TaxTMI 
TaxTMI 
2023 (11) TMI 275
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....0, but thereafter discontinued the said service and consequently, no service was provided qua IT Services during the FY 2010-11, relevant to AY 2011-12, as involved in this case. 3. The Assessee declared its total income of Rs. 3,02,59,990/- by e-filing its return of income on dated 30.11.2011, which was subsequently revised on dated 23.03.2013 by filing revised return of income, wherein the Assessee declared total income of Rs. 3,02,59,994/-. 4. Subsequently, the case of the Assessee was selected for scrutiny through CASS and therefore statutory notices were issued, against which the Assessee attended the hearings before the Ld. AO from time to time and filed its submissions and details in support of its case. On perusing the same, the ld. AO observed that the Assessee has entered into following international transactions with its Associated Enterprises (AE) during the year under consideration. Sr. no. Type of international transaction Transfer Pricing Method Total value of transactions (Rs.) MAM PLI 1. Provision of ITes services Transactional Net Margin Method (TNMM) OP/OC 9,06,08,346 2. Provision of Management Services 7,....
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....om the list of comparables and to take correct margin of E4e Healthcare @ 4.62%. 9.1 The Ld. DRP during the proceedings before it, also observed that the Assessee had made payment qua reimbursement of salaries of employees seconded from Serco Group PLC, UK, which prima facie appears to require TDS under section 195 of the Act, in the light of the decision of Hon'ble Supreme Court in the case of Centrica India Offshore Pvt. Ltd. Vs. CIT 364 ITR 336 and therefore issued a notice dated 14.10.2015 for enhancement of income, by fixing the case on 19.11.2015, against which the Assessee vide its submissions dated 20.11.2015, elaborately distinguished the decision of Centrica India (supra)and claimed that TDS has been deducted from the salaries paid to the employees and therefore disallowance under section 40a(i) of the Act is not warranted. 9.2 The Ld. DRP found the aforesaid claim of the Assessee not acceptable and by observing mainly "that this argument is not acceptable because the facts in the case of the Assessee shows great similarity to that of Centrica which has been discussed in details. Perusal of the broad principles laid down by the Hon'ble High Court and approved by the....
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.... international transaction 45,30,417 45,30,417 Difference between ALP and price charged by the Assessee. 51,52,857 47,90,424 10.1 The AO ultimately, as per directions of the Ld. DRP, reduced (i) the adjustment of ALP to Rs. 47,90,424/- in place of Rs. 51,52,857/- which was made by the TPO vide its order dated 16.01.2015, and also (ii) made the addition of Rs. 2,99,20,449/- on account of disallowance under section 40a(i) of the Act, for non-deduction of TDS under section 195 of the Act. 11. The Assessee being aggrieved challenged the actions of the Ld. DRP and AO in determining the ALP by selecting the companies as comparable against the interest of the Assessee and making the additions of Rs. 47,90,424/- on account of disallowance qua TP Adjustments u/s 92CA of the Act and of Rs. 2,99,20,449/- on account of disallowance under section 40a(i) of the Act for non-deduction of TDS under section 195 of the Act. 11.1 The Assessee during the course of the argument of this appeal, with regard to selection of comparables for determination of Arm's Length Price, only agitated/pressed the grounds relating to inclusion of (i) TCS E-serve Ltd. (in short "TCS") and (....
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....etween TCS and Citi Group are deemed to be international transaction entered into two AE as per section 92B(2) of the Act and therefore, in this case TCS ought to be excluded from the list of comparable as it has turnover of Rs. 1,442.42 Crores as compared to the turnover of the Assessee of Rs. 24.23 Crores only and enjoying the benefits of high brand value of Tata. 11.5 The Assessee for exclusion of eClerx, submitted the comparative chart of FAR of eClerx and the Assessee company, which reads as under: eClerx Services Ltd. The comparative chart of FAR of eClerx Services Ltd and Assessee company can be summarized as under: Sr. No. Particulars eClerx Services Limited Serco India Private Limited 1 Revenues (Turnover) Rs. 341.91 Crores (Page 57 of Annual Report) (PB-406) Rs. 9.06 Crores of ITes (approx. 38 times) (Total Rs. 24.23 Crores) 2 Fixed Assets Rs. 29.54 Crores (Page 56 of Annual Report) (PB-405) Rs. 1.63 Crores (More than 18 times) 3 Risk The company operates full-fledged risk-taking enterprise. Minimal risk as 100% of the services are provided to AEs. 4 Nature of Services The company is into KPO (Knowledge Pro....
