TaxTMI 
TaxTMI 
2022 (5) TMI 942
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.... and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in holding that the reimbursement of expenses of Rs.1,20,013/- to appellant's associated enterprises was a sum chargeable to tax and hence, inadmissible under section 40(a)(i) of the Act as tax has not been deducted. 2. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in charging write back of excess provisions for salary of Rs.10,00,000/- to tax in as such excess provision has already been charged to tax in assessment year 2009-2010 and hence, resulting into double taxation. 3. On the facts and circumstances of the case and in law, it should be held that the educati....
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....sement in nature and there is no income embedded therein which accrues and arisen in India and consequently the said re-imbursement is not chargeable to tax in India. 4. On consideration of the assessee submission, it is seen that the contention of the assessee that the aforesaid reimbursement is not chargeable to tax in India is not acceptable. First of all, the assessee's contention that the amounts paid are only re-imbursement of cost without any mark-up is of no consequence, because the actual payment was made in respect of usage of Lotus Note E-mail and Abode Photoshope, which is in the nature of payment for professional serivces. The assessee had availed the services in India and hence it definitely comes under the purvie....
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....ive was unable to controvert the above assertion of the learned AR. 3.4 We have heard rival submissions and perused the material on record. The Tribunal in assessee's own case for assessment year 2011-2012 (supra) on identical facts had held that license fees has been paid for the use of software. It was further held by the Tribunal that the assessee's holding company procures software from third party and shared the cost with the assessee along with other group companies on a proportionate basis without any mark up. Therefore, it was concluded by the ITAT that the reimbursement of such expenses by the assessee cannot be held liable for TDS. The relevant finding of the Tribunal in assessee's own case for assessment year 2011-2012 (supra)....
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....ndon. Therefore, the expenditure cannot be disallowed by invoking the provisions of section 40(a)(ia) of the I.T.Act. It is ordered accordingly. 3.6 In the result, ground 1 is allowed. Write back of excess provision towards additional salary of Rs.10,00,000 (Ground 2) 4. The assessee had provided an amount of Rs.10 lakh towards additional salary and as it was only a provision, the same was disallowed by the A.O. and added back to the income of the assessee for assessment year 2009-2010. For the current assessment year the assessee did not make any claim as regards non-taxability of write back of provision of Rs.10 lakh, during the course of assessment proceedings before the A.O. However, the claim was made as an additional ground b....
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....ovision of additional salary. Since the A.O. in the remand report has clearly stated that the assessee's claim is correct, we direct the A.O. to delete a sum of Rs.10 lakh from the taxable income for the relevant assessment year, since the same had suffered tax in previous assessment year, namely, A.Y. 2009-2010. It is ordered accordingly. 4.5 In the result, ground 2 is allowed. Allowability of education cess paid as a tax deductible expenditure (Ground 3) 5. The above ground relates to the claim of deduction of education cess including secondary and higher educational cess as deduction while computing the total income. 5.1 We have heard rival submissions and perused the material on record. The Kolkata Bench of the Tribunal in t....