TaxTMI 
TaxTMI 
2017 (6) TMI 1255
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.... for assessment years (AYs) 2010-11 & 2011-12 of even date, i.e., 15/12/2011. 2. The issue arising in the instant appeals is the nature of the payments, debited to the account head or classified as 'Reimbursements' by the assessee, a Chennai based software company, handling business verticals like, pension plan administration, health care practice, system integration solutions, etc., to Gulf Outsourcing LLC ('GOS' for short), a Dubai based foreign company (nonresident), to whom it is providing services under a consultancy agreement dated 04/03/2009 (PB-I/pgs.1-10). While the assessee claims the same to be toward reimbursement of salary to it's employees working onsite on different projects for GOS, the service recipient, as well as their t....
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....cument and, therefore, by itself of no moment, the fact remains that the debit notes have been raised by GOS on the assessee. Then, again, the question arises as to why would it pay for the travelling or other related expenditure incurred by the employees, which may in fact exceed their entitlement, or may be for travel, etc., which is not authorized by the assessee-company. That is, how could it validate the expenditure and, besides, has control implications, while with regard to salary the same may have been communicated by the assessee-company thereto, which though would require being substantiated by some contemporaneous evidence. The expenditure is the assessee's contractual obligation and the onus is on it to make suitable arrangement....
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....t of the assessee-company, depicting thus also an inconsistency in it's (assessee's) stand. The Revenue's stand, we may at the same time state, does not take into account the employment agreements and the monthly debit notes raised by GOS on the assessee. The treatment of the said transactions in the books of GOS, both at the time of payment and its' recovery, would also be relevant, which (the said books) would also throw light on the relationship, if any, with Info-Drive LLC, UAE. In this regard we also wonder, as to why the payee does not raise monthly debit for the total salary payment, or at least project wise, rather than separately for each employee, all of whom would be normally paid on the same date. The assessee, though has furni....