FCS COMPUTER SYSTEMS S PTE LTD,INDIA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE INT TAX 1(3)(1), INDIA

ITA 1034/DEL/2025Status: DisposedITAT Delhi09 January 2026AY 2022-23Bench: SHRI M. BALAGANESH (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the expenses incurred by the head office for the procurement of software and services were allowable as a deduction for the Indian branch office (PE). This was based on the principle that such expenses were mandatory for the branch's business of distributing software and had been accepted by the revenue in past years.

What were the facts?

The assessee, a Singapore-based company with a branch office in India, incurred expenses of Rs. 1,69,10,832/- for procurement of software and related services from its head office. The Assessing Officer disallowed these expenses, treating them as not deductible.

What were the issues?

Whether expenses incurred by the head office for software procurement and services are deductible for the Indian branch office (PE) under the Income Tax Act and the India-Singapore DTAA. Whether the AO erred in disregarding the DRP directions and past treatment by the revenue.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C,Section 37(1)

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Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

  • Motorola Inc. v. Dy. CIT
    95 ITD 269 · 2005 · ITAT
    213 citing
  • 176 Taxmann.com 783
    176 Taxmann.com 783 · 2025 · SC
    6 citing

Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI

For Appellant: Shri Ashwani Taneja, Adv, Shri Divyansh Dubery, Adv, Shri Shivam Kukreja, Adv, Ms. Ria Toyal, Adv
For Respondent: Ms. Ekta Jain, CIT DR
Hearing: 04/12/2025Pronounced: 09/01/2026

PER M. BALAGANESH, A. M.:

1.

The appeal in ITA No. 1034/Del/2025 for AY 2012-13, arise out of the order of the Commissioner of Income Tax (Appeals)-42, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 24/15- 16/CIT(A)-42 A.Y. 2012-13 dated 24.10.2016 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 26.05.2015 by the Assessing Officer, ACIT, Circle-1(3)(1), International Taxation, New Delhi (hereinafter referred to as ‘ld. AO’).

2.

The assessee has raised the following grounds of appeal before us:- FCS Computer Systems S PTE Ltd

“1. That having regard

The order continues below.

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