Levy of penalty: ITAT ruled in favor of assessees on taxability of secondment receipts, citing bonafide belief & full disclosure.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The case involved a dispute over the taxability of reimbursement of salary expenses of seconded employees as Fees for Technical Services (FTS) and levy of penalty u/s 271(1)(c) or 270A. The Appellate Tribunal found that the Assessee had a bonafide belief regarding the taxability of the receipts and eventually offered them for taxation. The Tribunal referred to a judgment stating that such reimbursements are not liable to tax deduction at source. The Assessee had disclosed the receipts in Form 3CB and provided explanations to lower authorities. The Tribunal held that there was no concealment of income and no penalty should be levied u/s 271(1)(c) or 270A. The penalty was deleted in favor of the Assessee.....