Case Law Details
BYK Asia Pacific Pte. Limited Vs ACIT (ITAT Pune)
On going through the documents/material as discussed above, it is evident that Seminar expenses, Training expenses, Printing expenses and Staff welfare expenses are amounts paid by the Indian BO to the Singapore HO, which satisfy the twin conditions of `reimbursement’ as discussed supra, viz., one-to-one direct correlation between the outgo and inflow of the Singapore HO; and the inflow of the identical amount without any profit element. Since the Singapore HO recovered the same amount from the Indian BO as was incurred by it to third parties without any profit element, the receipt cannot be construed as “other sum chargeable under the provisions of this Act” so as to warrant deduction of tax at source /s.195 of the Act by the Indian BO. Once it is held that TDS was not necessary, there can be no question of disallowance u/s.40(a)(i) of the Act. We order accordingly.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee is directed against the final assessment order dated 23-10-2019 passed by the Assessing Officer (AO) u/s.143(3) r.w.s.144C(13) of the Income-tax Act, 1961 (hereinafter called ‘the Act’) in relation to the assessment year 2016-17.
2. The only issue raised in this appeal is against the disallowance of Rs.1,22,43,873/- u/s. 40(a)(i) on account of non-deduction of tax at source u/s 195 of the Act.
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