TMI Blog2022 (5) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... re, it was concluded by the ITAT that the reimbursement of such expenses by the assessee cannot be held liable for TDS. Thus we hold that the assessee is not liable for TDS in respect of payment to M/s.Brand Union Worldwide Limited, London. Therefore, the expenditure cannot be disallowed by invoking the provisions of section 40(a)(ia) - assessee appeal allowed. Write back of excess provision towards additional salary - HELD THAT:- In view of the remand report, it is clear that for the current assessment the assessee had added back the provision on salary and offered the same as income. In the meanwhile the A.O. for assessment year 2008-2009 had disallowed the said expenses as provision and added back the same to income, which tantam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 40(a)(i) of the Act as tax has not been deducted. 2. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in charging write back of excess provisions for salary of Rs.10,00,000/- to tax in as such excess provision has already been charged to tax in assessment year 2009-2010 and hence, resulting into double taxation. 3. On the facts and circumstances of the case and in law, it should be held that the education cess, including secondary and higher education cess (cess) is not inadmissible as per section 40(a)(ii) of the Act and hence, the amount of Rs.9,27,389/- or such other amount as may be determined for the assessment year under reference should be allowed as an admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid reimbursement is not chargeable to tax in India is not acceptable. First of all, the assessee's contention that the amounts paid are only re-imbursement of cost without any mark-up is of no consequence, because the actual payment was made in respect of usage of Lotus Note E-mail and Abode Photoshope, which is in the nature of payment for professional serivces. The assessee had availed the services in India and hence it definitely comes under the purview of section 195 of the Income tax act. Therefore, an amount of Rs.1,20,013/- is disallowed as per the provisions of section 40(a)(ia) of the income tax act and added back to the return income of the assessee. 3.1 The CIT(A) confirmed the view taken by the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of software. It was further held by the Tribunal that the assessee s holding company procures software from third party and shared the cost with the assessee along with other group companies on a proportionate basis without any mark up. Therefore, it was concluded by the ITAT that the reimbursement of such expenses by the assessee cannot be held liable for TDS. The relevant finding of the Tribunal in assessee s own case for assessment year 2011-2012 (supra) reads as follows:- We have perused submissions advanced by both sides in light of records placed before us. 8. We note that, the payment made by the assessee is towards license fee in respect of the use of software. The said issue is no Page 6 of 9 ITA No. 723/Bang/2020 more r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d provided an amount of Rs.10 lakh towards additional salary and as it was only a provision, the same was disallowed by the A.O. and added back to the income of the assessee for assessment year 2009-2010. For the current assessment year the assessee did not make any claim as regards non-taxability of write back of provision of Rs.10 lakh, during the course of assessment proceedings before the A.O. However, the claim was made as an additional ground before the CIT(A). The CIT(A) rejected the claim of the assessee. 4.1 Aggrieved, the assessee has raised this issue before the Tribunal. The learned AR has relied on the remand report submitted by the A.O. (remand report dated 21.10.2019) (refer page 87 to 89 of the paper book submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y. 2009-2010. It is ordered accordingly. 4.5 In the result, ground 2 is allowed. Allowability of education cess paid as a tax deductible expenditure (Ground 3) 5. The above ground relates to the claim of deduction of education cess including secondary and higher educational cess as deduction while computing the total income. 5.1 We have heard rival submissions and perused the material on record. The Kolkata Bench of the Tribunal in the case of Kanoria Chemicals Industries Ltd Vs. Addl. CIT (ITA No.2184/Kol/2018 dated 26.10.2021) had held that the education cess is an additional surcharge levied on income tax and hence it partakes the character of income tax. Accordingly it held that the education cess is not allowable as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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