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2023 (11) TMI 187 - AT - Income TaxTDS u/s 195 on payment of secondment cost - disallowance made u/s. 40(a)(i) for non deduction of tds - payment to the US and other entities were not in the nature of reimbursement, and the assessee is under obligation to deduct TDS - as per AO payment so made would be ‘fees for included services’ under DTAA and ‘fees for technical services’ u/s 9(1)(vii) - CIT(A) deleted the addition - assessee being resident corporate assessee is stated to be engaged in manufacturing and sale of moving machineries - HELD THAT:- The undisputed position that emerges is that the assessee has reimbursed the salary cost of seconded employees on cost-to-cost basis without any profit element. The assessee has duly deducted tax at source from these payments u/s 192 which is evidenced by the copies of Form 16 as placed on record. The same would show that the stated employees have worked under the supervision and control of the assessee. Once tax has been deducted u/s 192, there would be no requirement of TDS u/s 195 again while reimbursing the same to the foreign entity on cost-to-cost basis. Decided in favour of assessee. Depreciation on computer software @60% - AO, treating the same as intangible asset, restricted the same to the extent of 25% and made disallowance - HELD THAT:- The functioning of the computer and the software was interlinked and inseparable. Therefore, the software would be eligible for same rate of depreciation. We are of the considered opinion that software is an integral part of computer system and the same would be eligible for same rate of depreciation as applicable to computer system - See M/S. COMPUTER AGE MANAGEMENT SERVICES PVT. LTD. [2019 (7) TMI 1153 - MADRAS HIGH COURT] - Decided in favour of assessee.
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