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TMI Blog2005 (11) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount of reimbursement of actual expenses incurred by the assessee after verification. The facts involved in the assessment year under consideration indubitably being pari materia with those present in assessment years 1996-97 and 1997-98, the aforesaid Tribunal decisions for these years is squarely applicable for this year also. Therefore, respectfully following the said Tribunal order, in the assessee s own case, for this year also, it is held that reimbursement of expenses cannot be considered as the income of the assessee. The Assessing Officer is directed to delete the amount of reimbursement of actual expenses incurred by the assessee, after verification. As a result, the appeal is partly allowed, as indicated. - PRADEEP PARIKH AND A.D. JAIN, JJ. S.G. Joshi for the Appellant. Ajay Vohra for the Respondent. ORDER A.D. Jain, Judicial Member. - This is assessee s appeal for assessment year 1998-99, raising the following grounds : "1. The order passed by the CIT(A) is bad in law, totally contrary to facts, perverse and without application of mind and, therefore, deserves to be set aside to the extent it fails to deal with the main and only surviving ground of appeal. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence submitted in remand proceedings, in the form of vouchers, books of account, agreements etc., for verification, and in holding that the grounds dealing with disallowance made in protective assessment need not be adjudicated upon. 10. The order of the CIT(A) is predetermined and without taking into consideration basic facts, submissions and judicial pronouncements on the subject and, therefore, bad in law and on facts. 11. The CIT(A) misdirected himself in considering totally irrelevant material like non-withdrawal of appeals for earlier years, without appreciating the fact that, in earlier years, the grounds dealing with disallowances made in protective assessment remain to be adjudicated. 12. The CIT(A) totally misdirected himself in holding that the communication from the Board conveying the fact of agreement having been reached by a due process of law under section 90 was equivalent with the circular/instruction under section 119. Therefore, the CIT(A) has wrongly proceeded to hold that this decision could not be taken cognizance of in judicial proceedings. 13. Without prejudice to the above, the CIT(A) has erred in law in not accepting the appellant s contention that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These grounds are, therefore, rejected as withdrawn. 3. Apropos ground No. 13, the facts are that the assessee-company derives income from advisory services. It is a Corporation organized and existing under the Laws of the State of Delaware, USA. It has a branch office in India. During assessment year 1998-99, the assessee entered into a service agreement with Britco Foods Co. Ltd., with effect from 1-4-1995, to provide advisory services to Britco. Britco is a company organized and existing under the Laws of India, having its registered office in Maharashtra. It is an indirect wholly owned subsidiary of the Coca-Cola Company of USA (TCCC) and has acquired from TCCC the authorization to manufacture and sell in India concentrates, beverages, bases and syrups for the products. Britco further acts in India to promote and enhance the business of the said company in the production and sale of products. The assessee-company has expertise and know-how in the field of manufacture, sale and marketing of beverages, syrups, food stuffs in general and the products in particular and in providing services in connection therewith. During the year, the assessee received service fees amounting to Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the two; that the deduction is subjected to the provisions of the Act by the said article 7(3); that there is no restriction on the type of expenses; that the Act as such does not lay down any classification or category, but does provide for deduction and limitation in respect of certain types of expenses; that since article 7(3) deals with deduction of expenses irrespective of category thereof, it cannot be said that it provides for disallowance only in respect of certain expenses and not regarding all; that the Protocol does not lay down that the restriction contained in article 7(3) is confined only to the executive and general administrative expenses; and that based on article 7 read with article 12 of the DTAA between India and USA and section 115A of the I.T. Act, royalties or fees for technical services/fees have included services, was being charged to tax at 30 per cent of the total receipt of Rs. 63,68,36,936, amounting to Rs. 19,10,51,080. 5. The learned CIT(A), vide the impugned order dated 5-2-2002, upheld the action of the Assessing Officer. 6. The learned counsel for the assessee has placed on record before us copies of order dated 16-3-2005, in the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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