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2016 (9) TMI 1032 - AT - Income TaxTDS u/s 195 - Disallowance u/s 40(a)(i) - Held that:- The assessee has acted under bonafide belief that no tax has to be deducted at source on these payments. Apart from the bonafide belief the Hon’ble ITAT has further held that as per para 4(b) of Article 12 of Indo-US DTAA fees for included services means “If such services made available technical knowledge, experience, skill, know-how, or processes, or consists of the developments and transfer of a technical plan or technical design”. Since in the present case the training was given to pilots and other staff as per the requirement of the DGCA Rules therefore, training was only a part of the eligibility of the pilots and other staff for working in the industry of aviation and such training would not fall under the term “service make available.” Ld. CIT(A) has rightly held that the disallowance u/s 40(a)(i) is not justify as per the facts of the present case and the same was rightly deleted. Considering the totality of the facts and circumstances of the present case, we are of the view that the learned CIT (A) has passed a reasonable and judicious order. Therefore, we find no reason to deviate from or interfere with the findings of the learned CIT (A). Accordingly, we uphold his order. These grounds of appeal of the revenue stand rejected. TDS deductable for reimbursement of expenses - Held that:- We have noticed that in the assessment order it has been categorically mentioned that mobilization of expenses of ₹ 43,90,000/- were paid to Canada Inc. for acquiring the aircrafts on lease. Mobilisation expenses pertain to expenses incurred on bringing the aircraft from the Country of Lessor to India and hence they are in the nature of expenditure incurred for acquiring the aircrafts as they are covered in the specific lease agreements with the Lessors. We have also perused the orders of CIT(A) where in para number 3.1 of the CIT(A). There is reference of order for previous year wherein it has been categorically mentioned that the TDS was not deductable for reimbursement of expenses by the assessee accompanied for transporting/mobilizing the helicopters in India and in the absence of any embedded income in the reimbursement of these expenses, the question of deducting TDS does not arise. Considering it we are of the view that the learned CIT (A) has passed a well reasoned and judicious order. Therefore, we find no reason to deviate from or interfere with the findings of the learned CIT (A). Accordingly, we uphold his order. This grounds of appeal of the revenue stand rejected.
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