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2023 (6) TMI 932 - AT - Income TaxFees for Technical Services [FTS] - Receipt of Cost-to-cost reimbursements on account of secondment of employees - seconded personnel are employees of EY India firms - Whether payments received by the assessee on account seconded employees should not be taxed as FTS/Independent Personal Services [IPS] as per the treaty provisions? - whether arrangement between the assessee and Indian entities constitutes the ‘provision of services’ by the assessee through seconded personnel? - HELD THAT:- EY LLP India is alone responsible for complying with the requirement of withholding of tax under the Indian Tax Laws. As in light of the deputation agreement, we are of the considered view that cost to cost reimbursement on account of secondment of employees cannot be treated as FTS as defined under Article 12 of India USA-DTAA and seconded personnel are employees of EY India firms whose income has been taxed as salary in their respective hands. Therefore, the very same amount could not, in law, be subjected twice – firstly in the hands of the seconded employees working in India and secondly again the hands of the assessee. AO is accordingly, directed to delete the impugned addition.
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