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....Crores, the companies which have turnover in the range of Rs. 1 Crore to Rs. 200 Crore can be selected as comparables but not otherwise. 11.10 The Assessee further claimed that the Hon'ble Karnataka High Court in the case of Acusis Software India Pvt. Ltd. Vs. ITO- 11(1), Bangalore (2018) 98 taxmann.com 183 (Karnataka) has affirmed the decision of the Tribunal in holding that if the turnover of the comparable company is less or more than 10 times of the turnover of the Assessee, then it cannot be considered as a comparable company. 11.11 Further the Hon'ble High Court of Delhi as well in various cases including in Agniky India Technologies Pvt. Ltd. (2013) 36 taxmann.com 289 (Del.) considered the identical issue and categorically held that a giant company having high turnover and high brand value, cannot be compared with smaller captive unit of the parent company. 12. On the contrary, the Ld. DR vehemently argued that huge turnover ipso facto does lead to exclusion of the company as comparable, in view of the judgment in the cases of Chryscapital Investment Advisors Pvt. Ltd. and Rampgreen Solutions Pvt. Ltd. (supra). High Turnover /Brand Value/High Fixed Assets are not th....
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....it is involved/engaged in ITES and Software Development Services as well and providing services pre-dominantly to Citi Group. Segmental information between ITES and software development services of TCS is not available. There is presence of reputed brand, super normal profits and abnormal fluctuations in profits and abnormal profitability trend, significant high turnover and high base/size of the employee and therefore not comparable with the Assessee. 14.3 The ld. DRP, rejected the said contentions of the Assessee and somehow approved TCS as comparable on the following reasons; "Functionally comparable: The objection on turnover/ scale is effectively addressed by the jurisdictional High Court in Chrys Capital and Rampgreen supra. The Taxpayer has not shown how payment of Tata Brand equity and ownership of Intangibles is leading to high profit margin given that most of the revenues are derived from a long term contract from a single customer i.e. Citigroup. Undoubtedly TCS Global Network Delivery Model is being leveraged to service clients globally, however Actis Global as per its TP Study also leverages on all the valuable intellectual property rights and othe....
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....ation, has to be carried out. 14.5 The Hon'ble High Court in the case of Rampgreen Solutions Pvt. Ltd. (supra) also held" that in order for the benchmarking studies to be reliable for the purposes of determining the ALP, it would be essential that the entities selected as comparables are functionally similar and are subject to the similar business environment and risks as the tested party. Any factor, which has an influence on the PLI, would be material and it would be necessary to ensure that the comparables are also equally subjected to the influence of such factors as the tested party. This would, obviously, include business environment; the nature and functions performed by the tested party and the comparable entities; the value addition in respect of products and services provided by parties; the business model; and the assets and resources employed. It cannot be disputed that the functions performed by an entity would have a material bearing on the value and profitability of the entity. It is, therefore, obvious that the comparables selected and the tested party must be functionally similar for ascertaining a reliable ALP by TNMM. Rule 10B(2) of the Income Tax Rules, 1962 ....
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....rt in the case of Acusis Software India Pvt. Ltd. Vs. ITO-11(1), Bangalore (2018) 98 taxmann.com 183 (Karnataka) as referred to by the Assessee, has approved decision of the Tribunal in holding "that if the turnover of the comparable company is less or more than 10 times of the turnover of the Assessee, then it cannot be considered as a comparable company". The Hon'ble High Court of Delhi as well, in various cases including in Agniky India Technologies Pvt. Ltd. (2013) 36 taxmann.com 289 (Del.) considered the identical issue and categorically held that a giant company having high turnover and high brand value, cannot be compared with smaller captive unit of the parent company. Further in Avaya India (P.) Ltd. case (supra) the Hon'ble Delhi High Court has also considered the high turnover of companies and brand value as well, for exclusion of comparables. 14.9 Considering the aforesaid facts and respectfully following the decisions of the Hon'ble Courts referred to above, we are of the considered view, that the TCS and eClerx are not comparable with the Assessee in any mode such as Revenue Turnover, Fixed Assets, Brand Value, Brand Contribution, Risk, Nature of Services, Related ....
