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       Sr.No.     Name of the Agent              Country
       1          NJK holdings LLC               USA
       2          Sandrine Corporation           USA
       3          World Avenues Ltd              UK

The Ld. CIT(A) categorically held that since the sum is not chargeable to tax in India u/s 195(1) of the Act in the hands of the non-resident agents. Hence there is no liability to deduct tax at source in the hands of the assesee payer. The Ld.CIT(A) also held that once the sum paid is not chargeable to tax under the provisions of the Act, there cannot be any liability to deduct tax at source and consequentially, there is no requirement for the assessee to make an application u/s 195(2) of the Act seeking either for lower deduction certificate or nil deduction certificate from the ld. AO. The Ld. CIT(A) also placed reliance on the decision of Hon'ble Supreme Court in the case of GE India Technology Center Pvt.Ltd. vs CIT ITA No.862 & 863/Mum/2018 M/s. Shamrock Pharmachemi Pvt.Ltd.

(e) Decision of Hon'ble Madras High Court in the case of CIT vs Orient express reported in 330 taxmann.com 602

(f) Decision of Hon'ble Madras High Court in the case of CIT vs Farida Leather company reported in 238 taxmann.com 473

(g) Decision of co-ordinate bench of this Tribunal in the case of ACIT vs Pahilajarai Jaikishan reprted in 157 ITD 1187 (Mum Trib.)

6. It is not in dispute that the non-resident agents to whom commission was paid by the assessee have rendered services outside India for sale of the goods of the assessee outside India. It is not in dispute that the said non-resident agents do not have any PE in India and that they are domiciled in U.K and USA. In view of these facts, it could be safely concluded that there is no income chargeable to tax in India in terms of section 195(1) of the Act in the hands of the non-resident agents and accordingly, the provisions of section 195(2) of the Act would not come into operation at all. Reliance in this regard had been rightly placed by the Ld. CIT(A) on the decision of Hon'ble Apex Court in the case of GE Technology Center Pvt.Ltd. in 327 ITR 456 (supra), wherein the head notes of the said decisions are reproduced hereunder:-

the situs of the utilization of services which determine taxability of such services in India.

31. Section 195 of the IT Act attracts tax only on chargeable income, if any, paid to a non-resident. Where there is no liability, the question of tax deduction does not arise. Where no part of the income is chargeable in India, even clearance under Section 195(2) or 195(3) of the IT Act is not necessary. The decision of the Karnataka High Court in CIT (International Taxation) v. Samsung Electronics Co. Ltd., [2010] 320 ITR 209/[2009] 185 Taxman 313 (Kar), has been overruled by the Supreme Court in GE India Technology Centre (P.) Ltd. v. CIT [2010] 327 ITR 456/193 Taxman 234/7 taxmann.com 18. The Supreme Court held as under:

The aforesaid is the decision of Hon‗ble Madras High Court in the case of Evolv Clothing Company Private Limited(supra) for AY 2009-10 wherein the Hon‗ble Madras High Court has referred to decision of Hon‗ble Supreme Court in the case of GE Technology Centre Private Limited v. CIT (2010) 327 ITA No.862 & 863/Mum/2018 M/s. Shamrock Pharmachemi Pvt.Ltd.

ITR 456(SC) , wherein Hon‗ble Supreme Court held that what is relevant is the sum chargeable to income-tax under the provisions of the 1961 Act before provisions for deduction of income-tax at source u/s 195 come into service. Thus merely because the assessee has not made an application u/s 195(2), it will not bring the said sum chargeable to income-tax which otherwise is not chargeable to income-tax within provisions of the 1961 Act and provisions of Section 40(a)(i) cannot be invoked to disallow the expenses. The assessee in any case has produced before the AO form no. 15CA and 15CB certified by CA that no income tax was required to be deducted on these commissions paid to overseas agents and it is not shown by the AO as to how the said sum is chargeable to incometax within provisions of the 1961 Act . The taxes can be levied and collected only under authority of law (Art. 265 of Constitution of India). It is for the Revenue to show that as to how the said sum is chargeable to income-tax under the provisions of the 1961 Act. Secondly, Hon‗ble Madras High Court has also in aforesaid case after perusing the agreements held that marketing research abroad or coordination with suppliers were ordinary things which any agent or broker undertook which is incidental to brokerage services and the same were not held to be technical services. The overseas agents in the instant case before us have rendered assistance in getting assessee registered with various authorities and agencies in foreign country as well undertook marketing and sales services which were all incidental to agency business of generating export orders or facilitating imports for the assessee undertook by an agent in foreign country. It is not shown by Revenue that the assessee has made payment separately to these overseas agents towards getting itself registered with authorities/agencies abroad or for getting sales and marketing promotion done for the assessee. These overseas agents are based in foreign countries and have no PE / fixed place of business in India, as there is no material to contrary on record. These agents were not shown by Revenue to be working from India. It is also not shown by Revenue that lumpsum payments were made to these overseas agents but instead these payments were linked to the targets in terms of value and volume of export orders generated or imports facilitated by these overseas agents for the assessee.These overseas agents were not paid commission in India and payments were remitted abroad by assessee from India through banking channel and in case of two overseas agents it is stated that payments were not made by year end. Attention is also drawn to recent decision of Hon‗ble Gujarat High Court in the case of PCIT v. Ferromatic Milacron India Private Limited (2018) 99 taxmann.com 154(Guj.) , wherein Hon‗ble Gujarat High Court held that on payments made to overseas agents towards commission for export orders will not entail deduction of income-tax at source u/s 195 and no disallowance u/s 40(a)(i) is warranted by holding, as under: