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2018 (6) TMI 1186 - AT - Income TaxIncome accrued in India - FTS - reimbursement received by the assessee for rendering advisory services/technical services for managing the affairs of CIPL - DTAA - Held that:- There does not exist any service agreement between appellant and CIPL. The appellant is also not in business of providing any services. The payments in dispute are made in relation to employment of Mr. Jitesh Avlani who was on payroll of CIPL. Payment of salary costs to Mr. Jitesh was responsibility of CIPL. Part of such costs has been paid by the appellant to Jitesh which were later on reimbursed by CIPL. All the salary costs including those paid by the appellant have been offered to tax in India. The payments made by the appellant to Mr. Jitesh were infact obligations of CIPL and therefore subsequent payments made by CIPL to the appellant are reimbursement in nature. Therefore, it cannot be held that appellant has provided any technical service within meaning of section 9(1)(vii) of the Act or Article 12(4) of DTAA. The impugned payments are not in nature of FTS and hence not taxable in India. Interest u/s 234B of the Act is not leviable in this case as payments made to the appellant were subject to withholding tax u/s 195 of the Act. The ground of appeal is allowed. - Decided against revenue
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