9911796707
TMI Blog2021 (10) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... The matter was admitted to consider the following substantial questions of law: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in denying deduction of expatriate costs under Section 37[1] of the IT Act? 2. Is not the finding of the Tribunal that the Appellant could not establish the commercial expediency in incurring expatriate costs perverse?" 3. The assessee is a foreign company incorporated under the laws of Delaware and has its principal office in Sunnyvale, California, USA. The assessee has set up a branch office in India for providing marketing support services to group entities. The assessee filed its return of income for the Assessment year 2007-08 declaring loss of Rs. 2,30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,35,12,070/- towards expatriate costs disallowed by the Authorities, confirmed by the Tribunal deserves interference by this Court. Placing reliance on the judgment of this Court in the case of PR. Commissioner of Income Tax and Another V/s. M/S. Rambus Chip Technologies [India] Pvt. Ltd., [Rambus India] [ITA No.56/2016, D.D. 31.07.2018 (one of us, Hon'ble SSJ was a member)] and referring to Section 37[1] of the Act, submitted that the tax paid on the salaries of the employees as agreed upon by the assessee with the employees is liable for deduction under Section 37 of the Act. 5. Learned counsel for the Revenue would point out that in M/S. Rambus Chip Technologies [India] Pvt. Ltd., supra, there was an agreement between the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that on the Agreement between the Assessee and the Employee Mr.Prakash Bare, contemplates that the income tax liability on the salary to be paid to the employee Mr.Prakash Bare, shall be borne by the company and this contractual liability agreed upon by the assessee is liable for deduction u/s.37 of the Act. No prohibition in law is pointed out by the learned counsel for the Revenue to deduct the expenditure towards the contractual income tax liability paid by the assessee as an allowable expenditure u/s.37 of the Act." 9. Learned counsel for the assessee strongly argued that the department having accepted the order of Transfer Pricing Officer wherein Rs. 1,35,12,070/- expenditure towards expatriate costs was subjected to tax cannot de ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
