Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 575 - AT - Income TaxRevision u/s 263 - Non deduction of tds on payments made in pursuance of Cost Allocation and Recharge Agreement’- disallowance u/s. 40(a)(ia) - Held that:- When the Assessing Officer examined the material called for and placed before him by the assessee, which fact is admitted by the Ld. CIT, and the Assessing Officer took a correct possible view in the matter, the order of assessment cannot be termed to be erroneous and prejudicial to the interest of the Revenue. We, therefore, hold that the Ld. CIT was not justified in assuming jurisdiction u/s. 263 of the Act for assessment year 2010-11 in the case on hand and, therefore, cancel the impugned order passed u/s. 263 of the Act on 18/2/2015 for assessment year 2010-10 in the case on hand. Even on merits, we concur with averments of the assessee that where expenses incurred by ‘GSISPL’on its behalf and the same are reimbursed, it is a mere-recoupment of expenses. It would not constitute income of the recipient so as to cast a liability upon the assessee for deduction of tax at source on such payments and, therefore, disallowance u/s. 40(a)(ia) of the Act is not warranted. We find that the very same issue was considered by a Co-ordinate bench of this Tribunal in the assessee’s own case for the assessment year 2009- 10 holding that payments made by the assessee in pursuance of Cost Allocation and Recharge Agreement’ between the assessee and ‘GSISPL’ was purely on account of reimbursement of expenses which were incurred by GSISPL and hence there being no income element involved in such payments, there was no requirement to deduct TDS thereon. - Decided in favour of assessee
|