TaxTMI 
TaxTMI 
2012 (10) TMI 816
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....n this appeal is against the taxability of Rs. 1,24,06,210 being reimbursement of traveling expenses as fees for technical services. Briefly stated the facts of the case are that the assessee, a non-resident, received a sum of Rs. 54,55,44,925 from Hazira Marine Engineering & Construction Management Private Limited (HME) and Hazira Cryogenic Engineering Construction Management Private Limited (HCE) as fees for technical services for providing management services and personnel to them. Apart from that, the assessee received reimbursement of traveling expenses from HME and HCE amounting to Rs. 31,59,238 and Rs. 92,46,972 respectively totaling Rs. 1,24,06,210. The said reimbursement of travelling expenses was claimed as not taxable. On being c....
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....ovide to the Personnel provided by BOS the following allowances / facilities in India - * Residential accommodation in India; * Transportation and travel, including travel outside India; * Living allowance per month as may be mutually agreed upon by BOS and HME from time to time; * Such other benefits/facilities as may be mutually agreed upon by BOS and HME from time to time." 4. From a bare perusal of the above clause, it is apparent that the HME, apart from paying fees for technical services at the rate of prescribed Euros per day to Senior Manager, etc., also undertook to bear their transportation and travelling expenses along with living allowance. Detail of travelling e....
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....paper book which contains the total amount of 29952400 Euros. Bifurcation of this amount is given on page 91 of the paper book which is annexure to the invoice. This annexure refers to personnel costs of 28700000 Euros and travels totalling 1252400 Euros. Various other pages in the paper book amply demonstrate that the amount claimed by the assessee reimbursed by HME does not contain any element of profit. It is evident from the copies of invoices raised by travel agency that the amount given in such invoices of travel agency exactly tallies with the amount claimed by the assessee from HME. Thus, it can be seen that the total sum of Rs. 1.24 crore is in the nature of reimbursement of travelling expenses incurred by the assessee without havi....
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....ld that the reimbursement does not have any element of income comprised therein and hence not liable to tax. Copy of the order passed by the DRP in assessee's own case for assessment year 2006-2007 is available on record. 7. In view of the foregoing discussion it is manifest that the reimbursement of travelling expenses amounting to Rs. 1.24 crore cannot be included in the fees for technical services and the same is not taxable. The impugned order is overturned to that extent. Assessment Year 2004-2005 8. First issue raised in this appeal is against the reimbursement of travelling expenses amounting to Rs. 82,17,160. Both the sides are in agreement that the facts and circumstances of this issue are similar to those for assessment y....