2010 (2) TMI 1168

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....ated 1.4.2009 and pertain to assessment year 2003-04. 2. The issue raised in the Revenue's Appeal is that on the facts and in the circumstances of the case, the learned CIT(A) has erred in deleting the addition of Rs. 71,21,298/- on the basis of the decision of ITAT in earlier assessment year in the assessee's case without appreciating the fact that the assessee had failed to deduct proper Tax at Source on payment made to parent company at Germany and that it was in nature of technical fee. The disallowance was rightly made invoking provision of section 40(a)(i). 3. The assessee company in this case is a 100% subsidiary of M/s Karl Storz Vertriebs Gmbh, Germany. During the course of assessment AO noted that a payment of Rs. 112.76 lac....

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.... 4. Upon assessee's appeal ld. CIT(A) noted the following submissions, "it was submitted that the assessee is a company and is a wholly owned subsidiary of a Karl Storz Gmbh and Co. KG Germany and is engaged in marketing and distribution of medical equipment in India. For the better management of its subsidiary company, Karl Storz Gmbh and Co. KG Tuttingen Germany deputed one of its employee as managing director of its subsidiary company, since the employee is well versed with the products and policies of the company. Salary paid to the deputed employee is to be paid by its subsidiary. Therefore, salary paid to the deputed employee by the Karlstorz Gmbh & Co. KG Tuttingen Germany is to be reimbursed to the German Company by its subsidiary c....

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....de by him. 6. Against this order the revenue is in appeal before us. 7. We have heard both the counsels and perused the records. It transpires that identical issue was considered by this Tribunal in assessee's own case for assessment year 1998-99 in ITA no. 2626 and assessment year 2001-02 in ITA 2301. In ITA no. 2301/Del/2006 vide order dated 19.3.2007 the Tribunal had concluded as under:- "5. We have carefully gone through the aforesaid order of the Tribunal. In that year also, the payment represented reimbursement of salary paid to Mr. Peter Laser by the German Company. The facts are identical with the facts obtaining in the present year and this is not disputed before us on behalf of the revenue. The Tribunal has held that the amount....