Case Law Details
Global E-Business Operations Vs DDCIT (ITAT Bangalore)
Explore the ITAT Bangalore judgment on global e-business operations vs. DDCIT. Learn about tax implications and obligations for reimbursement payments.
When a claim was made by the assessee that there was no income of element embedded in the remittances, the AO has not examined the claim of the assessee in a proper perspective. They have merely said only few evidence have been filed. Another reason given was that no independent audit was carried out in respect of the remittances. We are of the view that the evidence filed by the assessee before the revenue authorities and which have been filed in the form of paper book filed before us amply demonstrates the plea of the assessee that the remittances were purely reimbursement of expenses with no element of income embedded in such payments. The question in such circumstances, will be as to whether the obligation to deduct tax at source can be said to exists on such payments. The law in this regard is very clear. The Special Bench of ITAT, Mumbai in the case of Mahindra & Mahindra Ltd., 30 SOT 374 examines this issue and have held that in respect of reimbursement of expenses there is no obligation to deduct tax at source and there was no element of income involved in such payments.
FULL TEXT OF THE ITAT JUDGEMENT
These are appeals by the assessee against the common order passed by the CIT(A)-IV, Bangalore u/s 201(1)( and 201(1A) of the IT Act, 1961 (‘The Act’) relating to assessment year 2007-08.
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