9911796707
TMI Blog2015 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ntions have been heard and record perused. Facts in brief are that assessee company is incorporated in UK and is engaged in Metallurgical industry. The assessee has received a sum of Rs. 8,56,41,282/- in A.Y.2008-09 and offered the same to tax @15% as royalty under India-UK DTAA. However the assessee has also claimed to have received reimbursement of expenses of Rs. 28,78,222/- which were not offered to tax. In note with return of income the assessee stated that "Assessee has incurred certain expenses on behalf of the associated enterprises. Reimbursement involves recovery of actual cost incurred by the assessee on their behalf." However the AO did not found the contention of the assessee acceptable. The AO observed that AAR in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services and such chargeable to tax @15% as per Article 13 of India-UK Double Taxation Avoidance Agreement. 4. By the impugned order, the CIT(A) confirmed the action of the AO, against which assessee is in further appeal before us. 5. It was contended by ld. AR that reimbursement of actual expenses received by assessee parent company from subsidiary Indian company namely, M/s Foseco India Limited involves no profit element whatsoever and thus there is no income chargeable in hands of assessee-parent as held in CIT v. SIEMENS 310 ITR 320 (BOM)-page 2, 8 of Judicial precedent Paper book [JPPB]; DIT v. KRUPP 38 DTR 251 (BOM)-page 21 of JPPB; CIT v. INFORMATION ARCHITECTS 322 ITR 1 (BOM)-page 25 of PPB; MAHINDRA AND MAHINDRA v. DCIT 313 ITR 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envisaged by the AO. The AR also filed copies of invoices of these payment. 8. He further contended that the lotus note is facility given by the appellant to group companies with a view to smoothen the day to day work and thereby increase the overall efficiency level. Lotus notes is powerful multi faceted application software that helps to complete the work effectively. It offers power of messaging and it exchanges to brings to a person all information whether from notes or from internet. It offers very useful details like e-mails, calendar, address book etc. All Foseco group are interconnected to Lotus Notes and establishment of connectivity, administration and servicing software for the benefit of all facilitated by Foseco group. The co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and supporting bills/vouchers of such expenses. The CIT(A) has confirmed the disallowance after having following observations :- "1.3. I have considered the facts and perused the material on record. It is seen that Lotus note is powerful multifaceted application software that helps to complete the work. It exchanges the information and bring all information to a person though internet. It establishes the connectivity therefore payment received in consideration of use of lotus note is technical nature. It is also noticed that no copy of agreement for providing lotus note services between appellant and its Indian company has been filed before the AO nor before the under signed. Therefore consideration of Rs. 24,35,020/- received for use of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es charged by the appellant. The case law on. TO v Alstom( supra) relied by the AR has no application as in that case the holding company was making payment' as per specific agreement entered in to between holding company and supplier of software of lotus note software for which it has received the apportioned expenses. In the instant case, the appellant has not filed any such agreement before the AO nor before the under signed. Further the lotus note belongs to the appellant hence against which the appellant has received payments. Further some expenses were received from providing managerial training services to Indian company therefore the fact of the appellant case are distinguishable from the case laws relied by the appellant." 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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