Road freight and selling and administrative expenses to US consignee agent

IT/ILT: Where assessee exporter paid "USA office expenses" viz., ocean freight, duties, warehousing expenses, road freight and selling and administrative expenses to US consignee agent, concurrent finding by appellate authorities allowing substantial part of expenditure on verification of documents, was to be upheld
IT/ILT: Where assessee's US agent did not have any business operations in India and they were functioning and operating in USA, assessee's liability to deduct tax at source under section 195 would not arise
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[2014] 51 taxmann.com 213 (Delhi)
HIGH COURT OF DELHI
Commissioner of Income-tax -IV
v.
Himalya International Ltd.
SANJIV KHANNA AND JAYANT NATH, JJ.
IT APPEAL NO. 437 OF 2014
OCTOBER  16, 2014
Section 9, read with sections 195 and 194C of the Income-tax Act, 1961 read with Article 7 of the OECD Model Tax Convention - Income - Deemed to accrue or arise in India (Business Profits withholding tax) - Assessment year 2005-06 - Assessee exported processed vegetable products to USA - It claimed the "USA office expenses" viz., ocean freight, duties, warehousing expenses, road freight USA and selling and administrative expenses - Assessing Officer held that these "expenses" were in nature of post sale expenses and, therefore, did not pertain to assessee - However, these payments were made to US consignee agent of assessee which was functioning and operating in USA - Both appellate authorities, on verification of documents, allowed substantial part of expenditure - Whether same findings of facts were to be upheld - Held, yes - Whether since assessee's US agent did not have any business operations in India and they were functioning and operating in USA, assessee's liability to deduct tax at source under section 195 would not arise - Held, yes [Paras 9 & 10]