2023 (6) TMI 268

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....rned Senior Departmental Representative. We have also perused the materials on record. 3. The dispute in the present appeal relates to disallowance of reimbursement of mobilization and demobilization expenses of Rs. 8,65,57,909/-. 4. Before we proceed to deal with the aforesaid substantive issue, it is necessary to provide a brief factual backdrop. The assessee, a resident corporate entity, is a wholly owned subsidiary of M/s. Van Oord ACZ BV, Netherlands (now M/s Van Oord ACZ Marine Contractors BV) (in short 'VOAMC'). As stated, the assessee is engaged in the business of dredging, contracting reclamation and marine activities. For the assessment year under dispute, the assessee filed its return of income on 24.11.2003 declaring loss ....

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....he Hon'ble High Court held as under: "25. We, thus, answer the question No.1 in favour of the appellant/assessee holding that the assessee was not liable to deduct tax at source under section 195(1) of the Act in respect of the mobilization and demobilization costs reimbursed by the appellant to VOAMC. The assessment proceedings in VOAMC are reopened and the final view taken is that the VOAMC is assessable to tax, the assessee herein would also be treated as assessee in "default", which would attract the consequence provided under section 40(a)(i)." 6. As it appears, challenging certain observations of the Hon'ble Delhi High Court, the assessee filed a Special Leave Petition (SLP) before the Hon'ble Supreme Court. While deciding....