TaxTMI 
TaxTMI 
2017 (3) TMI 263
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....xpenses made by CECO Electronics (P) Ltd. on behalf of Control Engineering Co. is considered to be genuine, it does not change the nature of payment made by the assessee to M/s. CECO Electronics (P) Ltd. The nature of payment is contractual and the assessee is required to deduct TDS on it. So without being prejudice about the genuineness of the expenses, the payment of Rs. 49,53,046/- made to CECO is not reimbursement but contractual. 3. The appellant craves for leave to add, delete or modify and grounds of appeal." 3. The brief facts of the case are that the assessee is an individual having business where income from manufacturing of inverter drives and control panel and trading of switchgear items. The return of income for AY 2009-10 w....
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....l requirements regarding payment as deduction of TDS etc. are done by the CECO; (iv) till AY 2007-08 all payment made by the assessee to CECO is shown by the assessee as contractual payment. (v) From AY 2008-09 assessee changed the nomenclature of the payment to CECO but Ld. AR of the assessee was unable to explain why the nomenclature of expenses is changed inspite of the fact that the services rendered by CECO was same as in the previous year. 5. The AO observed that CECO gives some services as claimed by assessee and the assessee makes payment against it. The AO came to the conclusion that the nature of payment is contractual payment or payment for managerial support and the assessee was required to deduct TDS on it and, t....
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....contended that the expenditure were contractual payment covered u/s. 194C of the Act. The assessee submitted that no amount has been paid to CECO over and above the actual amount of expenditure. The reimbursements are not to be treated as payment which constitutes receipts in the hands of the recipient. The assessee on this issue relied on two Tribunal decisions (i) ITO Vs. K. M. Varghese & Co., ITA No. 4091/Mum/2010 and (ii) ACIT Vs. Minpro Industries, ITA No. 394/Jodh/2008. The Ld. CIT(A) in his order after considering the assessment order and submission of the assessee observed that certain payments were made by the assessee to CECO in respect of expenses incurred by CECO on behalf of the assessee. The AO has considered these payments be....
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....said material was entirely with concerned suppliers till its supply to assessee company and contract between assessee company and those suppliers was for sale of goods and not for work as envisaged in section 194C of the Act. It was held yes, whether, therefore, section 194C was not applicable and assessee was not required to deduct tax at source under that section-held yes. The ITAT, Delhi Bench in this case has held that here was the situation where various packing materials were procured by the assessee company during the year under consideration from several manufacturers where regularly manufacturing such materials. It was also observed that even though the said packing material was manufactured by the concerned suppliers a....
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....circumstances of the case and heard the rival contentions. We observed at the time of hearing as our attention was drawn by the Ld. AR to the fact that there existed a royalty-cum-reimbursement agreement between the assessee and CECO and as per the said agreement certain service charges for contract job work were to be reimbursed by the assessee to CECO e.g. (i) royalty for use of the name of CECO, (ii) reimburse of direct expenses made exclusively by CECO for the business of the assessee and (iii) payment for services and reimbursement will be based on practical aspect and requirement of funds. Therefore, this clause is clear about the fact that all direct expenses made by CECO have to be reimbursed by the assessee.....