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Issues:
Assessee's appeals against CIT(A) order under section 195 of DCIT, (TDS), Circle 1(1), Mumbai - Whether expenses incurred by assessee on foreign technical personnel are liable for tax deduction at source (TDS) - Whether section 195 is applicable to expenses directly incurred by assessee - Whether foreign parties derive benefit from expenses - Whether foreign parties' income is taxable in India - Whether judgments cited by CIT(A) are applicable. Analysis: 1. Common Issue in All Appeals: The thirty appeals by the assessee challenged a common order of the CIT(A) regarding the tax deduction at source (TDS) under section 195 of the Income Tax Act. The appeals were consolidated due to the common issue involved. 2. Grounds of Appeal: The grounds of appeal raised by the assessee focused on the alleged violation of natural justice, the authority of the Assessing Officer to pass orders under section 195, and the tax deductibility on expenses paid to foreign parties for technical services. 3. Facts of the Case: The assessee entered agreements with foreign companies for technical services, leading to a dispute over tax deduction on expenses like airfare, lodging, and local transportation. The Assessing Officer held that these expenses were part of the total consideration and thus subject to TDS. 4. Arguments by Assessee: The assessee contended that section 195 did not apply to expenses directly incurred by them, as no benefit was derived by the foreign parties. They cited legal provisions and judgments to support their stance. 5. Revenue's Position: The Revenue supported the CIT(A)'s order upholding the TDS on the disputed expenses. 6. Tribunal's Decision: The Tribunal found that the expenses incurred by the assessee were integral to the services provided, rejecting the argument that they could be separated from the fees paid. However, it noted the lack of evidence regarding direct incurring of expenses by the assessee. 7. Judicial Precedents: The Tribunal referred to relevant judgments, including those concerning the direct incurrence of expenses by the assessee and the lack of benefit to the foreign parties, to support its decision. 8. Order of the Tribunal: The Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer to verify the direct incurrence of expenses by the assessee. It directed a fresh examination of the issue in light of the relevant legal precedents cited. In conclusion, the Tribunal allowed the appeals for statistical purposes, emphasizing the need for a thorough examination of the direct incurrence of expenses by the assessee before determining the applicability of tax deduction at source under section 195.
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