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2016 (10) TMI 179 - ITAT COCHINDisallowance under the head Branding Expenses - liability to deduct tax on the payment made u/s 195 - whether expenses paid to a company established in the United Kingdom and having no permanent establishment in India, and are in the nature of reimbursement of expenses? - Held that:- No doubt the branding expense has been incurred outside India and as is evident from various records available and also the application made under the FEMA regulation in Form 15CA. It is also not the case of the Assessing Officer that this has been incurred in India. The recipient Muthoot Global Transfers Pvt. Ltd. being a foreign company registered under the UK laws, cannot be held to have any business connections in India, though they are carrying out the service for some of the group concerns. it is also not the case of the Department that they are having any permanent establishment in India. As stated by the Ld. Counsel if at all they are taxable it will be under the UK laws. Therefore, in our considered view, the assessee company is not liable to deduct tax on the payment made. The assessee company has also been earning income and incurring expense which would establish that the expenses have been laid out and expended in the course of carrying on of the business. - Decided in favour of assessee Disallowance u/s 14A r.w.r. 8D - Held that:- It is a fact that assessee has not earned any exempt income during the year. These investments have been exclusively in the shares of foreign companies as evidenced by Schedule 5 of the audited Balance Sheet produced. Thus e investments are made in foreign companies, we hold that section 14A r.w.r. 8D has no applicability to the facts of this case. See Kariali Steels and Alloys (P) Ltd. vs. JCIT [2016 (2) TMI 79 - ITAT COCHIN] - Decided in favour of assessee
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