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TMI Blog2015 (6) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... m assessee which amounts to double taxation and no disallowance can be made in the hands of the assessee u/s.40(a)(ia) - Decided in favour of assessee for statistical purposes. Disallowance of depreciation - Held that:- Payment has been made by assessee to the custom authority while importing the assets. The payment for purchase of computers so made has been accepted by TPO. We, therefore, do not find any merit in the action of the lower authorities for declining the claim of depreciation on the assets so imported. - Decided against assessee. Advertisement and public relation expenses disallowed under Section 37(1) - Held that:- Assessee has paid a sum of ₹ 20,05,985/- to UPSWWF for advertisement services rendered by Ogilvy. Vide submission dated 25-11-2011 and 7-12-2011, the assessee has submitted all the relevant copies of invoices, articles, media release published in leading newspapers and news channels, demonstrating the advertising services rendered by Ogilvy during the year and the same was for the purpose of assessee’s business. After recording detailed finding at para 6.3, as reproduced above, the CIT(A) has deleted the disallowance. The finding of the CIT(A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was disallowed by the AO u/s.40(a)(i). The CIT(A) also confirmed the disallowance of depreciation of ₹ 22,22,745/- u/s.32 on the assets imported from UPSWWF. 4. Against the above order of CIT(A), both assessee and revenue are in appeals before us. 5. The assessee in its appeal (i.e. ITA No.3447/M/2013) has taken following grounds :- Ground No.1-Reimbursements of ₹ 34,45,995/- at cost to UPS Worldwide Forwarding, Inc.( UPSWWF‟), USA, towards debtors collection services from Receivable Management Services, USA ( RMS‟) disallowed under Section 40(a)(i) of the Act. Ground No.2-Reimbursements of ₹ 36,69,834/- at cost to UPSWWF, USA, towards legal services from Titus disallowed under Section 40(a)(i) of the Act. Ground No.3-Disallwoance of depreciation of ₹ 22,22,745/- under Section 32 of the Act on the assets imported from UPSWWF. 6. The revenue in its appeal (i.e. ITA No.3311/M/2013), has taken solitary ground, which reads as under :- 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance of advertisement expenses of ₹ 20,05,985/- on the basis that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellschaft [2009] 310 ITR 320 (Bom) ii.DIT (IT) v. WNS Global Services (UK) Ltd. [2013] 214 Taxman 317 (Bom) iii.CIT v. Angel Capital Debt Market Ltd. ITA (L) No. 475 of2011 (Bom) iv.Nathpa Jhakri Joint Venture Vs. ACIT [2010] 131 ITJ 702 (Mum) v. DCIT v. Lazard India Pvt. Ltd. [2010] 4 I SOT 72 (Mum) vi.ACIT v. Modicon Network (P) Ltd. [2007] 14 SOT 204 (Del) 10. As per ld. AR, the payment so made is not taxable in India under Article 12 of India-USA Treaty, insofar as services provided should also make available technical knowledge, skill, experience, know-how or process. 11. Ld. DR contended that had the assessee felt that payment was not chargeable to tax then he would have recourse to section 195(2)/195(3) and 197. He further relied on the orders of the lower authorities for the disallowance so made. 12. We have considered rival contentions and gone through the orders of the lower authorities. From the record, we found that invoices issued by UPSWWF on assessee are matched back to back with the invoices raised by the RMS. It was a clear case of reimbursement without any profit element. We also found that there was mere provision of services which is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us has paid tax on the impugned payments by incorporating the same in their respective income. If the AO finds that the Titus has already paid tax by including such payments in its income, no further tax can be collected from assessee which amounts to double taxation and no disallowance can be made in the hands of the assessee u/s.40(a)(ia). We direct accordingly. 17. With regard to disallowance of depreciation on assets imported by assessee in the form of computers, scanners, printers from UPSWWF of ₹ 42,98,029/-, the AO disallowed assessee s claim of depreciation by observing that assessee has not furnished any evidence in the form of customs clearance certificate, bill of entry etc. As per AO it is not verifiable as to whether the goods have been actually imported by assessee and payment has been made to UPSWWF. By the impugned order, the CIT(A) confirmed the action of the AO, against which assessee is in further appeal before us. 18. Ld. AR drew our attention to the statement of facts evidencing furnishing of documents discussed by the AO. We found that payment has been made by assessee to the custom authority while importing the assets. The payment for purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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