https://www.taxtmi.com/caselaws?id=465506 The dominant issue was whether reimbursement/cross-charges of ESOP expenses paid by the assessee to its foreign holding company attracted TDS under s.195, justifying disallowance under s.40(a)(i). Applying the principle that reimbursement per se is not income in the recipient's hands, and relying on SC authority that s.195 applies only where the payment contains an income element chargeable to tax in India, the Tribunal held the ESOP cross-charges were not chargeable under the Act and therefore no withholding obligation arose. Consequently, disallowance under s.40(a)(i) was unsustainable and the appeal was allowed. en-us Fri, 21 Jul 2023 00:00:00 +0530 Mon, 29 Dec 2025 18:53:39 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=465506 The dominant issue was whether reimbursement/cross-charges of ESOP expenses paid by the assessee to its foreign holding company attracted TDS under s.195, justifying disallowance under s.40(a)(i). Applying the principle that reimbursement per se is not income in the recipient's hands, and relying on SC authority that s.195 applies only where the payment contains an income element chargeable to tax in India, the Tribunal held the ESOP cross-charges were not chargeable under the Act and therefore no withholding obligation arose. Consequently, disallowance under s.40(a)(i) was unsustainable and the appeal was allowed. Case-Laws Income Tax Fri, 21 Jul 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=465506