CASE LAWS DETAILS
DECIDED BY: ITAT, MUMBAI BENCH `L’, MUMBAI
IN THE CASE OF: DDIT (IT) Vs. Tekmark Global Solutions LLC., APPEAL NO: ITA No. 671/Mum/2007, DECIDED ON February 23, 2010
8. From the facts on record it is clear that what the American company has provided is selecting and offering personnel to work under the control and supervision of the assessee in India. It is not a part of any technical services to be rendered by the assessee to the Indian Company. The deputed persons are for all practical purposes employees
of the Indian Company. They carry out work allotted to them by The Indian Company. Assessee has no control over the activities or the work to be performed by the deputed persons. Indian Company has a right to remove the deputed persons from the services. What the assessee recovered was the actual salary payable to the deputed persons. These would clearly show that the deputation cannot be treated as part of any technical services to be rendered by the assessee to the Indian Company. When the services rendered are independent of and not under the control of the assessee, the deputed persons cannot be considered as constituting a permanent establishment of the assessee in India. Hence
there is no permanent establishment of the assessee in India. The actual salary of the deputed personnel reimbursed by the Indian company is only reimbursement of salary payable by the Indian Company advanced by the assessee to the employees.
9. Even assuming that there is a permanent establishment in India, there is no profit accruing from the activities in India as the Assessee is paid only the actual salary paid by them in advance to the deputed personnel. In the following decisions it has been held that there is no income in reimbursement of expenses.
CIT Vs Industrial Engineering Projects(P) Ltd 202 ITR 1014 Del
CIT Vs Siemens 310 ITR 320 f3om
10. In the circumstances, we hold that no income has arisen to the assesses in India in the course of deputing personnel to an Indian Company who work under the control and supervision of the Indian company and carry out the work allotted to them by the Indian Company and the assessee company is reimbursed the salary of the deputed employees paid by the assessee.
11. In the result the appeal preferred by the revenue is dismissed.