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2020 (3) TMI 938 - AT - Income TaxTDS u/s 195 - Disallowance of reimbursement of demurrage charges u/s 40(a)(ia) - whether the status of a person making the expenditure has to be a non-resident before the provision to section 172 of the Act can be invoked ? - HELD THAT:- On a perusal of the order of the Tribunal we find that this issue has been decided in favour of the assessee by the Coordinate Bench following the decision of the Hon'ble Bombay High Court in the case of the CIT v. Dempo and Co. Pvt Ltd. [2016 (2) TMI 308 - BOMBAY HIGH COURT] Once section 172 falls in Chapter XV titled as Liability in Special Cases – Profits of Non-residents, then section 172 is referable to section 44B. Both provisions open with a non-obstante clause and whereas section 44B enacts special provisions for computing profits and gains of shipping business in case of non-residents section 172 dealing with shipping business of non-residents is enacted for the purpose of levy and recovery of tax in the case of any ship belonging to or chartered by a non-resident operated from India. These sections and particularly section 172 devise a scheme for levy and recovery of tax. The sub-sections of section 44B denote as to how the amounts paid to or payable would include demurrage charges or handling charges or any other amount of similar nature. The sub-sections of section 172 read together and harmoniously would reveal as to how the tax should be levied, computed, assessed and recovered. Therefore, there is no warrant in applying the provisions in chapter XVII for collection and recovery of the tax and its deduction at source vide section 195. - Decided in favour of assessee. TDS u/s 192 - Reimbursement of salary cost which was on account of availing personnel services from its AE’s who were sent to India at secondment - HELD THAT:- As perusing the orders of the authorities below and the decision of the Coordinate Bench in assessee's own case for the A.Y. 2010-11 [2019 (10) TMI 972 - ITAT MUMBAI] we find that the Coordinate Bench of the Tribunal dismissed appeal of the revenue and sustained the order of the Ld.CIT(A) in deleting the disallowance of expenses relating to reimbursement of salary cost as noticed that the employees who were serving in India or deputed in India had already deducted tax at source u/s 192 of the Act. The provision of TDS is not applicable on reimbursement of deputation expenses to foreign AE. The CIT(A) has relied upon the decision in the case of Burt Hill Design (P) Ltd. [2017 (3) TMI 1515 - ITAT AHMEDABAD] . The facts are not distinguishable at this stage. No law contrary to the law relied by the Ld. Representative of the assessee has been produced before us. In view of the said circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage - Decided against revenue.
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