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2012 (7) TMI 310 - AT - Income TaxDisallowance u/s 40(a)(i) - reimbursement of the expense made to various overseas companies - Held that:- Since the expenditure to foreign companies was reimbursed to overseas companies for the expenses incurred on behalf of the assessee company and their margin for the services rendered outside India, therefore, such payment does not falls under the purview of “sum chargeable under the provisions of the Act”. Hence, these payments are not liable to TDS u/s. 195 and consequently the expenditure alongwith the margin reimbursed to the overseas companies for service rendered outside India becomes allowable expenditure and the same is outside the rigors of section 40(a)(i). Since the assessee has a book loss and was not subject to tax u/s. 115JB. Hence, disallowance of interest paid on TDS and service tax are of no relevance with regard to the tax calculated - in favour of assessee.
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