BYK ASIA PACIFIC PTE LIMITED,PUNE vs. ACIT(IT), CIRCLE-1, PUNE

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ITA 2110/PUN/2019Status: DisposedITAT Pune24 March 2021AY 2016-1716 pages
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What did the Tribunal hold?

The Tribunal held that for expenses to be considered reimbursement, there must be a direct correlation between the outgo and inflow of identical amounts without any mark-up. For IT expenses, the Tribunal found insufficient evidence to prove it was a pure reimbursement and remanded the issue for further examination.

What were the facts?

The assessee, an Indian branch of a Singapore-based company, incurred expenses which were reimbursed by its Singapore HO with a 10% mark-up. The Assessing Officer disallowed these expenses for non-deduction of TDS under Section 195. The assessee contended these were reimbursements, not fees for services.

What were the issues?

Whether payments made by the Indian branch to its Singapore head office for certain expenses constituted reimbursement or fees for services, and consequently, whether TDS was required to be deducted.

Which sections of the Income-tax Act were involved?

Section 40(a)(i),Section 195

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Income Tax Appellate Tribunal, PUNE BENCH “C”, PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Ketan Ved
For Respondent: Shri Mahadevan A.M.Krishnan

आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The Respondent; 2. 3. The CIT(A)-13, Pune 4. The Pr.CIT-V, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “सी” / 5. DR ‘C’, ITAT, Pune; 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 22-03-2021 Sr.PS 2. Draft placed before author 24-03-2021 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

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