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TMI Blog2024 (7) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessment order passed by the National e-Assessment Centre, Delhi (Learned Assessing Officer) under section 143(3) of the Income Tax Act, 1961(the Act), was partly allowed. The Learned Assessing Officer is aggrieved with the order of the Learned CIT-A deleting the disallowance of demurrage charges and reimbursement of salary paid to seconded employees on account of non-deduction of tax at source. 03. The assessee has filed cross objection for refund of the excess dividend distribution tax paid on account of dividend paid to non-resident shareholder, viz. Total Marketing Services, France and Total Holding Asie, France. The grievance of the assessee is that the dividend distribution tax in relation to the dividend paid to non-resident shareholders ought to have been paid @ 10% in terms of Article 11 of the India - France tax treaty which has been further reduced to 5% in view of Para 7 of the Protocol between India and France in view of benefit of 'Most Favoured Nation' clause read with tax treaty between India and Slovenia is available against the rate of 20.36% specified under section 115-O of the Act. Thus, the assessee is asking for a refund of excess dividend dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rges and reimbursement of cost of seconded employees are subject to tax deduction at source under section 195 of the Act and therefore, in the absence of any explanation by the assessee, the disallowance was correctly made. He submitted that the Learned CIT-A has merely followed the order of the Coordinate Bench without examining the facts in the present year. 07. The Learned AR submitted that the Coordinate Bench in the assessee's own case has already decided the disallowance of demurrage charges for non-deduction of tax for earlier years. He referred to ITA Nos.4300 & 4135/MUM/2016 for assessment year 2010-11 and subsequently for succeeding years various orders of the Tribunal till assessment year 2015-16 wherein the issue has been decided in favour of the assessee by deleting the disallowance of demurrage charges. Accordingly, he submitted that there is no requirement of deduction of tax at source on demurrage charges under section 195 of the Act and therefore, the disallowance is correctly deleted. 08. With respect to reimbursement of expenses of seconded employees, he submitted that this issue is also squarely covered in favour of the assessee by the decision of the Coordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer is dismissed, holding that no tax is required to be deducted on reimbursement of salary to seconded employees, amounting to Rs.11,44,50,849/-. Thus, the appeal of the Assessing Officer for assessment year 2017-18 in ITA No.97/MUM/2023 is dismissed. 11. Now the question arises for assessment year 2018-19. ITA No.96/MUM/2023 is filed by the Assessing Officer for assessment year 2018-19, raising the following grounds: 1. "Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A), erred in directing the A.O. to give credit for DDT after verification of the return and accompanying documents as per law while the matter agitated in the ground is not about giving credit but granting of refund of excess DDT in view of DTAA between India and Slovenia read with MFN clause of India-France DTAA? 2. Whether on the facts and in circumstances of the case and in law, the Ld. CIT (A), NFAC erred in adjudicating the ground to refund excess DDT and giving the directions without appreciating that the appeal is against the order u/s. 143(3) and not against any order u/s.237 of the Act? 3. Whether on the facts and in circumstances of the case and in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Section 237 of the Act read with Article 265 of the Constitution of India, only legitimate tax could have been retained. 13. CO No.29/MUM/2023 for assessment year 2017-18 filed by the assessee is also on identical grounds. 14. For AY 2018-19 , brief facts of the case shows that the assessee filed its return of income on 30/11/2018 at an income of Rs. 186,37,54,609/-. The case of the assessee was selected for scrutiny resulting into assessment under section 143 of the Act at the same income, by order dated 30/9/2021. Despite there being no addition, the assessee preferred an appeal before the Learned CIT-A which was entertained. The only claim of the assessee before the Learned CIT-A was with respect to refund of excess dividend distribution tax and deduction of education cess along with interest under section 234C of the Act. The claim of the assessee is that dividend under consideration is taxable @ 5% only. The facts show that the assessee has declared a dividend of Rs. 73,25,32,504/-. The assessee has two shareholders who are resident of France. The dividend distribution tax was worked out under section 115 of the Act @ 20.361% at Rs. 14,91,26,382/-. The claim before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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