HILTON FORGE Vs. JOINT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS appeal by the Assessee is directed against the order dated 22/12/2008 of CIT(A) for the assessment year 2005 -06. The Assessee has raised the following grounds along with Form -36.

(2.) THE ld. CIT(A) has further erred in not agreeing with the remand report filed by Assessing Officer wherein he himself has confirmed that the provision of section 195 are not applicable in the present case and as such there will be no addition of Rs. 8,32,544/ - u/s. 40(a)(ia) of the Income tax Act."

(3.) BEFORE us the ld. Authorized Representative of the Assessee has submitted that this payment was made to M/s. Damstahl GMBH, Germany, against the order for export placed by the said party and on realization of export sales, therefore, the said amount is not a commission or bonus, it is in the nature of a discount which was paid by the Assessee on realization of export sale from the same party. He has referred to the remand report and submitted that AO has mentioned in the remand report that as per CBDT Circular No. dated 07/02/2000 the payment remitted directly abroad to a non -resident operating outside the country, no part of his income arising in India, therefore, no tax is deductible u/s. 195.