TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1468
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....bcontractor and claimed by the assessee of Rs. 68,63,154/- ? [D] Whether the Appellate Tribunal is right in law and of facts in deleting the expenditure debited in P & L Account belonging to subcontractor of Rs. 1,09,70,601/-?" 2. Tax Appeal No.2143 of 2010 challenges the order dated 05/03/2010 passed by the ITAT in ITA No.54/Ahd/2007 for assessment year 2000-2001 and came to be admitted on the following questions of law: "[A] Whether the Appellate Tribunal is right in law and on facts in deleting the entire addition of Rs. 4,83,71,408/- being reimbursement of expenses to Head Office? [B] Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 1,82,55,408/- being expenditure incurred by the Head Office? [C] Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of Rs. 1,42,85,226/- u/- s. 40(a)(i) of the Act? [D] Whether the Appellate Tribunal is right in law and on facts in deleting of expenditure incurred by subcontractor and claimed by the assessee of Rs. 68,63,154/- ? [E] Whether the Appellate Tribunal is right in law and of facts in deleting the expenditure debited in P & L Account belongi....
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..../2007 and relevant discussions made therein are confirmed by this Court while deciding Tax Appeal No.2130 of 2010, following the same order and relying upon the same reasons, we answer the issue Nos.'C' and 'D' of Tax Appeal No.2142 of 2010 and issue Nos.'D' and 'E' of Tax Appeal No.2143 of 2010 in favour of the assessee and against the Department. 4. Now, so far as the question No.(C) of Tax Appeal No.2143 of 2010 is concerned, the learned Tribunal has observed in paragraph Nos.30 and 34 to 38 as under: "30.Ground NO.7 in the appeal of the assessee reads as under: "7.The learned CIT (A) has erred in confirming action of the learned Assessing Officer of making disallowance of Rs. 1,42,85,226/- u/ s. 40(a)(i) of the Act." 31.*** 32.*** 33.*** 34. We have considered rival submissions and material available on record. The relevant provisions in the Act on this issue are reproduced as under: 35. Section 40(a) (i) of the Act provides "Notwithstanding anything to the contrary in sections 30 to [38], the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession", -- (a) in....
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....ed "Interest payable account" or "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.]" 35. Section 9 (1) (vii) of the Act provides that the following incomes shall be deemed to accrue or arise in India: ---" income by way of fees for technical services payable by-- (a) the Government ; or (b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or (c) a person who is a non-residen, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India : [Provided that nothing contained in this clause shall apply in relation to any income by way of fees for technical services payable in pursuance of an agreement made before the 1st day of April, 1976, and appro....
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....s to non-residens. A O has not brought any evidence or material on record that the recipients who got 52 payments through sub contractor were liable to tax in India. A O has also not brought about their status for receiving the payments. No efforts have been made to prove as to how the payment in question was liable to tax under the provisions of Income Tax Act. Unless the income was chargeable to tax, there would be no tax liabilities to deduct tax as per provisions of Section 195 (1) of the IT Act. The A O has also not properly examined the provisions of DTA agreement with UK for the purpose of appreciating the issue. According to the assessee the amount is paid by the UK payer to UK payees, therefore, there was no reason to deduct TDS. The reimbursement of the expenses to the sub contractor for further payment to others was not appreciated in the light of the relevant provisions and how these expenses were considered as fees for technical services is also not considered by the A O. As regards the reimbursement of the expenses to the sub contractor, A O disallowed certain expenses treating the same to be liability of the sub contractor on other issues which have already been deci....
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....with the intention of withdrawing the goods from the contract, and he does nothing inconsistent with an intention to pass the property, the property may pass either forthwith subject to the seller's lien or conditional on performance by the buyer of his part of the contract. Even though the property in the goods may pass to the buyer when the documents are handed over, the buyer may yet retain the right to examine and repudiate the goods but this right generally which a buyer has in a c. i. f. contract does not by itself indicate that the property in the goods has not passed to him." In the case of C I T Vs Gulf Oil (Great Britain) Ltd. 108 ITR 874 (Bom) the Hon'ble Bombay High Court held, "on the facts that 54 the contracts were made in U. K. as the indents placed by the Indian company were accepted in U. K. The contracts were also executed outside India because once the goods were put on ship there was no reservation of right of disposal in the goods by the non-residen. Pursuant to the indents the products were not merely supplied by the non-residen company but actually sold to the Indian subsidiary at c. i. f. prices. The Indian company effected sales of the products....
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....and material brought on record by the A O, we do not find any justification to sustain the findings of authorities below. We accordingly set aside the orders of authorities below and delete the entire disallowance. As a result, ground No.7 in the appeal of the assessee is allowed." 4.1 Thus, in light of the above observations and discussions, when the learned Tribunal has decided the above referred question by making detail discussions, without assigning any further reasons, while adopting the said reasonings, we answer the said question in favour of the assessee and against the Department. 5. Now, so far as question No.(F) of Tax Appeal No.2143 of 2010 is concerned, the learned Tribunal has discussed the said in detail and relevant discussion made in paragraph No.43 which reads thus: "43. We have considered the rival submission and material on record. The facts as noted above are not in dispute. The assessee raised these temporary structures at the project site for the purpose of business and welfare of the employees. As per the clause 15(3) of the agreement with the principal (supra), the assessee was required to clear the site on completion of the project. The above facts, t....