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2019 (1) TMI 107 - AT - Income TaxTPA - disallowance of payment of management services and unit charges [MSU charges] by the assessee to its AEs - MSU charges not accepted as international transactions the payments for these services are duplicative and when the assessee has already paid for support services and the payments for which have been accepted by the TPO - Held that:- Agreement has not been properly appreciated by the lower authorities. In the light of this agreement, we are of the considered opinion that there is no payment for duplicative services and the payment of ₹ 1,45,06,572/- is distinct as MSU charges and adjustment made by the TPO is uncalled for and deserves to be deleted It is pertinent to mention here that in the financial statement of the assessee, there is no expenditure relating to the employees cost and in the notes annexed and forming part of the financial statement at clause 10A it has been specifically mentioned that no provision for retirement benefits has been made in these accounts as there were no employees about the payroll of the company during the year. The sales of LNG could not have been achieved without the aid of support staff and the same was provided by BGEPIL. - Decided in favour of assessee. TDS u/s 195 - Disallowance of the expenditure on account of time-writing charges - assessee has not deducted tax at source - Held that:- ‘Make available’ means the person acquiring the services is enabled to apply technology contained therein on his own in future without recourse to the service provider which means that the knowledge must remain with the service recipient once service has ended and thereafter, service recipient is at liberty to use the technical knowledge, skill know-how and processes. The service provided by employees of BGIL are merely in the nature of routine support services and, therefore, cannot be termed as ‘FTS’ under Article 13 of the India UK DTAA. No requirement for the assessee to deduct taxes from such payments in India u/s 195 of the Act. We, accordingly, direct the Assessing Officer to delete the addition - Decided in favour of assessee.
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