Payable To The Foreign Agent. The Question As Proposed By The Revenue Is No Longer Res Integra In View Of The Decision Of This Court In The Case Of Pr Cit v. Mgm Exports Rendered In The Tax Appeal

C/TAXAP/274/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 274 of 2019 ==========================================================PRINCIPAL COMMISSIONER OF INCOME TAX 4 VersusVAIBHAVLAXMI INTERNATIONAL LTD. ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALAandHONOURABLE MR.JUSTICE A.C. RAO Date : 15/07/2019 ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act, 1961”) is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Ahmedabad 'A' Branch, Ahmedabad dated 22[nd] October 2018 in the ITA No.2143/Ahd/2014 for the assessment year 2009-10. 2The Revenue has proposed the following two questions of law: “[A] Whether the Appellate Tribunal has erred in law and on facts in upholding the decision of CIT(A) deleting the addition made on account of disallowance u/s 40(a)(ia) of commission of Rs.23,13,214/- paid to foreign client without complying the provision of Section 195 of the Act and provision made on account of commission of Rs.82,349/-? [B] Whether the Appellate Tribunal has erred in law and on facts in upholding the decision of CIT(A) deleting the addition of Rs.1,49,18,219/- made in respect of estimation of Gross profit?” 2The first question proposed by the Revenue has something to do with Section 40(a)(ia) of the Act. The issue is with regard to the deletion of the addition made on account of the disallowance of Rs.23,14,214/- under Section 40(a)(ia) of the Act for non-deduction of the tax of the source of commission payable to the foreign agent. The question as proposed by the Revenue is no longer res integra in view of the decision of this Court in the case of PR CIT vs. MGM Exports rendered in the Tax Appeal No.309 of 2018 dated 11[th] April 2018. 3The ratio of the decision of this Court referred to above is that a person paying interest or any other sum to a non-resident is not liable to deduct tax if such sum is not chargeable to tax under the Act. Thus, the first question proposed by the Revenue is squarely covered. 4So far as the second question proposed by the Revenue, the findings recorded by the Tribunal are as under: “17.We have noted that when Assessing Officer was confronted with the explanation of the assessee, he did not have anything to say beyond that “action taken in the original assessment proceedings was correct” as, according to the Assessing Officer, “there were discrepancies”. These findings of the CIT(A) are not claimed to be perverse or factually incorrect. When the Assessing Officer declines to meet the specific points raised by the assessee in first appellate proceedings, there is obviously no point in challenging the conclusions arrived at in the first appellate proceedings based on vague generalities. No specific issues are raised in appeal before us. We have also noted that the learned CIT(A) has granted impugned relief on the basis of specific explanations of the assessee which have remained uncontroverted. In the light of these discussions as also bearing in mind entirely of the case, we approve well reasoned arrived at by the learned CIT(A) and decline to interfere in the matter.” 5In view of the aforesaid findings of fact, we are not inclined to admit this appeal even so far as the second question as proposed by the Revenue is concerned. 6In view of the aforesaid, this appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (A. C. RAO, J)