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....Sr. No. Name of Employee Designation Date of Joining (Period during the year) Part salary in foreign currency reimbursed to Serco UK 1 Mr. Robert Clayton McGuiness/ Bob McGuiness Regional Chief Executive Officer 07/01/2010 (12 months) Rs. 2,24,79,687/- 2 Mr. David Anthony Burke Chief Finance Officer 01/09/2010 (7 months) Rs. 47,31,170/- 3 Mr. Paul Alan Gasken HR Officer 03/01/2011 (3 months) Rs. 27,09,592/- Total Rs. 2,99,20,449/- Infact the aforesaid employees, have also filed their returns of income in India, declaring inter-alia salary income received from the Assessee, as its reflect from their Income Tax Returns, produced before us by the Assessee. 15.3 The Assessee further claimed that though the Ld. AO has not proposed any disallowance under section 40(a)(i) of the Act in Draft Assessment Order, however the Ld. DRP while relying upon the decision of Hon'ble Delhi High Court in the case of Centrica (supra) show-caused the Assessee, as to why reimbursement of salaries may not be treated as Fees for technical services (FTS). 15.4 In respons....
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.... secondees since secondees could not sue CIOP for default In payment of salary. and though i CIOP was given the right to terminate the secondment, but the original and subsisting relationship with overseas entity -whose regular employees they were, could not be terminated, (page 41 para 34) Whereas, during the period of service of the Serco India Employees with Serco India, It is the understanding between the Parties to this agreement that the Serco India Employee would be entitled to remuneration In foreign currency paid to them outside or India ("Foreign Currency Salary"); Whereas, the Parties to this Agreement have agreed to adduce into writing the terms and conditions that is governing their mutual relations referred to in this Agreement and also the arrangement whereby Serco India shall bear and pay for the Foreign Currency Salary of the Serco India Employees. 4 While CIOP may have operational control over these persons in terms of the daily work, and may be responsible (in terms of the agreement) for their failures, these limited and sparse factors cannot displace the larges and established context of employment abroad. (page 42 para 36). Para 3.2 For administr....
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....of service from all obligation and rights whatsoever, Including any lien on employment, if any, and from all actions, claims and demands towards Serco UK while they worked or will work as employees of Serco UK. Serco UK shall not enforce any kind of contractual obligation during the period of service of Serco India Employees as employees of Serco India. Source: All extracts are from "Salary Reimbursement Agreement between Serco Global Services Private Limited and Serco Limited UK dated 7 January 2010" 16.1 The Ld. DRP also observed as under : "That aforesaid agreement is also supported by a detailed employment contract setting out the terms of employment. The employment contract and salary reimbursement agreement when read together to point out, some kinds of distinction vis-a-vis the Centrica particularly that employees have been released from their work at Serco UK and subsequently entered into a separate local employment agreement with Serco India. But a cleverly drafted agreement that attempts to adhere with a letter but the spirit of the Centrica decision, would be a case of form overriding substance. Serco India has the right to terminate the employment of empl....
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....cting the Assessing Officer to disallow the reimbursement of salary expenses u/s 40(a)(i) of the Act, on the following reasons: (A) Reimbursement of salary cannot be disallowed u/s 40(a)(i) of the Act as the Assessee has already deducted TDS u/s 192 of the Act. (B) The Assessee was legal and economical employer of these employees. (C) The reimbursement of part salary expenses of expatriate employees to Serco UK did not fall under the purview of FTS. (D) The ratio of the decision in the case of Centrica India(supra) is not applicable in this case. (E) The disallowance u/s 40(a)(i) is against the 'rule of consistency'. 17.1 The Assessee further claimed that reimbursement of salary expenses cannot be disallowed under section 40(a)(i) of the Act as the Assessee has already deducted TDS under section 192 of the Act and therefore, the case of the Assessee does not fall under twin parameters set out in the provisions of section 40(a)(i) of the Act. In this regard, the Assessee relied upon various judgments including by the Hon'ble Calcutta High Court in the case of CIT Vs. S.K. Tekriwal (2014) 46 taxmann.com 444 (Cal) PB 688 to 689. 17.2 ....
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....Centrica judgment (supra), which is squarely applicable to the facts of the Assessee's case. Further, even the Hon'ble Apex Court in the case of C.C, CE & ST Vs. Northern Operating Systems Pvt. Ltd. (2022) 101 GSTR 391 (SC) Civil Appeal No. 2289 to 2293 of 2021 also dealt with the seconded employees and according to the judgement in that case, the case of the Assessee is also covered to be "Fees for Technical Services" provided. The Ld. DR before us also demonstrated the facts of Centrica (supra) and the Assessee's case, in order to show the similarity. 19. In rejoinder, the Assessee claimed that in the aforesaid cases, the Hon'ble Apex Court has not dealt with the issue relating to Income Tax Proceedings and infact, the judgments delivered by the Hon'ble Apex Court are on facts but not on law points, hence cannot be made applicable to the instant case in view of decision of the Hon'ble Apex Court in the case of Muthoot Leasing and Finance Ltd. v. Commissioner of Income-tax [2023] 146 taxmann.com 53 (SC) wherein it has been held as under: "18. Taxation depends upon the language of the charging section and what is brought to tax within the four corners of the charging se....
