On appeal the Tribunal held that:

Fundamental requirement to deduct Tax at source, is that the sum has to be chargeable under the provisions of the Act to cast an obligation u/s 195(1)

Once the relationship is that of principal and agent, the mode of determination of fees as agreed between two parties cannot be construed as a joint venture, to bring the commission paid under the net of Sec 195, more so when the services were rendered outside India and did not fall in category of income received or deemed to be received in India, and consequently the provisions of S.  40(a)(i) cannot be invoked. (AY. 2013-14)