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TMI Blog2015 (2) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... earned by Respondentassessee which is subject to tax but is only a reimbursement of communication expenses paid to non-residents, no dis-allowance warranted. See DIT(IT)-1 V. WNS Global Services (UK) Ltd [2013 (10) TMI 215 - BOMBAY HIGH COURT]. - Decided in favour of assessee. For expenditure on managing sales affairs outside India the assessee paid certain amounts to overseas agents for procurement of export orders. The agents have not provided any managerial/technical services. The payments received by the nonresident Indian are not taxable in India, thus Sec.195 have no application to assessee’s case. See ACIT V. Farida Shoes (P) Ltd [2013 (11) TMI 907 - ITAT CHENNAI] - Decided in favour of assessee. - I .T.A.No.1242, 1243 & 1244/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment years 2007-08 2008-09 respectively and ₹ 1,00,93,603/-, ₹ 1,34,38,888/- ₹ 1,51,72,183/- towards expenditure on managing sales affairs outside India for the assessment years 2007-08, 2008-09 2009-10 respectively. 3. The brief facts of the case are that the assessee is a private limited company, engaged in the business of manufacturing and trading in flavor essence, aromatic components, aromatic chemicals and food coloring agents. The assessee filed its return of income for the assessment years 2007-08, 2008-09 2009-10 on 31.10.2007, 30.09.2008 30.09.2009 declaring its income as ₹ 68.81 lakhs, ₹ 57.80 lakhs and ₹ 70.99 lakhs respectively. The case was selected for scrutiny and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the jurisdictional ITAT in the case of Sundaram Asset Management company ltd and IOB in ITA No.1774/Mds./2012 dated 19.07.2013 ITA No.1815/Mds./2011 dated 02.04.2013 respectively. 4.2. Before us, the Ld. A.R. submitted the decision of the case Sundaram Asset Management vs. DCIT reported in 37 Taxmann.com 278 wherein the Chennai Bench of the Tribunal held as follows:- The fifth ground of appeal of the assessee relates to the issue of depreciation on UPS. The assessee has claimed depreciation on UPS @ 60% treating the same as part of computer. On the other hand, the Assessing Officer has considered the UPS at par with Plant Machinery and restricted the depreciation to 15%. It has been repeatedly held in various decisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments were made without complying with the provisions of section 195 of the Act. On the query raised by the Ld. Assessing Officer as why these payments cannot be considered as royalty payment the assessee had replied that the payment was made for the purpose of communication expenses to the leased lines to assess the data of the company which has been maintained by the holding company in a server located in USA. Therefore, the aforesaid payment cannot be considered as payment towards as royalty for the purpose of usage of scientific equipments. The Ld. Assessing Officer rejected the contention of the assessee for the following reasons:- (i) The above payment was made to the persons of the foreign country mainly for the purpose of utilizi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company outside India. The Ld. Assessing Officer came to a conclusion that the assessee had not complied with the provisions of section 195 of the Act and therefore invoked the provisions of section 40(a)(i) of the Act and disallowed the amount of ₹ 1,00,93,603/-, ₹ 1,34,38,888/- ₹ 1,51,72,183/- as deductable expenditure for the assessment years 2007-08, 2008-09 2009-10 respectively. 5.1. When the matter came up before the Ld. CIT (A) relying upon the decision of the Tribunal in the assessee s own case for the assessment year 2005-06 in ITA No.250/Mds./10 dated16.12.2010 and the decision of Hon ble Supreme Court in the case of GE India Technology center Pvt Ltd Vs. CIT reported in 327 ITR 456, deleted both the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the Respondent-assessee recovers the same from WNS India. The Tribunal has come to finding of fact that the reimbursement of lease line charges received by the Respondentassessee is the actual amount which is incurred by it on making payment to the international telecom operator. Thus, on the above finding of fact, the Tribunal concluded that there is no income earned by Respondentassessee which is subject to tax but is only a reimbursement of lease line charges paid by it to international telecom operator. Accordingly, as the decision of the Tribunal is based on finding of fact, we see no reason to entertain Questions (4) (5). b) On the issue of expenditure on managing sales affairs outside India:- Hon ble ITAT Chenna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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