Case Law Details
Alfa Laval Corporate AB Vs ACIT (International Taxation) (ITAT Pune)
it is seen that the assessee has canvassed a case that the amount in question was part of the salary of certain expatriates, who were on payroll of the Indian entities and that this amount was recovered from Indian companies without any mark-up. The assessee also contended that this amount was offered to tax in India by such employees.
Explanation 2 to section 9(1)(vii) provides that FTS includes any consideration for rendering managerial consultancy services etc., but does not include consideration `which would become income of the recipient chargeable under the head “Salaries”’. A perusal of the mandate of the above provision clearly ingrains that any amount paid as a consideration which is income of the recipient chargeable to tax under the head “Salaries”, cannot constitute FTS. Though the assessee has been arguing before the authorities below that the said amount of Rs.64.19 lakh was offered by the employees for taxation in India as their salary, but did not furnish any conclusive evidence to prove the same. It can be seen from the impugned order that the assessee filed certain details of the salaries paid by the employees but did not establish any correlation between the amount under consideration and the amount offered for taxation as `Salary’ by such employees. Under these circumstances, we are of the considered opinion that it would be in the fitness of the things if the impugned order on this score is set-aside and the matter is remitted to the file of the AO. We order accordingly and direct him to decide this issue afresh as per law after allowing reasonable opportunity of hearing to the assessee.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee is directed against the final assessment order dated 16-03-2021 passed by the Assessing Officer (AO) u/s.143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) in relation to the assessment year 2016-17.
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