DCIT, MUMBAI V. HSBC BANK PLC, LONDON

ITA 1538/MUM/2025

AI Insights

The case involves HSBC Bank PLC, a foreign company and tax resident of the United Kingdom, which appealed against the additions made by the Assessing Officer under the Income Tax Act, 1961, for the Assessment Year 2020-2021. The additions were related to reimbursements received from its Indian subsidiaries, HDPI and HSDI, which were initially taxed as Fees for Technical Services (FTS). The CIT(A) deleted these additions, leading to the Revenue's appeal to the Tribunal. The Tribunal, referencing previous decisions and similar cases, upheld the CIT(A)'s decision, emphasizing that the reimbursements were not income but mere cost recoveries.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708687 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2020-2021
• Other Referred Cases: DIT (IT) v. A P Moller Maersk AS, CIT v. Siemens Aktiongesellschaft
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Corroborative evidences; Double taxation relief
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No.1538/MUM/2025 (Assessment Year: 2020-2022) Deputy Commissioner of Income Tax, Mumbai Room No.606, Kautilya Bhavan, Bandra Kurla Complex, Mumbai - 400051, Maharashtra. …………. Appellant HSBC Bank PLC 8, Canada Square, London, UK, United Kingdom – 999999. [PAN:AABCH3252P] Vs …………. Respondent Appearance For the Appellant/ Department For the Respondent/Assessee : : Shri Krishna Kumar Shri Niraj Sheth Date Conclusion of hearing Pronouncement of order : : 01.07.2025 16.07.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal has been preferred by the Revenue against the Order, dated 31/12/2024, passed by the Commissioner of Income Tax (Appeals) – 56, Mumbai [hereinafter referred to as the ‘CIT(A)’], whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 11/10/2022, passed under Section 143(3) read with Section 144C(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2020-2021. 2. The Revenue has raised following grounds of appeal : “1. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition made ITA No.1538/Mum/2025 Assessment Year 2020-2021 2 by A.O. in the head of reimbursement of expenses of Rs.10,06,66,731/- received from HSBC Electronic Data Processing (India) Private Limited (HDPI) taxed as fees for technical services (FTS). 2. Whether, on the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition made by A.O. in the head of reimbursement of expenses of Rs.4,15,21,759/- received from HSBC Software Development (India) Private Limited (HSDI) taxed as FTS.” 3. The relevant facts in brief are that the Assessee is a foreign company incorporated in United Kingdom. The Assessee, a tax resident of United Kingdom, is engaged in providing banking and financial services worldwide. For the Assessment Year 2020-2021, Assessee filed return of income on 05/01/2021 which was revised on 31/05/2021. The case of the Assessee was selected for scrutiny. The Assessing Officer passed Draft Order under Section 143(3) read with Section 144C(1) of the Act on 12/09/2022 proposing (a) addition of INR.10,06,66,731/- in respect of amount received by the Assessee from HSBC Electronic Data Processing (India) Private Limited [for short ‘HDPI’] and (b) addition of INR.4,15,21,759/- in respect of amount received by the Assessee from HSBC Software Development (India) Private Limited [for short ‘HSDI’]. In response, the Assessee filed Letter, dated 26/09/2022, stating that the Assessee did not wish to file objections before DRP. Accordingly, the Assessing Officer passed the Final Assessment Order under Section 143(3) read with Section 144C(3) of the Act on 11/10/2022 by assessing the total income at INR.69,63,65,240/- after making the aforesaid proposed additions. Being aggrieved, the Assessee has preferred the appeal before the CIT(A). Vide Order, dated 31/12/2024, the CIT(A) deleted the additions made by the Assessing Officer by following the decisions of the Tribunal in the case of the Assessee for the Assessment Years 2008-2009 & 2010-2011 [ITA No.565/Mum/2020, ITA No.709/Mum/2020 & ITA No.708/Mum/2020, order dated 25/10/2021], Assessment Years 2011-2012 [ITA No.7386/Mum/2016, ITA No.1538/Mum/2025 Assessment Year 2020-2021 3 order dated 16/07/2019] and for the Assessment Year 2012-2013 & 2013-2014 [ITA No.6203&6202/Mum/2018, order dated 20/08/2021]. Being aggrieved, the Revenue has preferred the present appeal before the Tribunal on the grounds reproduced at Paragraph 2 above. Ground No.1 4. We would first take up Ground No.1 raised by the Assessee pertaining to addition made in respect of following payments aggregating to INR.10,06,66,731/- received by the Assessee from HDPI: Particulars Amount (INR.) Reimbursement of expenses on account of seconded employees 4,77,34,963 Reimbursement of expenses related to UK branch of HDPI 5,29,31,768 During the assessment proceedings the Assessee explained before the Assessing Officer that upon the requirements of