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2020 (11) TMI 1090 - AT - Income TaxTDS u/s 192 or 195 - expatriate employees seconded to the taxpayer have worked as employees of the taxpayer company - reimbursement of salaries and other expenses as fees for technical services ('ITS') under section 9(1)(vii) of the Act and Fees for Included Services ('FIS')/Royalty under relevant Articles of Indo-USA and Indo- Australia Tax Treaties - Applicability of ‘fee for technical services’ - HELD THAT:- As following the decisions rendered by the coordinate Bench of the Tribunal in taxpayer’s own case for AY 2015-16 [2020 (8) TMI 410 - ITAT DELHI] in the identical facts and circumstances and by following the decisions rendered in the cases of Centrica India Offshore P. Ltd. [2014 (5) TMI 154 - DELHI HIGH COURT], HCL Infosystems Ltd. [2004 (1) TMI 16 - DELHI HIGH COURT], Marks & Spencer Reliance India Pvt. Ltd 2017 (5) TMI 1638 - BOMBAY HIGH COURT] & AT&T Communication Services (India) P. Ltd. [2018 (11) TMI 130 - ITAT DELHI] when relationship of employer and employees between expatriate employees and the taxpayer have been established in view of the Secondment Agreement duly discussed in order passed in taxpayer’s own case for AY 2015-16 (supra) and that taxpayer has duly deducted full tax u/s 192 of the Act being on the income chargeable under the head ‘salaries’, section 195 of the Act has no applicability. Moreover, when expatriate employees seconded to the taxpayer have worked as employees of the taxpayer company, their salary has been rightly subjected to section 192 of the Act and Explanation to section 9(1)(vii) of the Act which apparently makes it clear that salary would not fall within the expression ‘fee for technical services’ has no applicability to the facts and circumstances of the case. Consequently, addition made by the AO and confirmed by the ld. CIT (A) on account of disallowance under section 40(a)(i) of the Act is not sustainable in the eyes of law and hence ordered to be deleted. Grounds determined in favour of the taxpayer. Adjustment u/s 92CA of the Act on account of outstanding receivables from AEs - HELD THAT:- When undisputedly identical issue has already been decided by the TPO in favour of the taxpayer by not imputing any interest on outstanding receivables, the TPO in the instant case has no option except to follow the rule of consistency, as has been held by the Hon’ble Supreme Court in case of CIT vs. Shiv Sagar Estate [2002 (7) TMI 103 - SC ORDER] that when the Revenue has accepted the contention of the applicant in the earlier year, it would not be entitled to challenge that contention in subsequent years. We are of the considered view that when AO/TPO have not brought on record any distinguishable fact they are required to follow the rule of consistency by not imputing any interest to the outstanding receivables. So, this issue is remitted back to the TPO/AO to decide afresh by following the rule of consistency. Ground determined in favour of the taxpayer for statistical purposes.
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