TaxTMI 
TaxTMI 
2026 (10) TMI 118
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....astened on the Appellant under 'Manpower Recruitment and Supply Agency Service' (MRAS, for short). 2. Ms. G. Vardini Karthik, Ld. Advocate appeared for the Appellant and submitted that the Appellant had entered into a Memorandum of Understanding (MOU) [dt. 21.04.2009] with M/s.Arai Seisakusho Co. Ltd., Japan [ARAI, Japan, for short] as per which the Expatriate was entitled to a salary of Rs.1.45 lakhs per month in addition to rent free accommodation and the said MOU contained various other clauses also. She would submit that the conditions of employment have been decided only by the Appellant, there was no involvement whatsoever of the foreign company, the employment visa of the Expatriate clearly reflected the name of the Appellant as h....
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....xpatriate was claimed to be an employee of ARAI, Japan. Referring to various other Articles of the MOU, Ms. Krupa would submit that the period of Expatriate's assignment to the Appellant was for a specific period, the duration of which could be altered in consultation with ARAI, Japan; there was an equal contribution of Rs.12,000/- to be paid by the Appellant as well as ARAI, Japan towards social security; that the Expatriate was entitled to paid leaves twice a year, the expenses of which were to be borne by the Appellant as well as ARAI, Japan alternatively. Referring to a letter dated 02.03.2012, she would contend that the duration of the Expatriate was unilaterally extended by ARAI, Japan which fact was never denied, nor disputed by the ....
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.... of assigning Mr. Daiki Ando, an employee of ARAI to HTA. For convenience, the same is reproduced herein below : "This Memorandum of Understanding is made and entered into on this 21st day of April, 2009 between Hi-Tech Arai Limited, No.2, V.P. Rathinasamy Nadar Road, North Chokkikulam, Madurai-625 014, India (hereinafter called "HTA") and Arai Seisakusho Co. Ltd., Antex 24 Bldg. 7F, 1-14, Taito 1-chome, Taito-ku, Tokyo, Japan (hereinafter called ("ARAI") for the purpose of assigning Mr. Daiki Ando, an employee of ARAI (hereinafter called 'Expatriate") to HTA." 6.1 Article 2 also indicates that the period of Expatriate's 'assignment' to HTA shall be from 1st June 2009 to the 30th May 2012. Further, Articles 3, 4, 6 & 7 clearly i....
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....oyer and the employee, a formal document in the nature of a MOU to send one of its employees for a short duration, on deputation, may not hence fit into the definition of 'employment'. 9. Further, the definition of 'Manpower Recruitment and Supply Service' depends on the nature of the activity carried out by the service provider and the relationship of such agency with the service recipient. The nature of the relationship between the Expatriate i.e. seconded employee and the service recipient is immaterial in as much as, none of the ingredients of the definitions under Section 65 (68) and 65 (105) (k) term on this fact. 10. The factual position that the TDS under Income Tax law was deducted by the service recipient out of the payments....
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....hority holds that the entire issue was unearthed by sustained investigation of the Department, to justify the imposition of penalty under Section 78. 14. The Appellant right from its reply to the SCN has been contending that there was a visit by Internal Audit Group of the Larger Tax Payer Unit, who, after scrutinizing the documents of the Appellant, had issued a notice, to which the Appellant filed its reply on 16.11.2012, which was apparently accepted by the Department without there being any further action or enquiry. We however, do not have the benefit of the said reply dt. 16.11.2012 and the contents of the same: we do not even know whether the Internal Group had raised the issue regarding tax liability of the Appellant for the serv....