The Commissioner Of Income Tax-12 v. M/S.armayesh Global

ttm IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.1073 OF 2011 The Commissioner of Income Tax-12.. AppellantVs.M/s.Armayesh Global.. Respondent. Mr.Ravindra Lokhande for the appellant Mr.Rajiv Waglay i/b M/s.Juris Parmar Chambers for the respondent CORAM: J.P. DEVADHAR & K.K. TATED, JJ.DATE: 12TH OCTOBER, 2011. P.C. 1. Whether the amount of Rs.86,51,484/- paid by the Assessee to the non-resident was towards the fees for technical services covered under section 9(1)(vii) of the Income Tax Act, 1961 is the question raised in this appeal. 2. The Assessment Year involved herein is Assessment Year 2007-2008. 3. The Assessee is a firm engaged in the business of manufacture and export of hand made embroidery and handicraft items. During the course of assessment proceedings, the Assessing Officer noticed that the Assessee had made payment of Rs.86,51,484/- to Indi Jack Ltd, a non resident without deducting tax at source. The Assessing Officer was of the opinion that the amount paid to the said non-resident for rendering managerial services covered under Section 9(1)(vii) of the Act and therefore, the Assessee was required to deduct tax at source before making payment to the non-resident. As the Assessee had failed to deduct the tax at source, the Assessing Officer disallowed the entire expenditure under section 40(a)(ia) of the Income Tax Act, 1961. 4. On appeal filed by the Assessee, the CIT (A) on perusal of the clause in agreement held that amount paid by the Assessee were partly towards commission and partly for rendering managerial services covered under section 9(1)(vii) of the Income Tax Act, 1961. On further appeal filed by the Assessee, the ITAT by the impugned order held that the entire payments made to the non resident were towards commission and not for rendering technical/managerial services. 5. In our opinion, when the CIT(A) on perusal of the clauses in the agreement held that part of the amount paid was towards commission and part of the payment was towards rendering technical/managerial services, the ITAT ought to have specifically dealt with those findings recorded by the CIT(A). 6.Since the ITAT has not specifically dealt with the findings recorded by the CIT(A), by consent, the impugned order dt.23.2.2011 passed in ITA No.882/Mum/2011 relating to Assessment Year 2007-2008 is quashed and set the CIT(A), by consent, the impugned order dt.23.2.2011 passed in ITA No.882/Mum/2011 relating to Assessment Year 2007-2008 is quashed and set aside and the matter is restored to the file by the ITAT for fresh decision in accordance with law. 7. The appeal is disposed off accordingly with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)