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Section 195 – No TDS on reimbursement of expenses for supply of data
Case Law Details
- Case Name
- DCIT Vs Ernst & Young Pvt. Ltd (ITAT Kolkata)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All ITAT, ITAT Kolkata
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Briefly stated facts are that the assessee claimed deduction for Rs.6,88,12,554/- and Rs.23,78,781/- being amount payable to EYGS LLP and Ernst & Young LLP, UK respectively towards reimbursement of costs for providing access to system & management audit methodology updates, knowledge updates through web etc. assistance in development of common programs and policies, endeavoring to ensure that professional and to other people resources are available to assist the firm or its clients in all jurisdiction. But the AO disallowed both these amounts claimed by way of reimbursement of cost for...
I beg to differ. The amount whether the same be reimbursement of expenses or otherwise is an expense in the nature of payment towards technical services and squarely covered under Section 194J rather than 195. If it is contended that the payment is in the nature of reimbursement of expenses, the courts are opening flood gates for tax evasion. All expenses of this nature contain a great element of reimbursement of expenses. For that matter a C A can also say that 95%of the bill is towards reimbursement of his expenses on conduct of audit and the balance is only his fee. I am sorry to disagree with the judgement though with utmost respect to the wisdom their Lordships.