-Commission earned by non-resident agent carrying on business of selling Indian goods outside India could not be said to be income which had accrued and/or arisen in India and, thus, assessee was not liable to deduct TDS on payment of such commission to foreign agents.[S. 40(a)(i)]