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2018 (2) TMI 2035 - ITAT MUMBAITDS u/s 194J - Disallowance u/s 40(a)(ia) - secondment expenses on which tax was not deducted at source - HELD THAT:- As decided in own case [2017 (1) TMI 1751 - ITAT MUMBAI] the issue is covered by the decision in the case of IDS Software Solutions (India) (P) Ltd. vs. ITO (International Taxation) [2009 (1) TMI 363 - ITAT BANGALORE-A] wherein the facts discussed as regards to where the assessee entered into a secondment agreement with US Company and obtained the services of an employee and the question arose whether the reimbursement bys the assessee to the US Company of the salary paid by the US company was chargeable to tax as “fess for technical services”. As held that though the US Co was the employer in a legal sense but since the services of the employee had been seconded to the assessee and since the assessee was to reimburse the emoluments and it controlled the services of the employee, it was the assessee which for all practical purposes was not chargeable to tax. Though the person deputed by the US Co was a technical person, the consideration paid under the secondment agreement was not “fees for technical services” because the fact that the seconded employee was responsible and subservient to the payer (assessee) and was required to be also act as officer or authorized signatory or nominee of the assessee made it consistent with an agreement for providing technical services. We dismiss this issue of revenues’ appeal. Estimated basis on account of compensation from customers - HELD THAT:- As decided in own case [2017 (1) TMI 1751 - ITAT MUMBAI] this Bench has deleted the identical addition in assessee’s case. Addition of bogus purchases - CIT(A) has restricted the addition to 12.5% - HELD THAT:- The Hon’ble Gujrat High Court in CIT vs. Simit P. Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] has upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases holding that only profit element embedded in such purchases can be added to income of the assessee. We further notice that the AO has not rejected the sale shown by the assessee during the year relevant to the assessment year under consideration. Under these circumstances, there is no justification in making 100% addition of the bogus purchases made by the assessee. In our considered view, the CIT(A) has rightly restricted the addition keeping in view the element of profit embedded in the transaction in question. Accordingly, the finding of the Ld. CIT(A) on this issue is based on the law laid down by the Hon’ble Gujarat High Court rendered in the case referred above. Hence, we do not find any infirmity in the findings of the Ld. CIT(A) to interfere with the same. We, therefore, uphold the findings of the Ld. CIT(A) and dismiss this ground of appeal of the revenue.
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