TaxTMI 
TaxTMI 
2015 (6) TMI 383
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.... are that the assessee is an Indian Company and is a joint venture between UPS International Forwarding Inc., USA and Jetair Private Limited with shareholding of 60% and 40% respectively. It is engaged in the business of international express delivery services. The assessee filed its Return of Income for Assessment Year (AY) 2008-09 on 30 September 2008 declaring a total income of Rs. 5,47,02,122 under Section 139(1) of the Act. In the assessment, the Assessing Officer ('AO') disallowed the following expenditure: i. Reimbursements of Rs. 34,45,995 at cost to UPS Worldwide Forwarding Inc. (UPSWWF') treated as taxable income and disallowed under Section 40(a)(i) of the Act. ii. Reimbursements of Rs. 36,69,834 at cost to UPSW....
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....of the Act on the assets imported from UPSWWF." 6. The revenue in its appeal (i.e. ITA No.3311/M/2013), has taken solitary ground, which reads as under :- "1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance of advertisement expenses of Rs. 20,05,985/- on the basis that the assessee had produced evidences in support of the said expenses, even though the assessee could not conclusively establish that the advertisement services for which payment was made, were actually received by it. 2. The appellant prays that the order of the CIT(A) on the grounds be set aside and that of the Assessing Officer be restored." 7. Rival contentions have been heard and record perused. The a....
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.... AR that since the invoices raised by UPSWWF on assessee can be matched back-to-back with the invoices raised by RMS, the payment is reimbursement in nature, without any profit element and is hence not taxable. Reliance is placed on the following decisions for the proposition "Payment by way of reimbursement of expenses incurred on behalf of payer is not income chargeable to tax in the hands of payee and hence there is no disallowance . under Section 40(a)(i) : i. CIT v. Siemens Aktiongesellschaft [2009] 310 ITR 320 (Bom) ii.DIT (IT) v. WNS Global Services (UK) Ltd. [2013] 214 Taxman 317 (Bom) iii.CIT v. Angel Capital & Debt Market Ltd. ITA (L) No. 475 of2011 (Bom) iv.Nathpa Jhakri Joint Venture Vs. ACIT [2010] 131 ITJ 702 (Mum)....
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....to disallowance of Rs. 36,69,834/- paid to the UPSWWF for services rendered by Titus, we found that assessee has obtained legal services, payment for which was initially made by UPSWWF and were later on reimbursed by assessee. The AO observed that UPSWWF is only facilitator. The payment so made is subject to TDS as per Section 195 r.w.s.9(1)(vii) and Explanation to section 9(2). Accordingly, disallowance was made u/s.40(a)(i). By the impugned order, the CIT(A) confirmed the disallowance. 14. It was also argued by ld. AR that Titus being a resident law firm, is liable to tax in India. In view of proviso to Section 40(a)(i), in case of tax has been paid by payee, no disallowance is warranted in the hands of the payer u/s.40(a)(i) of the Ac....
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....reciation on assets imported by assessee in the form of computers, scanners, printers from UPSWWF of Rs. 42,98,029/-, the AO disallowed assessee's claim of depreciation by observing that assessee has not furnished any evidence in the form of customs clearance certificate, bill of entry etc. As per AO it is not verifiable as to whether the goods have been actually imported by assessee and payment has been made to UPSWWF. By the impugned order, the CIT(A) confirmed the action of the AO, against which assessee is in further appeal before us. 18. Ld. AR drew our attention to the statement of facts evidencing furnishing of documents discussed by the AO. We found that payment has been made by assessee to the custom authority while importing th....