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2014 (4) TMI 305 - ITAT AHMEDABADDeletion of disallowance u/s 40(a)(ia) - employees on deputation – Amount paid as reimbursement of manpower costs and professional charges - Liability to deduct TDS – Held that:- CIT(A) rightly held that the Mudra is not into the business of supply of manpower or rendering services by providing its employees to others - There is no element of profit involved in the transaction – the amount paid does not warrant deduction of TDS - the amount paid is the exact amount of salary paid by Mudra to its employees - the payment has been made for the actual period for which the persons were on deputation - the payment made has no element of profit which is a primary condition for treating the nature of payment to be that in the nature of Professional Fees - Mudra has not been nor was it into the business of supply of manpower or rendering service by providing its employees. The expenses claimed was purely "Reimbursement Of Salary Of Deputed Personnel" and in the nature of "COST SHARING" based purely on distribution of cost as per work done and hence cannot be disallowed under section 40a(ia) – Relying upon M/s. Utility Powertech Ltd. Vs. ACIT [2013 (10) TMI 94 - CESTAT AHMEDABAD] - The assesee has actually shared the cost with MUDRA to the extent of actual utilization of employees time, and there has been no profit element involved at all - the amounts paid purely as reimbursement of manpower cost cannot be subjected to TDS - the payment was nothing but a reimbursement as admitted by CIT(A) – thus, there is no need to interfere in the order – Revenue could not brought any contrary material - Decided against Revenue.
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