Case Law Details
Case Name : Lionbridge Technologies Private Limited Vs ITO (International Taxation) (TDS) (ITAT Mumbai)
Appeal Number : ITA No.7121/Mum/2012
Date of Judgement/Order : 2007-08, 5/08/2015
Related Assessment Year :
Courts :
All ITAT ITAT Mumbai
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CA.V.Vivek Rajan
Brief of the Case
ITAT Mumbai has held in the case of Lionbridge Technologies Private Limited vs ITO (International Taxation) (TDS) that There is no liability to deduct tax at source on reimbursement of cost. Consequently for not deducting tax at source, the assessee cannot be treated as assessee in default under sections 201/ 201(1A).
Brief Facts of the Case
i. Lionbridge Technologies Inc, USA, had entered into an agreement with Microsoft Inc, USA and Skillsoft (which are referred as Vendors) for the purchase of Standard off the Shelves Software to be used by Lionbridge entities across the globe.
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I fully agree with Mr.C.A.M. Lakshmanan. It is undue hardship to the tax payer . When these kind of wrong practices and wrong demand by department will stop ? Especially in the case of service tax. They want items which are not falling within the purview of service are also to be taxed since now all the services are taxable.
When it is clear that the amount paid is only towards reimbursement, where is the question of TDS? One has to approach ITAT/High Court to prove that the amount paid is for reimbursement is not an “INCOME”. Till recently tax was deducted at source on the service tax component also. Similarly the act was amended in the recent budget to collect service tax on the expenses reimbursed treating the reimbursement of expenses as amount paid for services rendered. Here also one has to file a writ and prove that reimbursement is not service.