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TMI Blog2023 (6) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... ould attract the consequence provided under section 40(a)(i). has been quashed and set aside by the Hon ble Supreme Court [ 2023 (5) TMI 586 - SC ORDER] while deciding the SLP filed by the assessee.. Thus, as on date, in view of the observations of Hon ble Delhi High Court and Hon ble Supreme Court, there was no legal obligation u/s 195(1) on the assessee to deduct tax at source under section 195(1) of the Act on the reimbursement of mobilization and demobilization cost to the holding company (VOAMC). That being the case, the disallowance made under section 40(a)(i) being unsustainable, is hereby deleted. Decided in favour of assessee. - ITA No. 8331/Del/2019 - - - Dated:- 29-5-2023 - Shri G.S. Pannu, Hon ble President And Shri Sak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961 (for short the Act ) vide order dated 16.03.2006, the Assessing Officer disallowed the amount of Rs. 8,65,57,909/- representing reimbursement of mobilization and demobilization cost paid to the holding company. Against the disallowance so made, the assessee preferred an appeal before the first appellate authority and, being unsuccessful, went before the Tribunal. 5. While deciding the appeal, the Tribunal restored the matter to the Assessing Officer with a direction to verify whether the assessee has deducted tax at source from payment made towards mobilization and demobilization charges in terms of order passed under section 195(2) of the Act and, in case, it was found that the assessee had deducted tax at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessable to tax in India. Accordingly, the consequences of section 40(a)(i) would be attracted. Thus, by virtue of the aforesaid decision of the Hon ble Supreme Court, the dispute was set at rest. However, in the meanwhile, the Assessing Officer reopened the assessment for the impugned assessment year by invoking the provisions of section 147 of the Act. In the reassessment proceeding, the Assessing Officer taking note of the observations of the Hon ble Delhi High Court (now quashed and set aside by Hon ble Supreme Court) again disallowed mobilization and demobilization cost of Rs. 8,65,57,909/- under section 40(a)(i) of the Act, alleging that the assessee failed to deduct tax at source on such payment. 7. As could be seen from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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