The Income Tax Appellate Tribunal (ITAT), Delhi, in a ruling favouring Adidas India has observed that the amount of buying commission paid as per the buying agency agreement would not amount to “Fee for Technical Services” and therefore, no TDS is leviable under the provisions of the Income Tax Act, 1961.
The Assessing Officer, for the relevant year, disallowed the payments in respect of buying agency charges paid by assessee to Adidas International Trading BV (‘aIBV’) by invoking u/s 40(a)(i) of the Income Tax Act.
The Tribunal bench comprising Sh. Anil Chaturvedi, Accountant Member and Sh. Yogesh Kumar, Judicial Member has held that the issue of buying commission paid in response to buying agency agreement for activities of coordination with the manufacture for procurement of goods by the assessee is already dealt by the Tribunal in an earlier case wherein it was held that the consideration paid by the assessee cannot be classified as fee for technical services and accordingly, not liable for deduction of tax at source and disallowance under section 40(a)(i) is not warranted.
“Before us, no material has been placed on record by the Revenue to demonstrate that the decision of the Tribunal in assessee’s own case in earlier years has been set aside, stayed or overruled by higher judicial forum. Further, Revenue has also not pointed to any distinguishing feature in the facts of the case in the year under consideration and that of earlier years. We therefore following the decision of the Co-ordinate Bench of Tribunal, are of the view that no addition is called for in the present ground,” the Tribunal said.
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