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TMI Blog2017 (8) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... t appears to be plausible one. Even on reimbursement to the Holding Company of estimated cost of expenses, it could not have been subjected to tax as income as considered by this court of in M/s. C.U. Inspections (I) Pvt. Ltd. [2015 (8) TMI 1398 - BOMBAY HIGH COURT]. The Tribunal has given opportunity to the assessee as well as the Assessing Officer to verify the deduction of tax at source and if the Assessing Officer finds that tax has already been deducted at source in respect of expenditure which requires deduction of tax at source by the Holding Company, then no disallowance can be made with reference to such expenditure in hands of the assessee for reimbursement to the Holding Company. It is for the Assessing Officer to verify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding Company? 3 Mr.Mohanty, the learned counsel for the appellant, submits that the assessee claimed ₹ 1.34 Crore as allowable business expenditure. There is no evidence to show that this expenditure of payment of ₹ 1.34 Crores to the Holding Company was towards reimbursement of actual expenses. There is absolutely no evidence that the Holding Company actually incurred the said expenses on behalf of the assessee Company. The learned counsel further submits that the Commissioner of Income Tax (Appeals) had given a finding that the expenditure were allocated by the Holding Company on estimate basis and not on actual basis. Even the agreement between the assessee and the Holding Company was considered by the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf read the provisions of the agreement. The agreement specifically states that actual cost incurred only be reimbursed. 5 We have considered the submissions canvassed by the respective parties. The agreement dated 17th May 2007 between the assessee of the Holding Company, more particularly, Clauses 4.1 to 4.4 reads thus : 4.1 It has been agreed that ASKIM would estimate, record and capture all the costs incurred, and keep the complete accounts of actual costs incurred by it in creating, setting up, maintaining and managing Human and other Resources, Infrastructure and Facilities, and in taking care of the requirements of Finance and Investment Advisory Services related work, Corporate Communication Services, Managerial Services, Admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed agreement dated 17.5.2007 made between these two company. On perusal of agreement it is found that ASK Investment Managers P. Ltd. (ASKIM) has agreed and accepted to provide the financial investment advisory and support services on the basis of sharing of actual costs and periodical reimbursement thereof on actuals, and on certain other terms and conditions. Here it is pertinent to mention that (i) the turnover of the assessee company is ₹ 1,90,13,083/which also includes rental income of R.21,60,000/. Looking into the business turnover of the assessee company, the amount of service charges paid to the associate company i.e. ASKIM of ₹ 1,34,47,688/cannot be said to be reasonable, justifiable and correct. It is clearly exaggera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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