AMBICA STEELS LTD. Vs. DEPUTY COMMISSIONER OF INCOME TAX
LAWS(IT)-2014-8-26
INCOME TAX APPELLATE TRIBUNAL
Decided on August 13,2014

Ambica Steels Ltd. Appellant
VERSUS
DEPUTY COMMISSIONER OF INCOME TAX Respondents

JUDGEMENT

A.T.Varkey, Member (J) - (1.) THIS is an appeal preferred by the assessee against the order dated 06.11.2012 of the CIT(A) -IV, New Delhi relevant to the assessment year 2009 -10. The grounds of appeal are as follows: - - "1. That the order of the ld. A.O., as well as CIT(A) is bad in law and against the facts of the case.
(2.) THAT the ld. A.O. as well CIT(A) was not justified in disallowing export commission of Rs. 2,82,54,644/ -. The assessee craves the right to add, delete, modify any one or more of the grounds of appeal at the time of hearing. 2. The sole ground of appeal. Apropos disallowance of export commission to the tune of Rs. 2,82,54,644/ -. 3. Brief facts of the case are that the assessee company is engaged in the business of manufacturing of Steel Ingots, Bar Etc. and filed the income for the Assessment Year 2009 -10 before DCIT Circle -1(1), New Delhi declaring loss of Rs. 77,92,270/ - on 29.09.2009. The A.O., vide order under section 143(3) of the Income Tax Act, made certain addition/disallowances and assessed the income at Rs. 2,04,62,374/ - vide order dated 05.12.2011 and disallowed the commission paid on export commission of Rs. 2,82,54,644/ - for non deduction of TDS by the assessee to non -resident/outsiders and for non submission of the supporting evidence relating therewith. The assessee filed an appeal before the ld. CIT(A) IV, New Delhi which was dismissed by the ld. CIT(A) IV, New Delhi vide Order dated 06.11.2012.
(3.) THE ld. CIT(A) held as follows: - - "5.5 The facts of the appellant's case are similar to the facts of Havells India Ltd. The submission of the ld. AR that my ld. predecessor has decided the issue in the favour of the appellant in the Assessment Year 2008 -09 is of no help to the appellant as when my ld. predecessor was deciding the issue, he did not have the benefit of the authoritative pronouncement from the jurisdictional High Court. The reliance placed the ld. AR on the various decisions is of no help to the appellant as they were decided on different facts and hence distinguishable. Moreover, the Hon'ble Jurisdictional High Court in the case of CIT v. Havells India (supra) has discussed the entire jurisprudence on the issue and gave a ruling that the payments made to nonresidents in respect of exports emanating from India will be liable for TDS and hit by Section 40(a)(ia). In the case under consideration, the manufacturing facilities of the appellant are located in India. The export commission of Rs. 2,82,54,644/ - was paid in respect of the exports which originated from India. Therefore, the submissions of the ld. AR are rejected. In view of the above facts and circumstances of the case, legal position and judicial pronouncement of the jurisdictional High Court, I hold that the A.O. was fully justified in coming to the conclusion that the commission paid to non -resident is income deemed to accrue or arise in India within the meaning of section 9 of the IT Act, 1961 and therefore, the assessee was liable to deduct TDS on export commission paid to non -resident and in making the disallowance u/s. 40(a)(ia). The disallowance made by the A.O. is upheld. The ground of appeal is rejected.";


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