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TMI Blog2023 (11) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer (AO) u/s 143(3) r.w.s. 147 of the Act on 05.12.2018. The grounds raised by the revenue read as under: - 1. The order of the ld. Commissioner of I.T. (Appeals) is erroneous on facts of the case and in law. 2. The learned CIT(A) erred in deleting the disallowance made u/s. 40(a)(i) of the IT Act towards payment of secondment cost to the tune of Rs. 28.09 crores, made by the assessee company to M/ s. Caterpillar US, without deduction of tax at source u/s. 195 of the IT Act. 3. The learned CIT(A) erred in deleting the disallowance made u/s. 40(a)(i) of the IT Act towards payment of secondment cost, without appreciating that the payment to the US and other entities were not in the nature of reimbursement, and the assessee is under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As is evident, two issues fall for our consideration viz. disallowance u/s 40(a)(i) for want of deduction at source on certain foreign payments made by the assessee and rate of depreciation on computer software. The assessee has filed cross-objection on jurisdictional grounds. 2. The Ld. CIT-DR advanced arguments and supported the impugned disallowances made by Ld. AO whereas Ld. AR filed various details and also advanced argument supporting the impugned order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. Assessment Proceedings 3.1 The assessee being resident corporate assessee is stated to be engaged in manufacturing and sale of moving machineries. During reassessment proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to the extent related to the period of their assignment to India. The overseas entity raised debit note on the assessee and the same was reimbursed on cost-to-cost basis without any profit element to payee. Therefore, no tax was deducted at source. Reliance was placed on the decisions of Supreme Court in the case of DIT v/s AP Moller Maersk AS (78 Taxmann.com 287) and also the decision in GE India Technology Centre Pvt. Ltd. v/s CIT (327 ITR 456) and various other decisions. The assessee also drew attention to the decision of Bangalore Tribunal in assessee's own case ITA No.606/Bang/2010 dated 29-02-2012 rendered in the context of an order passed u/s Sec.201(1) of the Act on the same issue for this very year. The Tribunal observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (CA No.2289-2293 of 2021) as referred to by revenue, is on the issue of applicability of service tax on such payments. The Hon'ble Court held that the assessee was the service recipient for such services and accordingly, liable for payment of service tax. In the present case, we are concerned with disallowance u/s 40(a)(i) for want of TDS on such payments. Therefore, this case law do not apply to the facts of the case. 5.1 On the issue of depreciation, the assessee submitted that software license was integral part of computer system and the same was in the nature of computer program stored on a device. The functioning of the computer and the software was interlinked and inseparable. Therefore, the software would be eligible for same rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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