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2015 (10) TMI 921 - AT - Income TaxSharing of expenses with the holding company - non deduction of TDS u/s 194J - Disallowance of Shared Service Cost under the head Operating & Administrative Expenses - AR's argument to the effect that expenditure so reimbursed have already been made subject to deduction of tax at source in the hands of holding company when the payment was actually made - Held that:- Expenditure incurred by holding company on which tax has already been deducted at source, mere reimbursing of such expenses by the assessee to the holding company cannot be disallowed on the plea that assessee has not again deducted tax at source, otherwise it will amount to double deduction of tax in respect of very same expenditure. However, it appears that the AO has not examined this aspect of deduction of tax at source by holding company in respect of expenditure which requires deduction of tax at source under the provisions of Chapter XVII. In the interest of justice and fair-play, we restore the appeal back to the file of the AO with a direction to verify the deduction of tax at source in terms of provisions of Chapter XVII, Part B and if the AO found that taxes have already been deducted at source in respect of expenditure which requires deduction of tax at source by the holding company while making payment, no disallowance can be made with reference to such expenditure in the hands of the assessee while reimbursing the same to the holding company. - Decided in part in favour of assessee by way of remand.
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