TaxTMI 
TaxTMI 
2026 (4) TMI 1552
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....14 and 13.04.2015 for A.Ys. 2009-10 and 2010-11. 2. The assessee has raised common grounds in both these appeals and the only difference is in the amount involved. In ITA No. 2992/Del/2016 which is taken as the lead case, the assessee has raised the following grounds: "1. Whether on the facts and in the circumstances of the case, the Id. CIT (A) has erred in upholding the assessment of Rs 4,59,28,842/- as FTS (fee for technical services) taxed @ 10% on gross basis, which was paid / reimbursed by the Appellant to its Head Office in Australia on account of the time input by their staff from Australia? 2. Whether on the facts and in the circumstances of the case, the Id. CIT (A) has erred in law in treating the reimburseme....
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.... receipts had already been offered to tax under section 44DA of the Act and any addition made on account of any application of such income would only amount to double taxation". Additional Ground No. 6: "That the assessment order dated 04.03.2014 is non-est having been passed in gross violation of provisions of section 144C of the Act." Additional Ground No. 7: "That the AO/ CIT(A) grossly erred in taxing payments received by the HO of the Appellant from the PO of the Appellant in complete ignorance of the fact that reimbursement of expenses to HO could not give any rise to any income notwithstanding that payment to self also does not give rise to any income". 3.1 After hearing both the parties, we are....
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....received by the HO was fee for technical services (FTS) as per provisions of Act as well as the DTAA and the same was held to be taxable in the hands of the HO. 4.3 Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). Vide order dated 28.03.2016, Ld. CIT(A) upheld the action of the AO. Further aggrieved, the assessee is in appeal before the Tribunal. 5. Before us ld. AR has submitted that although total 7 grounds have been raised, the two additional legal grounds No. 5 & 6 are being taken up first without prejudice to the other grounds. Ground No. 5: Addition of Rs. 4,59,28,842/-:- amounts to double taxation as total receipts have already been taxed u/s. 44DA. Ground No. 7: Reimbursement of expenses to HO could not....
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....missible in law. (ii)......... Additional Ground No.7 (a) As stated in para 2 and 3 above, it is an admitted position that the AO/ CIT(A) have brought to tax payments in the hands of the HO of the Appellant located in Australia, which have been received from the PE/ PO of the Appellant in India on a cost-to-cost basis. Therefore, the said payment has been undertaken by different parts of the same entity. (b) Special Bench of this Hon'ble Tribunal in Sumitomo Mitsui Banking Corpn. v. DDIT, (2012) 16 ITR(T) 116 (Mumbai), while dealing with the issue of payment of interest from the Indian Branch Office / PE of the nonresident to its HO [or as referred to in the judgment as General Enterprise ("GE")] has held....
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....ell, the amount being subjected to tax by the AO/ CIT(A) in the hands of the HO of the Appellant, has been paid by the PO/ PE of the Appellant in India and therefore, such an internal charge within the Appellant company, irrespective of its nature and characterization, cannot give rise to any income in the hands of the Appellant." 7. Ld. DR on the other hand has strongly relied on the orders of the lower authorities. He has submitted that the ld. CIT(A) has rightly held the impugned payments as FTS in the hands of the HO. 8. We have heard the rival submissions and perused the material placed on record as well the relevant judicial citations. The sole issue for consideration is whether the payment by the BO to the HO in the instant cas....