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TMI Blog2022 (6) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... bai (the learned Assessing Officer) and ITA No.3674/Mum/2019 filed by the assessee. 03. In ITA No. 3674/Mum/2019, assessee has raised following grounds of appeal:- "Aggrieved by the order passed by the Commissioner of Income Tax (Appeals)-2 [CIT(A)] dated 29 March 2019, under section 250 of the Act. GSIFPL (the Appellant) respectfully submits that the learned CIT(A) has: 1. Erred in disallowing an amount of Rs 1,700,000 under section 40(a)(1) of the Act, being amounts paid to non-resident group entities which are in the nature of reimbursement of certain expenses. 2. Erred in not appreciating that, out of Rs 1,700,000 taxes have already been withheld on an amount of Rs. 925,546 and hence, cannot be disallowed under section 40(a)(i) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany. For AY 2015-16, assessee filed its return of income on 24th November, 2015 at a total income of Rs.24,20,74,290/-. The return of income of the assessee was picked up for limited scrutiny. During the course of assessment proceedings, the learned Assessing Officer examined the issue of payment of Rs.17,24,877/- paid to M/s Goldman Sachs (India) Capital Markets Pvt. Ltd. (in short GSICMPL). This expenditure was stated to be recharge of employee cost, technology cost and other administrative charges. Assessee stated that this expenditure was incurred on behalf of group entities including the assessee by the parent company and same is reimbursed by the assessee. The assessee also stated that as it is merely reimbursement of expenses and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer noted that assessee has also incurred certain employee related expenses to its various related parties. As per the detailed contained in note no. 3.26 of financial statements assessee noted that out of total amount assessee has deducted tax at source on amount of Rs.5,53,82,350/- paid to GSISPL but on the balance sum of Rs.2,74,17,650/- no tax is deducted at source. Assessee once again stated that this expenditure are in the nature of reimbursement of expenses paid by group entities on behalf of the assessee comprising of employee related cost and corporate recharges such as telecommunication and administrative expenses. As there is no element of income in the reimbursement of expenses, taxes were not required to be withheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.3.23 lacs, he categorically noted that a sum of Rs.3.06 crores is merely in the nature of reimbursement without any element of profit and therefore, no tax is required to be withheld. He further held that as the appellant is already making TDS on the sum under Section 192 of the Act, if tax is deducted on this sum, it would be result into double deduction of tax at source. Therefore, he deleted the disallowance of Rs.3,06,00,000/- under Section 40a(ia) of the Act. 08. With respect to the balance sum of Rs.17 lacs, assessee submitted before him that it has already deducted tax in respect of payment of Rs.9,25,546/- but same could not be brought to the notice of the learned Assessing Officer. 09. Further, with respect to Rs.8,71,077/-, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpiry of the vesting shares of Goldman Sachs group would be given to these employees for which assessee would be required to make a payment to GSGI. Therefore, the amount of stock paid by assessee to GSGI is merely reimbursement and does not include any profit element. Further, on debiting the cost of acquisition in the books of the assessee, assessee would be liable to deduct tax under Section 192 of the Act. He also verified various from no. 16 issued by assessee to the employees. On this fact, the learned CIT (A) held that tax is required to be deducted on reimbursement of such stock price to the GSGI as it is mere reimbursement of expenditure. No infirmities were pointed out in the order of the learned CIT (A). It was also not shown tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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