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2017 (8) TMI 290 - BOMBAY HIGH COURTShared Services Cost - allowable business expenses - reimbursement of expenses to its Holding Company - whether expenses made do not appear to be reasonable and are on the higher side? - TDS liability - Held that:- The Tribunal has considered that the present year was the first year of its operation, and therefore, during the year under consideration, the revenue was not very large, whereas it had to incur large cost to establish itself in the market. The assessee has incurred expenditure so that people can know it in the market and its services and get business which could earn its revenue. The said finding of fact appears to be plausible one. Even on reimbursement to the Holding Company of estimated cost of expenses, it could not have been subjected to tax as income as considered by this court of in M/s. C.U. Inspections (I) Pvt. Ltd. [2015 (8) TMI 1398 - BOMBAY HIGH COURT]. The Tribunal has given opportunity to the assessee as well as the Assessing Officer to verify the deduction of tax at source and if the Assessing Officer finds that tax has already been deducted at source in respect of expenditure which requires deduction of tax at source by the Holding Company, then no disallowance can be made with reference to such expenditure in hands of the assessee for reimbursement to the Holding Company. It is for the Assessing Officer to verify the same.
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