Salary Reimbursement Not Taxable as FTS as Seconded Employees Worked Under Indian Employer’s Control

Honda R&D Company Limited Vs ACIT (ITAT Delhi) The Income Tax Appellate Tribunal (ITAT), Delhi, allowed the appeals of a Japanese company and held that reimbursement of salary costs of seconded employees received from its Indian group company could not be treated as Fees for Technical Services (FTS). The dispute arose when the Assessing Officer treated ₹21.52 crore received by the assessee from Honda R&D (India) Pvt. Ltd. towards reimbursement of salary costs of seconded employees as FTS and made an addition accordingly. The Dispute Resolution Panel upheld the assessment, leading to ...