3. The brief facts of the case are that the assessee is an individual having business where income from manufacturing of inverter drives and control panel and trading of switchgear items. The return of income for AY 2009-10 was filed on 03.02.2010 disclosing total income of Rs.39,88,290/-. The case has been processed u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) and thereafter selected for scrutiny. Accordingly, notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. In response to the said notices, the Ld. AR of the assessee appeared on different dates and explained the return with regard to details filed and books of account produced. The assessment was completed u/s. 143(3) of the Act with the assessed income being at Rs.96,21,224/-.
No TDS on mere reimbursement of expenses without Income element
Case Law Details
- TaxGuru Citation
- 2017 taxguru.in 215
- Case Name
- Assistant Commissioner of Income-tax Vs. Devendra Kumar Dugar ( ITAT Kolkta)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2009-10
- Courts
- All ITAT, ITAT Kolkata
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There existed a royalty-cum-reimbursement agreement between the assessee and CECO and as per the said agreement certain service charges for contract job work were to be reimbursed by the assessee to CECO e.g. (i) royalty for use of the name of CECO, (ii) reimburse of direct expenses made exclusively by CECO for the business of the assessee and (iii) payment for services and reimbursement will be based on practical aspect and requirement of funds. Therefore, this clause is clear about the fact that all direct expenses made by CECO have to be reimbursed by the assessee. At the same time, we observe from the order of the Ld. CIT(A) itself wherein there is a chart of statement of expenses where for all expenses paid TDS was deducted and i.e. evident from the chart. Therefore, there is no loss to the revenue in the entire transaction. Further in the judgment of the Delhi ITAT in case of Dr. Willmar Schwabe India (P) Ltd., supra it is crystal clear proposition of law that when there is no element of income and there is mere reimbursement made there is no question of deduction of TDS.
Relevant Extract of the ITAT Order
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