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2017 (12) TMI 1832 - AT - Income TaxAddition on account of reimbursement of repair charges - spare parts purchased from its AE - HELD THAT:- Reimbursement of actual cost of purchase, then ostensibly there is no requirement of tax deduction at source or withholding of tax while making the payment to non-resident which is not in the nature of income to the non-resident India. It is not the case of the Revenue that there is an element of income which is chargeable to tax in the hands of the non-resident on account of purchase transaction of spare parts and once that is so, then no withholding of tax is required, which proposition has been upheld in various judgments as cited by the learned counsel including that in the case of GE India Technology Centre Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT] Assessee has not furnished any bill/vouchers invoices for the purchase or assessee could not furnish details of parties to whom it had rendered repair services, we find that assessee had given the detail of the spare parts purchased from its AE, a copy of which is appearing at page 16 of the assessee's paper book which gives the description of the product; the purpose for which such product was purchased; month of purchase amount in US dollars; and conversion date as on debit date, etc. These details goes to show that the products have been imported from the AE for which assessee had made the payment on cost to cost basis. Thus, it cannot be held that the assessee has not imported or purchased the spare parts from its AE and once it is established that the spare parts have been imported, then, liability to pay for the cost of spare parts to its AE arises to the assessee. Further, to prove that assessee has utilized these costs, it has filed copies of AMCs with various parties in India on sample basis. Reasoning given by the Assessing Officer for making the addition on both the counts does not survive and accordingly, ground as raised by the Revenue is dismissed. Addition on account of expenses claimed in the P & L account - HELD THAT:- As cost of expenditure on account of AE has been loaded by the assessee so as to suggest that the loss incurred by the assessee is attributable due to loading of the cost of the AE. In any case, once the transaction with the AE has not be disturbed and the ALP has been accepted, then such an inference drawn by the Assessing Officer cannot be held to be justified. Learned counsel has also pointed out before us that in all the past year the assessee's case has been made in scrutiny proceedings and in none of the years, there is any whisper that losses incurred by the assessee is an account loading of cost by foreign entity on the assessee. In the past also transfer pricing analysis has been undertaken by the assessee has been accepted in wake of these fact also, the observation and the conclusion of the Assessing Officer is definitely ill founded and cannot be sustained and the order of the ld. CIT(A) in deleting the said addition is confirmed. Revenue appeal dismissed.
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