HDPI, certain expatriate employees of HSBC group entities were deputed to HDPI. The said secondees worked under the supervision and control of HDPI. The salary of such employee was borne, incurred and paid by HDPI after deducting and depositing appropriate withholding tax to the Government treasury as per Section 192 of the Act. However, for administrative convenience, the social security benefits of such employees in home country [i.e. United Kingdom] such as statutory contribution to insurance fund, etc. were paid by the Assessee on behalf of HDPI and thereafter, the same were reimbursed by HDPI to the Assessee on a cost-to-cost basis without any mark-up. Further, in respect of reimbursement of expenses related to UK branch of HDPI amounting to INR.5,29,31,768/-, the Assessee explained that HDPI had a branch in United Kingdom and for administrative convenience, the expenses in relation to the said branch (such as salary cost of employees, infrastructure cost etc.) were incurred by the Assessee in United Kingdom and subsequently, HDPI reimbursed ITA No.1538/Mum/2025 Assessment Year 2020-2021 4 the said expenses to the Assessee on cost-to-cost basis without any mark-up or income element. The Assessing Officer treated the aforesaid amounts received by the Assessee from HDPI as income of the Assessee on the ground that the Assessee had failed to provide the details of the expenses reimbursed and the relevant supporting documents during the assessment proceedings. The CIT(A) deleted the addition by following the decisions of the Tribunal in the case of the Assessee. Being aggrieved, the Assessee has carried the issue in appeal before the Tribunal. 5. We have considered the rival submission and have perused the material on record in relation to this issue. We find that Ground No.1 raised in the present appeal is similar to Ground No.1 raised in appeal pertaining to Assessment Year 2011-2012. While disposing off the aforesaid appeal vide Order, dated 16/07/2019, passed in ITA No.7386/Mum/2016, the Co-Ordinate Bench of the Tribunal had held that similar payments received by the Assessee from HDPI were in the nature of reimbursement of expenses and the same were not liable to tax in the hands of the Assessee in absence of any element of profit. The relevant extract of the aforesaid decision of the Tribunal reads as under: “4. Ground of appeal no. 1 pertains to the action of Assessing Officer as well as CIT(A) in treating the reimbursement of expenses incurred by the assessee on behalf of HSBC Electronic Data Processing India Private Limited (HDPI) as taxable in the hands of the assessee. The assessee has submitted that the payment received by it from HDPI is mere cost reimbursement towards payments made by the assessee. The same do not represent the assessee's income and has no nexus to the IT enabled services being provided by the assessee to HDPI. In order to support its claim, the assessee filed sample copies of the invoices raised by the assessee on HDPI's UK Branch which pertains to cost reimbursements (i.e. reimbursement of payroll, rent, other miscellaneous expenses) and invoices raised by the assessee on HDPI for social security related payments of the seconded employee. Such reimbursement of expenses has no nexus with the IT related ITA No.1538/Mum/2025 Assessment Year 2020-2021 5 services rendered by the assessee to HDPI, which has been taxed in the hands of the assessee. 5. Before us, Learned Representative for the assessee referred to the documentation in respect of reimbursement of expenses, and also produced before us samples of supporting evidences in respect of each claim of reimbursement of expenses. He urged us to delete the disallowance made by the lower authorities by noting that the reimbursement of expenses received by the assessee, particularly on the facts of the case, cannot be treated as income in the hands of the assessee. In support of his contentions, the Learned Representative relied on the following judgments: (i) DIT (IT) v. A P Moller Maersk AS, 392 ITR 186 (SC) (ii) CIT v. Siemens Aktiongeselschaft, 310 ITR 320 (Bom) 6. The Ld. DR appearing for the Revenue, on the other hand, relied upon the orders of the authorities below and submitted that the onus is on the assessee to produce all the evidences of expenditure and that this onus is clearly not discharged by the assessee. 7. We have carefully considered the rival submissions and perused the material on record. We are inclined to uphold the grievance of the assessee. The reimbursement received by the assessee are in respect of specific and actual expenses incurred by the assessee and do not involve any mark-up and the assessee has furnished sufficient evidence to demonstrate the incurring of said expenses. There is thus, no good reason to make any addition to the income in respect of the reimbursement of expenses. The action of the CIT(A), as the Learned Representative rightly contends, is based on pure surmises and conjectures. 