Case Law Details
Facts
A T Kearney Ltd., UK (assessee), a company engaged in the business of providing management consulting services, carried on its business operations in India through its branch office . The assessee deputed highly experienced personnel to train and develop the local expertise to provide services to Indian clients in line with its global standards. The expatriate employees continued to draw their salaries from the overseas office.
In computing the total income of the branch office (being treated as a permanent establishment of the assessee), the assessee claimed deduction for the salary paid to the expatriates by the overseas office.
The Assessing Officer (AO) disallowed the deduction for salaries paid to the expatriates in computing the total income of the Indian branch office.
The Commissioner of Income Tax (Appeals) deleted the disallowance of the salary of the expatriates. The Revenue filed an appeal before the Income Tax Appellate Tribunal (ITAT) whereas the assessee filed cross objection.
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