Principal Commissioner Of Income Tax 2 v. Appearance: For The Opponent(S)

C/TAXAP/265/2019 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 265 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE J.B.PARDIWALA andHONOURABLE MR.JUSTICE A.C. RAO ==========================================================1 Whether Reporters of Local Papers may be allowed to NOsee the judgment ?2To be referred to the Reporter or not ?NO3 Whether their Lordships wish to see the fair copy of the NOjudgment ?4 Whether this case involves a substantial question of law NOas to the interpretation of the Constitution of India or any order made thereunder ?========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 2 Versus M AND B ENGINEERING LTD. ========================================================== Appearance: for the Opponent(s) No. 1 MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO Date : 09/07/2019 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1.This 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 Bench 'D'. Ahmedabad in ITA No.355/AHD/2018, dated 30/11/2018 for the A.Y 2014-15. 2.The revenue has proposed the following questions of law:- “Whether the Appellate Tribunal had erred in law and on facts in upholding the order of the CIT(A) deleting the addition made on account of disallowance of Rs.2,93,56,350/- under section 40(a)(ia) of the Act for non-deduction of tax on commission payable to foreign agents.” 3.This tax appeal has something to do with the 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.2,93,56,350/- 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 questions of law as proposed by the revenue has no longer integreta in view of the decision of this Court in the case PR CIT Vs. MGM Exports rendered in Tax Appeal No.309 of 2018, dated 11/04/2018. 4.The ratio of the decision of this Court, which has been applied by the tribunal 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. Ultimately, the tribunal held as under:- “The principles laid down in the above cited judgments are squarely applicable to the instant facts of the case. Thus, it can be safely concluded that the Commission income in the hands of foreign agent is not chargeable to tax in India in the given facts & circumstances. Once an income is not chargeable to tax in India then the question of deducting TDS under the provision of section 195 of the Act does not arise. Accordingly, we do not find any reason to interfere in the order of ld. CIT-A. Hence the ground of appeal raised by the revenue is hereby dismissed.” 5.Having regard to the findings recorded by the tribunal relying on the decision of this Court referred to above, we are of the view that no error much less an error of law could be said to have been committed by the tribunal in passing the impugned order warranting any interference in the present appeal. There is no substantial questions of law in the present appeal. The appeal, therefore, fails and is hereby dismissed. (J. B. PARDIWALA, J) aruna (A. C. RAO, J)