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TMI Blog2014 (1) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is in appeal before us against the order of ld. CIT (A) dated 31.12.2010 passed for A.Y. 2007-08. 2. The solitary grievance of the assessee is that it has made a provision of Rs.261540/- which is to be paid to SPX Corporation (Parent Co. in USA), towards its share of expenses for ISO audit, it failed to deduct the TDS on such payment, therefore, the AO has disallowed the claim of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat amount is payable to a third party for the services rendered by that party. The element of income is embedded in the alleged provision because, for carrying out the audit service, if third party would receive any amount then that amount would be taxable in India. 4. Alternatively, assessee has contended that a sum of Rs.1,05,989/- was written back as an income being excess provision and it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have duly considered the rival contention and gone through the case law relied upon by the assessee. In the case of Modicon Network Pvt. Ltd. there was a joint venture and arrangement of incurring expenses was made. The assessee has reimbursed part of the expenses thus it was conclude by the Tribunal that reimbursement without any element of profit or income embedded therein, no deduction of TDS w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to non-resident. It nowhere provides that such an obligation can be absolved by showing reasonable cause for not deducting the TDS while making payment or crediting the account. Thus the contentions of the assessee that under bona fide belief, it has reimbursed the expenses are irrelevant. The element of income is embedded in the receipt of the auditor. If the receipts are routed through the pare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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