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2022 (5) TMI 1520 - AT - Income TaxTDS u/s 195 - addition u/s. 40(a)(i) - non-deduction of tax at source on payment made by the assessee towards reimbursement of expenses to a non-resident company in USA - element of income involved or not? - HELD THAT:- The issue in hand is squarely covered in favour of the assessee by the earlier order in assessee’s own case wherein held as sole purpose to deduct income tax from the payments made to the recipient on the amount u/s.195(2) to realise a part of the tax due from the recipient of the amount. Further, where the assessee fails to deduct TDS and the recipient of the amount has been taxed of such amount then the same amount cannot be taxed in the hands of the assessee itself as it would amount to double taxation for the same amount, which cannot be the intention of the law. Hence, we set aside the orders of the lower authorities and vacate the disallowance - there is no basis for the AO to conclude that the payment of reimbursements were in the nature of FTS - See own case for the AYs 2002-03 and 2003-04 [2017 (12) TMI 299 - ITAT KOLKATA] Also on perusal of the order of the coordinate bench of ITAT Kolkata in the case of Timken Inc, USA [2017 (12) TMI 299 - ITAT KOLKATA] i.e. the payee placed on record, we find that it is a detailed order analyzing the full facts and circumstances of the case dealing with the same transaction from the payee side for the same year under consideration which answers our query and covers the instant matter squarely in favor of the assessee. We find no reason to disagree with the submissions made by assessee to delete the addition made by the Ld. AO. We find that the ld. CIT(A) has rightfully deleted the addition made by the Ld. AO - Decided in favour of assessee.
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