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2019 (4) TMI 664 - AT - Income TaxTDS u/s 195 - reimbursement of Travel expenses & salary costs on seconded employees - simply reimbursement or FTS - levy tax and interest u/s.201(1) and u/s. 201(1A) - Indo Japan DTAA - HELD THAT:- The expenses have been incurred in connection with technical services agreement, they bear a clear nexus with the technical services rendered and part and parcel in the process of service of a technical character. Therefore, the expenditure has been incurred for earning royalty/ FTS. The expenditure is that of service providers and not that of the assessee company. On the issue of the issue of reimbursement of salary costs on seconded employees, the CIT(A) held, inter-alia, that the seconded temporarily employees exchanged experience and skill training by the employer. i.e. the employer in this case is the entity which is seconding and once the term of the secondment is over, they will return back to their original employer and they do not loose the employer-employee relationship of the parent organization. Since the assessee has not become employer of seconded employees, what the assessee paid to Nippon Paint Company Limited and Wuthela Holdings Pte Limited at INR 29,62,869/- is the income of those companies and not in nature of reimbursement of salary. Further, CIT (A) applied the ratios of the Apex court/ HC/AAR and Tribunal. Although, the assessee filed this appeal, it has not laid any material to dislodge the findings recorded by the CIT(A) on the above issues, and hence we do not find any reason to interfere with the order of the Ld CIT(A). Therefore, the assessee’s appeal is dismissed.
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