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....per para-3 of employment contract (pg. 476) (PB). d) Taxation: The emoluments/benefits mentioned herein will be liable/subject to tax in accordance with the provisions of Indian Income Tax and the Rules made thereunder, as may be in force from time to time. e) Notice period: Either party can terminate the employment by giving six months (employee/12 months (employer) notice, negotiable in both sides (i.e. either notice being served or salary payment in lieu of the notice period, paid). f) Responsibilities: The employee will be in full time employment of the company and will be obliged to devote entire time, attention and effort to the furtherance of the business of the company and to continuously develop professional skills in the interest of the company and himself. The employee (Mr. Bob) shall not during his employment with the company, directly or indirectly engaged himself in or devote any time or attention to any employment or business or possession of monetary interest, other than that of the company, except with prior permission of the company. g) Confidentiality: The Employee (Mr. Bob) shall not disclose or divulge any informatio....
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....ement have agreed to adduce into writing the terms and conditions that is governing their mutual relations referred to in this Agreement and also the arrangement whereby SERCO India shall bear and pay for the Foreign Currency Salary of the SERCO India Employees. .................. 3.1 In consideration for the employment services to be provided by the SERCO India Employees, SERCO India shall be solely responsible to pay salary and other costs such as housing, transport etc. of SERCO India Employees. 3.2 For administrative convenience only and at the request of SERCO India, SERCO UK agrees to pay to the SERCO India Employees the Foreign Currency Salary on behalf of SERCO India. For this purpose, SERCO India shall inform SERCO UK, the amount of the Foreign Currency Salary that should be paid by SERCO UK to the SERCO India Employees on behalf of SERCO India for their employment with SERCO India. ........................ 3.4 SERCO India agrees to reimburse SERCO UK such Foreign Currency Salary paid by SERCO UK on behalf of SERCO India subject to any requisite approval of the Government of India / Reserve Bank of India. The Foreign Currency Sa....
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....s laid down in Employment Contract of each SERCO India Employees with SERCO India. The terms of Employment Contract shall specifically include details with regard to terms of employment with SERCO India like period of service, nature of work, details of salary and other costs and such other terms as are customary. 4.12 SERCO UK shall not be responsible for the work of SERCO India Employees or assume any risk for the results produced from the work performed by the SERCO India Employees during the period of service with SERCO India. The SERCO India Employees shall not be regarded as employees of SERCO UK and shall also not in any way be subject to any kind of instructions or control of SERCO UK during the period of employment with SERCO India. 4.13 SERCO UK shall not have any obligation towards SERCO India with regard to the performance of SERCO India Employees. The obligation of SERCO UK would cease on entering of employment contract by the SERCO India Employees with SERCO India. 4.14 ......................SERCO UK shall not enforce any kind of contractual obligations during the period of service of SERCO India Employees as employees of Serco India. ....
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.... to act as per directions of the Assessee but not the Serco UK. The employees under consideration had employee-employer relationship with the Assessee only and therefore, these employees have no rights to act on behalf or bind Serco UK in connection with their duties in the Assessee. The Assessee was legal and economic employer of these employees. Accordingly, the payments made by the Assessee to the said employees as salary, partly by Assessee itself and remaining through Serco UK, which was subsequently reimbursed by the Assessee, was chargeable to tax as "salaries"in the hands of aforesaid employees but not as "FTS" because even otherwise there is no agreement and/or any document to show that the Serco UK, has provided any "Technical Service"and in consequence thereof the Assessee has paid FTS‟. Thus in our considered view, the Assessee has not paid for any FTS provided but infact paid the total amount as "salaries"and therefore correctly deducted tax at source (TDS) u/s 192 of the Act. 20.4 Let us also consider, as to whether the provisions of section 195 are applicable to the instant case or not. For completeness and better understanding, the provisions of section 195....
