Reimbursement of seconded employees’ salaries to seconding company not subject to TDS

Brief of the case:

1. The ITAT Mumbai in the above cited case held that reimbursement of secondment expensed by assessee to the company seconding its employees to assessee is not subject to TDS as the employer-employee relationship for all legal purposes subsist between seconding company and seconded employees for which seconding company is liable to deduct TDS on payments made by it to seconded employees.

2. Therefore, assessee company not liable to deduct TDS on reimbursement of seconded employees’ salaries made to seconding company.

Facts of the case:

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