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2016 (6) TMI 692 - AT - Income TaxReimbursement of travelling expenses of expatriates received from its clients and also “living allowance” paid by the clients to expatriates (employees deputed by the assessee) - whether such receipt do not constitute income in the hands of the assessee? - CIT(A) deleted the addition - Held that:- It is an admitted fact that the DRP has held in AY 2006-07 and 2007-08 that these receipts, viz., reimbursement of travelling expenses and living allowance paid to expatriates, are not to be considered as forming part of fees received by the assessee. The co-ordinate bench of Tribunal has held in AY 2003-04 and 2004-05 that these items are not taxable in the hands of the assessee. However, we notice that the Tribunal has held so in AY 2003-04 and 2004-05 on the understanding that the assessee herein and Indian companies are not related parties. The Ld D.R has pointed out that they are related parties, which fact was not disputed by the assessee. We have noticed that the addition made by the assessing officer has been deleted by DRP in AY 2006-07 and 2007-08. Identical additions made in AY 2003-04 and 2004-05 have also been deleted by the Tribunal, even though there was misunderstanding about the facts. But the fact remains that the order of the Tribunal passed for AY 2003-04 and 2004-05 remains in operation as of now. We are dealing with AY 2005-06, which falls in between the above said years. Even though there is merit in the contentions of the Ld D.R yet, in order to maintain consistency in the matter, we are inclined to uphold the view taken by the Ld CIT(A), since the same is consistent with the view taken by the DRP in the succeeding years. Accordingly, we uphold the order of Ld CIT(A). - Decided against revenue
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