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2013 (12) TMI 1044 - ITAT MUMBAIDisallowance u/s 40(a)(ia) – Held that:- The assessee availed services from some third parties. Payment for such services was made to such third parties through the medium of its holding company. Such payment cannot be considered as reimbursement of expenses at cost to its holding company - In order to invoke the provisions of section 40(a)(ia) it is of paramount importance to ascertain the chargeability of the amount to tax in the hands of such persons who were eventual receivers - The payment includes income element but it still may not be not chargeable to tax under the provisions of the Act and/or the relevant Double Taxation Avoidance Agreement - Unless the chargeability of such amounts is established in the hands of such trainers, the provisions of section 195 cannot apply and ex consequenti, the application of section 40(a)(ia) is ruled out – The issue was restored for fresh decision.
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