COMMISSIONER OF INCOME TAX Vs. RAM GOPAL

JUDGEMENT

(1.) This is an appeal against the order of the Income Tax Appellate Tribunal upholding the order of the Commissioner of Income Tax (Appeals) deleting the addition made by the Assessing Officer on the ground that the respondent/assessee had failed to deduct tax at source as required under Section 195 of the Income tax Act, 1961 (in short 'the Act'). This appeal pertains to the assessment year 2007-08.

(2.) The appellant contends that the following substantial questions of law arise in this appeal:-

(3.) The assessee admittedly made payments to two agents, one in Turkey and the other in Mauritius, who were non-residents. The payments were remitted abroad directly. The CIT and the Tribunal set aside the order of the Assessing Officer in view of the circular No. 786 dated 07.02.2000 issued by the Central Board of Direct Taxes. The circular inter alia states that no tax is deductible under Section 195 of the Act in respect of expenditure on export commission and other related charges payable to a non-resident for services rendered outside India. The relevant part of the circular reads thus:-