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2013 (1) TMI 156 - AT - Income TaxPayments towards services availed from HSL for operating and maintaining an integrated Steel plant - whether in the nature of reimbursement? - whether attracts the provisions of s.194J or not? - Held that:- As per SAA the share capital of Hospet Steel Ltd [HSL] was held by the assessee and Mukund Ltd [ML] in equal proportion and the investment in the said steel making facilities has been made by SAA constituents in the ratio of 41.38 and 58.62 by the assessee and ML respectively. As per the terms of SAA, the assessee and ML have reimbursed the expenses incurred by HSL in performance of its obligations. As rightly argued by the AR, the said reimbursement was on cost to cost basis and the same is evident from the P&L account and debit notes raised by HSL on the assessee and ML for the concerned assessment years. Therefore, the said payments did not comprise of any income component. Thus, the reimbursement of such expenses incurred by HSL cannot be categorized as in the nature of fees towards professional and technical services. As decided in DECTA v. CIT [1996 (5) TMI 385 - AUTHORITY FOR ADVANCE RULINGS] the amount of contribution received/receivable to recover part of the cost of technical assistance provided by the applicant under the provisions of its aid programme to the companies assisted by it in India is neither income of the appellant under the provisions of the Income-tax Act nor fees for technical services. Thus taking into account the facts and circumstances of the issue the reimbursements of payment by the assessee and ML to HSL cannot be regarded as income in the hands of HSL. Relying on CIT v. Expeditors International (India) (P) Ltd. [2011 (12) TMI 104 - DELHI HIGH COURT] the said payments being in the nature of reimbursements on cost to cost basis and thus, the said payments did not constitute income in the hands of HSL and, therefore, the assessee as well as ML were not liable to deduct tax at source u/s 194J - in favour of assessee..
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