2017 (7) TMI 1248 - HC - Income Tax

We Admit the present appeal on following substantial question of law; A. Whether on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal was justified in deleting the disallowance of expenditure of ₹ 12,73,34,892/claimed by the assessee as reimbursement of cost of salary and other expenses to its holding company due to nondeduction of TDS under section 40(a)(ia) read with the provisions of the Double Taxation Avoidance Agreement with Singapore?

Summary

Issues:
1. Admission of appeal on substantial question of law regarding disallowance of expenditure claimed as reimbursement of cost of salary and other expenses due to non-deduction of TDS.
2. Consideration of earlier appeals and rejection of certain questions framed by the Department.

Analysis:
1. The High Court admitted the appeal concerning the substantial question of law related to the disallowance of expenditure amounting to ?12,73,34,892 claimed by the assessee as reimbursement of costs to its holding company due to non-deduction of TDS under section 40(a)(ia) and the Double Taxation Avoidance Agreement with Singapore. The Court acknowledged the similarity of facts to a previous case and decided to admit the present appeal for further consideration during the hearing.

2. The Court noted that question Nos. (B) and (C) framed by the Department were not considered as substantial questions of law since they had been rejected in earlier appeals. Therefore, these questions were not deemed necessary for further examination. The Court directed that the present appeal be heard in conjunction with another Income Tax Appeal to facilitate a comprehensive review of the case.

This judgment reflects the Court's meticulous consideration of the legal issues involved, particularly focusing on the substantial question of law related to the disallowance of expenditure and the implications of non-deduction of TDS. The Court's decision to admit the appeal for detailed examination demonstrates a commitment to thorough legal analysis and ensuring justice in matters concerning tax implications and financial reimbursements.