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2023 (11) TMI 275 - AT - Income TaxTP Adjustment - ALP of the International transactions pertaining to the provisions of “ITES” - comparable selection - HELD THAT:- TCS and eClerx are not comparable with the Assessee in any mode such as Revenue Turnover, Fixed Assets, Brand Value, Brand Contribution, Risk, Nature of Services, Related Party Transaction etc., hence for the just decision of case and for the ends of justice, we are inclined to direct the Ld. AO, to exclude “TCS” and “eClerx” from comparables companies and determine the ALP accordingly, hence directed accordingly. TDS u/s 192 or 195 - Disallowance u/s 40(a)(i) - non deduction of TDS on reimbursement of salary of employees seconded - HELD THAT:- The meaning assigned to a particular word in a particular statute cannot be imported to a word used in a different statute. Taxation depends upon the language of the charging section and what is brought to tax within the four corners of the charging section. Therefore, one should be careful and cautious when applying the ratio of judgments relating to one tax enactment as a precedent in a case relating to another tax enactment. This rule of caution is important and should not be overlooked, more so when the language of the enactment and the object and purpose of the enactment are different. It is also well- settled that ratio decidendi of a case from one enactment, cannot be applied to an altogether different legislation. From the facts and circumstances as demonstrated by the parties, the observations made by Ld. DRP and the points as summarized in the said charts and on examination by us independently, we are of the considered view that the facts and issues involved in the cases of Centrica and Northern Operating Systems [2022 (5) TMI 967 - SUPREME COURT] were altogether different and distinct from the facts and issues involved in the Assessee’s case, as the Hon’ble Apex Court, in those cases dealt with different facts, issues and Acts and therefore dictum laid down in those case, is not applicable to the instant case. We also observe that the CBDT, vide its Circular No. 720 dated 30-08-1995(PB-703) has clarified that payment of any sum, shall be liable for deduction of tax, only under one section and therefore are in concurrence with the Assessee to the effects that as the Assessee deducted TDS u/s 192 on such expenses debited as salaries paid to the ex-patriate employees and therefore in view of the above Circular No. 720, not liable to deduct the TDS under any other section. The employees to whom the part salary were paid by Serco UK on behalf of the Assessee, have admittedly offered such salary amount as income by filling their Returns of Income in India and duly paid the income tax applicable and ITRs filled by said employees have also been accepted and therefore by treating the salary amount as “FTS” provided, shall jeopardize the rights of Assessee and its employees and Serco as well and also amount to double taxation. Hence we are inclined to hold that the Assessee has reimbursed the salaries amount paid to its employees seconded through Serco UK and not the Fees for any Technical Service (FTS) and therefore was not liable to deduct the TDS u/s 195 of the Act and thus in our considered view, correctly deducted the TDS u/s 192 of the Act and therefore no addition/disallowance is warranted. Thus delete the addition as made on account of disallowance under section 40(a)(i) of the Act, for non- deduction of TDS u/s 195 Assessee appeal allowed.
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