Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 972 - AT - Income TaxDisallowance of Software and EDP expenses - allowable revenue expenditure - HELD THAT:- On appraisal of the above mentioned finding, we find that the Hon’ble ITAT has allowed the claim of the assessee on the basis of the decision of Bombay High Court in the case of Raychem RPG Ltd. [2011 (7) TMI 953 - BOMBAY HIGH COURT] . Since the claim of the assessee has duly been covered by the decision of the Hon’ble ITAT in the assessee’s own case for the A.Y. 2008-09 [2017 (12) TMI 1732 - ITAT MUMBAI] therefore, in the said circumstances, we set aside the finding of the CIT(A) on this issue and allowed the claim of the assessee. Disallowance of reimbursement of expenses under section 40(a)(ia) - HELD THAT:- In DEMPO & CO. PVT. LTD., THE COMMISSIONER OF INCOME TAX [2016 (2) TMI 308 - BOMBAY HIGH COURT] The tax has to be levied and collected. The ship cannot leave the port or if allowed to leave any port in India, it must either pay or make arrangement to pay the tax. Hence, the apprehension of avoidance or evasion both are taken care of by the legislature. That is how advisedly the legislature cast the obligation to deduct tax at source on the person responsible to make payment to a non-resident in shipping business. The term “non-resident” means a person who is not a resident as per section 2(30) of the Income Tax Act and for the purposes of sections 92, 93 and 168, includes a person who is not ordinarily a resident within the meaning of clause (6)of section 6. The term “person” includes an individual, a HUF, a company, firm and every artificial juridical person not falling within any of the preceding sub-clauses of clause (31) of section 2. By section 2(23A), a foreign company is defined to mean a company which is not a domestic company. Hence, any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable under the provisions of this Act not being income chargeable under the head “Salaries”, would have to deduct the tax thereon at the rates in force. Disallowance of payment of license charges on account of non-deduction of taxes at source u/s 195 - HELD THAT:- In view of the decision of the Hon’ble Mumbai ITAT in the case of Shinhan Bank Vs. DDIT(IT) [2016 (7) TMI 1432 - ITAT MUMBAI] we are of the view of the assessee was not under obligation to deduct the TDS on such payment, therefore, no disallowance is liable u/s 40(a)(ia) of the Act. Accordingly, we set aside the finding of the CIT(A) on this issue and allowed the claim of the assessee. Allowance of the claim of assessee in connection with the reimbursement of salary cost of related relocation expenses made on account of availing personnel services from its AEs who has been India on an assignment - HELD THAT:- We noticed that the employees who were serving in India or deputed in India had already deducted tax at source u/s 195 of the Act. The provision of TDS is not applicable on reimbursement of deputation expenses to foreign AE. The CIT(A) has relied upon the decision in the case of Burt Hill Design (P) Ltd. Vs. DDIT (IT) [2017 (4) TMI 49 - ITAT AHMEDABAD] . The facts are not distinguishable at this stage. No law contrary to the law relied by the Ld. Representative of the assessee has been produced before us. In view of the said circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Allowance of claim of assessee in connection with the payment of inspection and survey fees paid to the foreign entities M/s. Intertek Testing Services and M/s. SGS Testing & Controlling Services Singapore falls within the ambit of Section 195 r.w.s. 9(1)(vii) and the Explanation to Section 9(2) - HELD THAT:- We noticed that M/s. Intertek Testing Services and M/s. SGS Testing & Controlling Services Singapore do not make available any kind of technical knowledge, skill or experience or process to the appellant consist of development and transfer of any technical plan or design, hence, does not constitute FTS under the provisions of India-Singapore DTAA. Both the companies were eligible to treaty benefit. The India Singapore treaty comprises of FTS Clause with a requirement of make available i..e. Fee would be in the nature of fee for technical service only if the service make available technical knowledge, skill experience or process to the appellant. Intertek inspect the crude for various chemical and provide a report to the appellant for which certain payment was made. M/s. SGS Singapore also provide the same service. CIT(A) has described the nature of service in his order and accordingly arrived at this conclusion that the nature of service rendered by above said two companies nowhere come within the ambit of Section 195 of the Act r.w.s. 9(1)(vii) of the Act. He also relied upon the decision of the Karanataka High Court in case of De Beers India Mineral P. Ltd. [2012 (5) TMI 191 - KARNATAKA HIGH COURT] and Linklaters LLP [2019 (4) TMI 1474 - ITAT MUMBAI] . The facts are not distinguishable at this stage. Accordingly, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Decided in favour of the assessee.
|