TMI Blog2023 (11) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in manufacturing and sale of moving machineries - HELD THAT:- The undisputed position that emerges is that the assessee has reimbursed the salary cost of seconded employees on cost-to-cost basis without any profit element. The assessee has duly deducted tax at source from these payments u/s 192 which is evidenced by the copies of Form 16 as placed on record. The same would show that the stated employees have worked under the supervision and control of the assessee. Once tax has been deducted u/s 192, there would be no requirement of TDS u/s 195 again while reimbursing the same to the foreign entity on cost-to-cost basis. Decided in favour of assessee. Depreciation on computer software @60% - AO, treating the same as intangible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 195 of the IT Act. 3. The learned CIT(A) erred in deleting the disallowance made u/s. 40(a)(i) of the IT Act towards payment of secondment cost, without appreciating that the payment to the US and other entities were not in the nature of reimbursement, and the assessee is under obligation to deduct TDS on these payments u/ s. 195 of the IT Act. 4. The learned CIT(A) erred in deleting the disallowance made u/s. 40(a)(i) of the IT Act towards payment of secondment cost, without appreciating that the impugned payments were made for rendition of managerial services through provision of personal and therefore liable to deduct TDS on the payments as per section 195 r.w.s. 9(1)(vii) of the I.T. Act and the provisions of respective DTA Agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. Assessment Proceedings 3.1 The assessee being resident corporate assessee is stated to be engaged in manufacturing and sale of moving machineries. During reassessment proceedings, it transpired that the assessee made payment of Rs. 2809.09 Lacs towards secondment of employees at cost. However, no tax was deducted at source which led Ld. AO to make impugned disallowance u/s 40(a)(i) on the ground that the assessee procured the services of US entity and such employees continued to be the employees of that entity. The relevant agreement provide that such employees were to perform managerial and other services in India. The pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s CIT (327 ITR 456) and various other decisions. The assessee also drew attention to the decision of Bangalore Tribunal in assessee s own case ITA No.606/Bang/2010 dated 29-02-2012 rendered in the context of an order passed u/s Sec.201(1) of the Act on the same issue for this very year. The Tribunal observed that the assessee withheld taxes on total salary paid to ex-patriates and remitted such taxes as per Sec.192 of the Act which was evidenced by the copies of Form 16 issued by the assessee to these employees. Therefore, the assessee could not be treated as assessee-in-default u/s 201(1). The revenue s appeal against the same stood dismissed by Hon ble Karnataka High Court on account of low tax effect and accordingly, the issue attained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 On the issue of depreciation, the assessee submitted that software license was integral part of computer system and the same was in the nature of computer program stored on a device. The functioning of the computer and the software was interlinked and inseparable. Therefore, the software would be eligible for same rate of depreciation. Reliance was placed, inter-alia, on the decision of Hon ble High Court of Madras in the case of CIT vs. Computer Age Management Services Pvt. Ltd. (109 Taxmann.com 134) as well as various other decisions as enumerated in the impugned order. The Ld. CIT(A) concurred with assessee s submissions and directed Ld. AO to allow higher depreciation of 60%. Aggrieved, the revenue is in further appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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