8. Here, we would also like to refer to the judgment of A P Moller Maersk AS (supra). In that case, issue related to a foreign company engaged in shipping business, which was a tax resident of Denmark; that it had agents working for it who booked cargo and acted as clearing agents for the assessee; and, that in order to help all its agents across the globe, the assessee had set up and maintained a global telecommunication facility called Maersk net system which was a vertically integrated communication system. The agents would pay for the usage of system on a pro-rata basis. According to the assessee, it was merely a system of cost sharing and the payments received by the assessee from its ITA No.1538/Mum/2025 Assessment Year 2020-2021 6 agents in India were in the nature of reimbursement of expenses. The Assessing Officer, however, did not accept this contention and held that the amounts paid by the three agents to the assessee were in the nature of 'Fees for Technical Services' liable to tax in India under Article 13(4) of the Double Taxation Avoidance Agreement between India and Denmark; and, accordingly taxed it at 20% as per Section 115A of the Act. The Tribunal accepted the plea of the assessee and the Hon'ble High Court dismissed the Department's appeal holding that the Tribunal had rightly observed that the Maersk-net- communication-system was an automated software based communication system which did not require the assessee to render any technical services; that it was merely a cost sharing arrangement between the assessee and its agents to efficiently conduct its shipping business; and, that it was a part of the shipping business and could not be captured under any other provisions except under the DTAA. The Hon'ble High Court, dismissing the appeal of the Department, held as under: \"....... the facts that the assessee had its information technology system, that the assessee had appointed agents in various countries for booking of cargo and servicing customers in those countries, preparing documentation, etc., through these agents, that for the sake of convenience of all these agents, a centralised system was maintained to avoid unnecessary cost, that the system comprised booking and communication software, hardware and a data communications network and was, thus, an integral part of the international shipping business of the assessee and ran on a combination of mainframe and non-mainframe servers located in Denmark, that the expenditure incurred for running this business was shared by all the agents and that the systems enabled the agents to co-ordinate cargos and ports of call for its fleet were findings of fact. Once these were accepted, by no stretch of imagination, could the payments made by the agents be treated as fees for technical services. The payments were in the nature of reimbursement of cost whereby the three agents paid their proportionate share of the expenses incurred on these said systems and for maintaining those systems. Neither the Assessing Officer nor the Commissioner (Appeals) had stated that there was any profit element embedded in the payments received by the assessee from its agents in India. Once the character of the payment was in the nature of reimbursement of ITA No.1538/Mum/2025 Assessment Year 2020-2021 7 the expenses, it could not be income chargeable to tax. Moreover, freight income generated by the assessee in the assessment years in question was accepted as not chargeable to tax as it arose from the operation of ships in international waters in terms of article 9 of the DTAA. Once that was accepted and it was also found that the Maersk net system was an integral part of the shipping business which was allowed to be used by the agents of the assessee as well in order to enable them to discharge their role more effectively as agents, and the business could not be conducted without it, it could not be treated as any technical services provided to the agents.\" 9. Quite clearly, payments by way of reimbursement of expenses incurred on behalf of the payer cannot be construed as income chargeable to tax in the hands of the payee, a proposition which is approved by the Hon'ble Bombay High Court in the case of Siemens Aktiongesellschaft (supra). In view of the above discussion, we direct the Assessing Officer to delete the disallowance of expenses sustained by the CIT(A) and hold that no part of reimbursement of expenses received by the assessee on the facts of this case be treated as income of the assessee. The assessee succeeds accordingly on this Ground of appeal.” (Emphasis Supplied) 6. The above decision was followed by the Tribunal while deciding identical issues raised in appeal for the Assessment Year 2012- 2013 and 2013-2014 vide Common Order, dated 20/08/2021, passed in the case of the Assessee in ITA Nos. 6203 & 6202/Mum/2018. The relevant extract of the aforesaid Common Order, dated 20/08/2021, reads as under: “19. Before us, learned counsel for the assessee submitted, in the year under consideration the assessee has received an amount of Rs.18,87,443/- from HSBC Electronic Data Processing India Pvt. Ltd (HDPI) towards recovery of expenses and further an amount of Rs.1,92,15,774/- from HSBC Software and Development India Pvt. Ltd. towards reimbursement of expenses. 