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Case Law Details

Case Name : DCIT Vs Michlin Global Mobility (ITAT Delhi)
Appeal Number : ITA No.1962 &1963/Del/2020
Date of Judgement/Order : 15/12/2022
Related Assessment Year : 2015-16 & 2016-17
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DCIT Vs Michlin Global Mobility (ITAT Delhi)

ITAT Delhi held that the social security, insurance, relocation expenses which are in the nature of committed and obligated payments are in the nature of reimbursements and not fee for technical services.

Facts-

During the course of the scrutiny assessment proceedings the assessee was asked to explain why the amount received from the group entity in India was not taxable in India.

The assessee explained with respect to the activities in India the assessee made available expatriates to Miscelin Group Entities in India i.e. AIMPL and MITC. This group entities in India required experienced employees familiar with the Michelin Group methodology and processes to be employed on their local payrolls in India. The personnel assigned to these group entities were released/ discharged in their home country from all the obligations and rights of employment and were subsequently, employed by the respective Indian entity for the services rendered in India. Since, the expatriates were employed by the Indian entities their remuneration cost was fully borne by the respective Indian entities and applicable taxes thereon has been with held as per the provisions of the Act. It was explained that cost to cost reimbursements from Indian entities towards social security, contributors, relocation expenses etc with respect to the expatriate personnel who are the employees of such Indian entities is not in the nature of income of the assessee.

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