2015 (8) TMI 1398

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....ring for the Revenue urges the following two questions of law for our consideration. "(1) Whether the Tribunal was justified in deleting the disallowance of the amount of Rs. 34,94,816 being overhead charges paid to the non-resident holding company M/s PSO Beheer B.V.Rotterdam, Netherlands, u/s 40(a)(i) without appreciating the fact that these expenses were in the nature of Fees for technical services for which the Assessee was liable to deduct tax at Source u/s 195? (2) Whether on the facts and in the circumstances of the case, the Tribunal was justified in ignoring the finding of the CIT(A) that these charges were an estimate and therefore did not have any direct nexus with the actual expenditure?" 3 Briefly, the facts are that Respo....

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....nies would be recovered at a certain percentage of a total cost determined on consideration of the size of the group member, percentage of ownership, time spent by the management, number of visits etc. The agreement itself provided that the costs in respect of the Respondentassessee was fixed at 4% of the Total Overhead Costs incurred by the holding company. The Auditors certificate issued in respect of the holding company which is relied upon in the impugned order also confirmed that the expenses of 4% amounting to Rs. 34.94 lakhs is reimbursement of expenses without including any profit in it. 5 Besides the impugned order of the Tribunal held that the payment made by the Respondent assessee to its holding Company is entirely on account o....