9911796707
TMI Blog2012 (10) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... in his order, are extracted below:- "1.1 Brief facts are that the appellant is a resident company, incorporated under the Companies Act, 1956. It is primarily engaged in providing employment background screening services to its clients, which consists of checks such as education screening, employment screening, address verification, criminal check/verification, reference check, database verification, hiring management services, assessment solution which the clients can choose from. 1.1.1 The appellant has entered into a Reimbursement Agreement with First Advantage Corporation, United States of America ('FADV US'). It has been agreed between FADV India and FADV US that FADV India shall reimburse to FADV US at actual cost (with no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure to FADV US which does not include any element of profit or mark-up and, hence, no TDS is required. (iv) The payment in question being reimbursement of expenditure cannot be regarded as payment for royalty under any of the clauses mentioned under section 9(1)(vii) of the Act; (v) That the payment in question are reimbursement to FADV US towards purchases by the assessee of data card application and support software and, hence, are purely payments for the use of copyright article and not for the right to use any copyright in an article. (vi) The judicial precedence had made it clear that what is royalty is the consideration for the use of or the right to use the copyright in an article and not the right to use a copyrighted artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct tax. Aggrieved, the Revenue is in appeal before the Tribunal on the following Grounds for assessment year 2008-09:- "On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the payment to be made to First Advantage Corporation was not taxable in India, ignoring the fact that the payment made was clearly in the nature of "royalty". 5. Before us, the learned Departmental Representative submitted that the assessee was purchasing software through its associate and it is not a case of reimbursement of expenditure. He submitted that the agreement in question produced by the assessee was entered in July 2009, and whereas the financial year during which the expenditure was incurred was 2007-08. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the agreement are effective from 1st April 2007. This demonstrates that the agreement in question was entered into after 27 and a half months of the transactions. The nature of agreement is at clause-1 / page-70 of assessee's paper book which is extracted for ready reference. "1. Reimbursement of expenses: It is hereby agreed between FADV and FADV India that FADV India shall reimburse FADV for various purchases / upgrades including but not limited to data cards, application, support software and OS/OS upgrades. It is hereby also agreed between FADV and FADV India that FADV India shall reimburse FADV at actual cost." 9. A plain reading of the same demonstrate that FADV is acting as an agent of the assessee for various purchases / ..... X X X X Extracts X X X X X X X X Extracts X X X X
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