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2017 (3) TMI 1163 - AT - Income TaxTreatment of re-imbursement of certain expenses as fees for technical services - Held that:- So far as the fact of the case as well as the terms and conditions of the expartiate agreement is concerned, we do not find any material variations in the terms and conditions of the secondment in the case of the assessee as well as in the cases which were considered by the Tribunal while giving the finding. The learned Authorised Representative has referred to the communication with the assignees by the assessee and submitted that the assignees would not get any right of a continuous employment with the assessee after termination or on expiry of the present assignment. In our view even if there is a restriction of the right to continue in the employment with the assessee the same would not prove that the relationship between the BIAL and the assignees is employer and employee. The terms and conditions of the employment of the assignees with the assessee cannot determine the relationship between the assignees and the BIAL. Further even if the assignment tenure is relatively longer that would not amount to cessation of the existing employment of the assignees with the assessee. Authorised Representative has given much stress to a particular word that the provision of services as per the definition under the DTAA has to be rendered by technical and other personnel as against the definition under Section 9(1)(vii), it is the provision and service of technical or other personnel. Thus he has emphasized that there is a difference in the language used in the DTAA. We find that the definition of Fees for Technical Services as per the first limb as provided under Section 9(1)(vii) of the IT Act as well as Article 12(4) of DTAA means payment to any kind in consideration for rendering of any managerial, technical or consultancy services and to that extent, the definition of Fees for Technical Services under IT Act as well as DTAA is identical. In this case, when the payment is considered for managerial service then it becomes irrelevant to go into second aspect of provision of service by technical or other personnel as used in Article 12(4) of the DTAA. In view of the above discussion as well as in the facts and circumstances of the case, we do not find any distinguishing facts or circumstances in the case of the assessee to take a different view as taken by this Tribunal in the earlier decision. Hence, by following the earlier decisions of this Tribunal, we decide this issue against the assessee. Jurisdiction of the DRP for enhancing the total income - treatment of reimbursement of expenses received by the assesse as FTS liable to be taxed in India - Held that:- DRP issued a show cause notice to the assesse. The assessee duly contested this issue before the DRP. Thus it is clear from the record that this issue of treating the reimbursement of expenses as FTS was a subject matter of adjudication before the DRP and therefore while deciding the issue which was a subject matter before DRP, the question of jurisdiction cannot be raised even if the outcome of the adjudication of the subject matter may result enhancement of total income as held by the Hon’ble Supreme Court in the case of Hukumchand Millls Ltd. Vs. CIT [1966 (9) TMI 38 - SUPREME Court] as well Ahmedabad Electricity Co. Ltd. Vs. CIT [1992 (4) TMI 29 - BOMBAY High Court]. The full bench of Hon’ble Bombay High Court while deciding the issue of the powers and jurisdiction of the Tribunal to enhance the tax liability has held that the Tribunal while dealing with an appeal enhance the tax liability of the assesse if it accept the contention of the Department. Thus it is clear that while deciding an issue before the authority even if no express power of enhancement is provided under the Act it has inherent power to decide the issue which may result enhancement of tax liability. In view of the above facts, we do not find any substance in the objections raised by the assessee.
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