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....he provisions of section 40(a)(i) of the Act. 21.1 The Hon'ble tribunal in ACIT, Circle-1(1)(1), Bangaluru vs. AON Specialist Services (P.) Ltd. [2020] 116 taxmann.com 368 (Bangalore - Trib.) (PB-695 to 702)[Para 22 of the order] also dealt with the identical issue and held as under: In this case also the Assessee has reimbursed payment of salary of employees made by M/s AON Limited, UK and the Assessee had deducted tax at source on the salary expenses u/s 192 of the Act. According to the Assessing Officer, these payments were in the nature of Fees for Technical Service rendered and therefore, the Assessee ought to have deducted tax at source u/s 195 of the Act. Since, the Assessee did not deduct tax at source u/s 195, the AO disallowed the amount u/s 40(a)(i) of the Act. The DRP, however, deleted the addition made by the AO by following the decision of the Hon'ble ITAT in Assessee's own case in respect similar payments in ITO vs. AON Specialist Services (P.) Ltd. [2014] 43 taxmann.com 286 (Bangalore - Trib.) where it was held that the Assessee was real and economic employer of employees seconded from UK Company and reimbursement of salary cost etc. to UK company was wi....
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....cts as involved in this case, has held as under: "11. As far as disallowance under section 40(a)(ia) of the Act is concerned, this Court finds that there is no dispute that the Assessee has deducted tax at source under section 192 of the Act. This Court is in agreement with the opinion of the ITAT that Section 195 of the Act has no application, once the nature of payment is determined as salary and deduction has been made under section 192 of the Act." 21.3 The Hon'ble Courts in various cases including mentioned above, consciously held that even where tax has been deducted, under bona fide belief, under wrong provisions of TDS, the provisions of section 40(a)(i) cannot be invoked. Even if there is a difference of opinion as to the deductibility of TDS falling under different provisions, no disallowance can be made by invoking provisions of section 40(a)(i) of the Act. The Judgment passed by Calucutta High Court in the case of CIT vs. S. K. Tekriwal [2014] 46 taxmann.com 444 (Calcutta) (PB-688 to 689) is relevant on this issue, which has been subsequently followed by Hon'ble high Court of Delhi in the case of Pr. CIT vs. Future First Info. Services Private Limited [2022]....
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....he seconded employees were not only providing services to the Assessee and rather ensuring that skills set of other employees was built and these services may be continued by them without assistance. On these facts, the Hon'ble High Court was satisfied that the seconded employees were "making available" their experience and skill in managing and applying such processes and practices and therefore, the amount reimbursed by the Assessee to overseas companies towards salaries of seconded employees amounted to "fee for technical services" liable to tax in India. Accordingly, the Assessee was required to deduct tax at source u/s 195 of the Act on this amount. Whereas the Assessee is not a newly formed company and was in existence since 2006 and had large number of employees who were highly qualified personnel, having professional qualifications in the field of engineering and/or management, to render services to its AEs (as mentioned in page 22 of TPO order). It is also pertinent to note that Serco UK has relieved these seconded employees and Serco India has recruited them. The salaries, perquisites and other conditions of the employment were decided by the Assessee company wit....
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....ehalf of the Assessee and reimbursed by the Assessee. The Assessee has duly deducted tax u/s 192 of the Act. But the Assessing Officer treated these payments as FTS and since, the Assessee has not deducted tax u/s 195 of the Act, the Assessing Officer disallowed Rs. 1,85,20,176/- of reimbursement of salary u/s 40(a)(i) of the Act. The Hon'ble ITAT held as under: "12. Thus, keeping in view the discussions made above, in final analysis, we hold that the payment of Rs. 1,85,20,176/- made by the Assessee towards reimbursement of expenses is in the nature of salary cost of the assigned employees subject to TDS under section 192 of the Act, hence, cannot be treated as FTS under section 9(1)(vii) of the Act and Article 12 of the tax treaty. Accordingly, there was no obligation on the part of the Assessee to withhold tax at source under section 195 of the Act. Resultantly, we delete the addition made by the Assessing Officer. This ground is allowed." 22.1 The Assessee at last claimed that in above cases, the Ld. Assessing Officers have treated reimbursement of salary expenses to foreign company as FTS relying on the decision of Hon'ble Delhi High Court in the case of Centrica I....
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.... their technical know-how for future consumption. (Para 32 of judgment) The present case is not a case of initial support and appellant company already had plenty of local employees who were well qualified and possess the requisite knowledge to carry out their duties in India. (Reference: pages 21 & 22 of TPO order regarding "Employees Profile of the Assessee‟). The expatriate employees were employed for carrying on the routine business activities as CEO, CFO and HR Officer under the exclusive control and supervision of the Appellant company. They were not rendering any technical services. The expatriate employees were recruited by the appellant company to carry on routine business activities as its employees. Pay roll In this case, the seconded employees were not specifically taken into employment by the Indian company. The employees continued to remain on the payroll of the overseas entities who used to pay and disburse the salaries. (Para 4 of judgment) The expatriate employees were taken into employment and were on pay roll of the appellant company. The appellant was solely responsible to pay salary and other emoluments to these expatriate employees. (Para ....
