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2019 (7) TMI 534 - AT - Income TaxPenalty u/s.271(1)(c) - Reimbursement of cost inclusion in the total income of the assessee, addition on account of Receipt for IT Support and Managerial services - HELD THAT:- Quantum appeal of the assessee came up for consideration before the Tribunal in [2019 (7) TMI 402 - ITAT PUNE] which has been disposed off vide a separate order by holding that Reimbursement of cost cannot be included in the total income of the assessee. Similarly, the other addition on account of Receipt for IT Support and Managerial services has also been deleted by holding that the same is not includible in the total income of the assessee either as Royalty or Fees for technical services. Thus, it is seen that both the additions made in the assessment order stand deleted. Since the second addition, forming bedrock of the extant penalty, does not survive anymore, there remains no question of any penalty thereon. As such, we uphold the impugned order deleting the penalty. “Fees for technical services” (FTS) - reimbursement received by the assessee from Faurecia Technology Center India Pvt. Ltd. towards part of salary paid by it to the expatriate which was treated by the AO as and included in the total income - HELD THAT:- This ground are similar to those of the preceding year. In the order passed for the A.Y. 2011-12, the Tribunal has held that the amount received by the assessee for rendering of IT support services and Managerial services can neither be construed as Royalty nor as Fees for technical services. Following the same view, we direct to delete the addition. Treating income from providing IT support services taxed as Royalty as well as fees for technical services (FTS) - HELD THAT:- It is observed from the “Costs Allocation Agreement” between the assessee and Faurecia Technology Center India Pvt. Ltd. a resident of France, rendered services to the Indian entity which have been narrated in Exhibit-1 of the agreement. On going through the nature of services, it is seen that these are similar to the Technical services provided by Faurecia Automotive Holding, France, to Faurecia Technology Center India Pvt. Ltd., which the Tribunal has dealt with in its order for the A.Yrs. 2011-12 and 2012-13. The Tribunal has held that such services are not in the nature of Royalty/FTS and accordingly deleted the addition. The ld. DR fairly admitted that the Technical services discussed in the case of M/s. Faurecia Automotive Holding are similar to those rendered by the instant assessee. We order to delete the addition.
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