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TMI Blog2018 (8) TMI 2160X X X X Extracts X X X X X X X X Extracts X X X X ..... f the tax was deducted at source in respect of income for the year under consideration, it is not known why the tax deducted was not given credit? Therefore, this Tribunal is of the considered opinion that the matter needs to be re-examined by the AO Accordingly, the order of the AO is set aside and the issue is remitted back to the file of the AO to re-examine whether the income is taken as income by the assessee. It also needs to be verified whether tax was deducted at source in respect of the income. Royalty receipts - Year of assessment - as submitted that the royalty income is taxable on receipt basis as per Article 12(4) of DTAA between India and Japan and assessee has already disclosed the income during the assessment year 2015-16 - HELD THAT:- As reported the royalty payable to the assessee in Form 3CEB. Correspondingly, the assessee has reported the same in Form 3CEB. The assessee claimed before the AO that a provision was made by M/s Panasonic Appliances India Co. Ltd. and no tax was deducted on the said sum. These details have not been verified by the AO. Therefore, this Tribunal is of the considered opinion that the AO has to re-examine the issue afresh. Accordingly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction of tax and may pass order in accordance with law. 5. We have considered the rival submissions on either side and perused the relevant material available on record. Even though the Ld. representative for the assessee claims that Panasonic Carbon India deducted tax of ₹ 1,15,84,022/-, it is not known for which year the tax was deducted and whether the corresponding income was declared by the assessee for taxation during the year under consideration need to be examined by the Assessing Officer. Therefore, this Tribunal is of the considered opinion that as rightly submitted by the Ld. D.R., the fact needs to be verified by the Assessing Officer. Accordingly, the order of the Assessing Officer is set aside and the issue of TDS credit by Panasonic Carbon India and royalty of ₹ 1,15,84,022/- is remitted back to the file of the Assessing Officer for reconsideration. The Assessing Officer shall re-examine the matter in the light of the material that may be filed by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee. 6. The next issue arises for consideration is treating ₹ 7,14,097/- as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the same in Form 3CEB. The assessee claimed before the Assessing Officer that a provision was made by M/s Panasonic Appliances India Co. Ltd. and no tax was deducted on the said sum. These details have not been verified by the Assessing Officer. Therefore, this Tribunal is of the considered opinion that the Assessing Officer has to re-examine the issue afresh. Accordingly, the order of the Assessing Officer is set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee. 13. The next issue arises for consideration is reimbursement of employee cost / secondment of employee. 14. Shri R.K. Kapoor, the Ld. representative for the assessee, submitted that M/s Panasonic Corporation is a company incorporated in Japan. M/s Panasonic Corporation engaged itself in the business of development, production and sale of electrical and electronic products, systems and components for a wide range of consumer, business and industrial uses. According to the Ld. representative, during the course of business act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the reimbursement of salary cannot be considered to be income in the hands of the assessee. Therefore, there is no question of any addition or disallowance in the hands of the assessee while computing the taxable income. 17. The Ld. representative for the assessee further submitted that the very object of secondment of employees was to support the Indian subsidiary company by a parent company. There was no economic benefit to the assessee-company. Therefore, according to the Ld. representative, the judgments of various Courts referred by the Assessing Officer in the draft assessment order as well as by the Dispute Resolution Panel in its order are not applicable to the facts of the case. According to the Ld. representative, what was received by the assessee from Panasonic India Pvt. Ltd. is only a reimbursement of cost of salary of the employees. Therefore, according to the Ld. representative, the same cannot be construed as income, hence, the Assessing Officer is not justified in assessing the same as income of the assessee. 18. On the contrary, Shri M. Sreenivasa Rao, the Ld. Departmental Representative, submitted that it is not a case of transfer pricing adjustment as projecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. What was received by the assessee is fee for technical service. The service rendered by the employees of the assessee clearly demonstrates that the technology was made available to the Indiian subsidiary, therefore, there is no need for the assessee's employees to come again. 20. We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the Transfer Pricing Officer found that there was no adjustment required in respect of reimbursement of salary cost received by the assessee towards employees deputed to Panasonic India Pvt. Ltd. Taking advantage of the Transfer Pricing Officer's order, the Ld. representative for the assessee claimed before this Tribunal that the Assessing Officer is bound by the order of the Transfer Pricing Officer, therefore, he is bound to pass an order in conformity with the order of the Transfer Pricing Officer. On a query from the Bench, when the Assessing Officer chose to pass a draft assessment order under Section 144C(1) of the Act instead of passing an order in conformity with the order of the Transfer Pricing Officer, whether the assessee is challenging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el retain their lien when they come to India. They lend their experience as an employee of Panasonic Japan only and not otherwise as the groups / processes standards are sought to be implemented. The deputed personnel have come to India, to imbibe the culture of the group and ensure the application of the Panasonic group policies / processes and other quality standards in Panasonic India. This clearly demonstrates once the processes and policies are imbibed / retained, there is no need for the personnel again and Panasonic India can apply the same by itself. Hence the services have also made available the technical knowledge / skill and experience. 22. The DRP has observed as follows at para 4.4 of its order:- 4.4. Thus these employees had just been deputed with Panasonic India for providing certain services to it as they had specific skill set and expertise. As per clause B on page 1 of the agreement, the Panasonic India requires support from the assessee as the expertise can be provided by its staff alone and not by local recruitment. In its reply dt 28.09.2016, the assessee had submitted that the purpose of seconding these employees was the utilization of technical as well as le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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