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....riate employees on behalf of the appellant. Accordingly, SERCO UK paid part salary to these expatriate employees and thereafter the same would be reimbursed to Serco UK. Thus, SERCO UK was a conduit only to pay part of salary of appellant's employees and the money never accrued to SERCO UK. (Para 3.2 of Agreement) Chart Appellant - Northern Operating Systems Particulars Appellant- Serco India Pvt. Ltd Northern Operating Systems (P) Ltd 111Rs. 1 Release & recruitment In the instant case, the 'Salary Reimbursement Agreement' clearly states that the expatriate employees were released by the foreign company and recruited by the appellant company and would work exclusively for the appellate company. (Para 4.2 of the Agreement). Serco UK does not have any lien on employment of Serco India Employees. (Para 4.14 of the Agreement). The expatriate employees shall work under the exclusive direction and supervision of the appellant company during their employment in India. (Para 4.4 of Agreement) In this case, the seconded employees were not released by the foreign company during the period of secondment. Employment Contract The Assessee Serco In....
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.... Ld. DRP applied the case of Centrica India by observing as under: "But a cleverly drafted Agreement that attempts to adhere with the letter but not the spirit of the Centrica decision would be a case of form overriding substance". 22.5 We also observe that the Hon'ble Karnataka High Court in the case of M/s Flipkart Internet Private Limited V. DCIT (International Taxation), Bangalore [2022] 448 ITR 268 (Kar) has also considered the identical situation, wherein the Revenue has relied upon the judgment of the apex court in Centrica India Offshore (P.) Ltd (supra) and the Hon'ble High Court held as under: Distinguishing the Judgment in Centrica India Offshore (P.) Ltd. v. Commissioner of Income Tax-I, New Delhi 13 (i) The petitioner had challenged the order of the 'Authority for Advance Ruling' dated 14.03.2012 by virtue of which the Authority had held that the income accruing to the Overseas Entities in view of the existence of a Service Permanent Establishment (Service PE) in India and that tax was liable to be deducted under Section 195. (ii) The question referred for advance ruling was as to whether the reimbursements made by the pet....
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.....E. & S.T. v. Northern Operating Systems Pvt. Ltd. [2022] 101 GSTR 391 (SC) ; Civil Appeal Nos. 2289 to 2293 of 2021, and held that this judgment was rendered in the context of service tax and hence, not applicable for Income Tax Act to determine whether the payment made is for fees for included services, by holding as under: (viii) The Revenue has relied upon the judgment of the Apex Court in C.C., C.E. & S.T.-Bangalore (Adjudication) etc. v. M/s.Northern Operating Systems Pvt. Ltd.12 where the Apex Court has interpreted the concept of a secondment agreement taking note of the contemporary business practice and has indicated that the traditional control test to indicate who the employer is may not be the sole test to be applied. The Apex Court while construing a contract whereby employees were seconded to the Assessee by foreign group of Companies, had upheld the demand for service tax holding that in a secondment arrangement, a secondee would continue to be employed by the original employer. (ix) The Apex Court in the particular facts of the case had held that the Overseas Co., had a pool of highly skilled employees and having regard to their expertise were seco....
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....ination by us independently, we are of the considered view that the facts and issues involved in the cases of Centrica and Northern Operating Systems(supra) were altogether different and distinct from the facts and issues involved in the Assessee's case, as the Hon'ble Apex Court, in those cases dealt with different facts, issues and Acts and therefore dictum laid down in those case, is not applicable to the instant case. 22.9 We also observe that the CBDT, vide its Circular No. 720 dated 30-08-1995(PB-703) has clarified that payment of any sum, shall be liable for deduction of tax, only under one section and therefore are in concurrence with the Assessee to the effects that as the Assessee deducted TDS u/s 192 on such expenses debited as salaries paid to the ex-patriate employees and therefore in view of the above Circular No. 720, not liable to deduct the TDS under any other section. 22.10 We also observe as claimed by the Assessee and not refuted by the ld. DR that the Assessee company has also reimbursed the part salary expenses of the employees expatriate to Serco UK in previous as well as in subsequent years. For clarity and ready reference details are reproduced below:....