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TMI Blog2018 (11) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... e Kerala State Electricity Board [for brevity "KSEB"], for supply of technical services. Whether such travel expenses could be claimed as a deduction from the technical know-how fees, is the question raised in the appeals. The Assessing Officer [for brevity "AO"] found such claim to be prohibited by Section 115A(3) of the Income Tax Act, 1961 [for brevity "IT Act"]. The first appellate authority and the Tribunal affirmed the said view. The Tribunal relied on an order of the very same Tribunal in I. T. A. No. 440/Coch/1998 in M/s. SNC Shawinigan Inc. Canada v. Additional Commissioner of Incom e -tax (Assmt. ). The facts in the cited decision and the present appeals are identical. 2. Shorn of details, on basic facts, the appellant-assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or allowance shall be allowed to the assessee under sections 28 to 44C and section 57 in computing his or its income referred to in sub-section (1)". By sub-section (3), any deduction in respect of any expenditure or allowance under Sections 28 to 44C and Section 57 has been specifically prohibited. 4. The assessee-appellant relies on a decision of the Hon'ble Supreme Court in Director of Income Tax v. A. P. Moller Maersk [(2017) 5 SCC 651]. Therein the foreign company, who was assessed to tax, was carrying on the business of shipping within India. Whether the income from the use of Global Telecommunication Facility, called "Maersk Net", could be classified as income arising out of shipping business and not as fees for technical se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to the agents. Only an access was provided to a telecommunication facility; the installation of which necessitated an expenditure, which was reimbursed by the agents who had access to such facility. This was held to be not reimbursement of the expenses incurred in the supply of technical services nor income earned on providing technical services. 6. In the present case, the facts are quite distinguishable. The expenditure incurred is a direct consequence of the agreement for supply of technical services. The technical collaboration agreement necessitated deputation of technical personnel from the foreign company to the KSEB to work within India and in the facilities of the KSEB. The expenditure now claimed is of the travel ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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