20. Drawing our attention to various documentary evidences placed in the paper book, learned counsel for the assessee ITA No.1538/Mum/2025 Assessment Year 2020-2021 8 submitted that in course of assessment proceedings, the assessee, in compliance with the query raised by the assessing officer had furnished all documentary evidences relating to the reimbursement of expenses. He submitted, since the reimbursement of expenses is on actual basis without any mark up, they cannot be treated as FTS. 21. The learned departmental representative relied upon the observation of the assessing officer. 22. We have considered rival submissions and perused materials on record. As could be seen from the facts on record, the assessee received an amount of Rs.18,87,443/- towards expenditure incurred for pay roll, rent for premises and other miscellaneous expenses on behalf of HDPI's branch in UK. It is evident, the expenditure incurred was recovered from HDPI's UK branch on cost to cost basis. Nothing has been brought on record by the assessing officer to show that the amount received by the assessee also includes mark up and not on cost to cost basis. Further, the allegation of departmental authorities that necessary evidences were not furnished, is found unsubstantiated. As regards the amount of Rs.1,92,15,774/-, it is noticed that the assessee has provided certain services to group companies. However, such services cannot be said to be in connection with information technology related services. The observations of the departmental authorities that it is in the nature of FTS are more on presumption and surmises, rather, on substantive basis. Further, the allegation of the departmental authorities that necessary documentary evidences have not been furnished is not borne out from the records. Pertinently, while deciding identical issue in assessee’s own case in assessment year 2011-12, the Tribunal, in the order referred to above, has deleted the addition holding as under:- “7. xx. 8. xx 9. Quite clearly, payments by way of reimbursement of expenses incurred on behalf of the payer cannot be construed as income chargeable to tax in the hands of the payee, a proposition which is approved by the Hon'ble Bombay High Court in the case of Siemens Aktiongesellschaft (supra). In view of the above discussion, we direct the Assessing Officer to delete the disallowance of ITA No.1538/Mum/2025 Assessment Year 2020-2021 9 expenses sustained by the CIT(A) and hold that no part of reimbursement of expenses received by the assessee on the facts of this case be treated as income of the assessee. The assessee succeeds accordingly on this Ground of appeal.\" 23. Facts being identical, respectfully following the aforesaid decision of the co-ordinate bench, we delete the addition made by the assessing officer.” (Emphasis Supplied) Thus, we find that vide Common Order, dated 20/08/2021, passed in ITA Nos. 6203 & 6202/Mum/2018 in the case of the Assessee in appeal pertaining to the Assessment Years 2012-2013 & 2013-2014, we find that payments towards reimbursement of payroll, rent and other miscellaneous expenses incurred by the Assessee on behalf of HDPI's branch in United Kingdom were held to be not taxable in the hands of the Assessee since the same did not carry any mark-up. We find that the identical reasoning given by the Assessing Officer in the said assessment years for making the additions was rejected by the Tribunal. 7. Both the above decisions were relied upon by the Tribunal while dismissing Ground No. 1 to 3 raised by the Revenue in ITA No.709 & 708/Mum/2020 for Assessment Year 2008-09 and 2010-11, respectively, vide Common Order, dated 25/10/2021. Ground No. 1 to 3 raised by the Revenue in the aforesaid appeals read as under: \"1. Whether on the facts and in the circumstances of the case, Ld. CIT(A) has erred in holding that the receipts amounting to Rs.4,41,05,261/- received by the assessee from M/s HSBC Electronics Data Processing (India) Pvt. Ltd. (HDPI) is in the nature of reimbursement and not Fees for Technical Services (FTS) ignoring the fact that, the assessee has failed to satisfactorily discharge its onus of proving the nature of alleged transaction as reimbursement? 2. Whether on the facts and in the circumstances of the case, the Ld. CITCA) was justified in deciding the issue in favour of the assessee by solely relying on the decision of Hon'ble ITAT for ITA No.1538/Mum/2025 Assessment Year 2020-2021 10 AY 2011-12 in assessee's own case, ignoring the fact that the Hon'ble ITAT relied on the Judgement of Bombay High Court in the case of CIT v. Siemens Aktiongeselschaft, 310 ITR 320 (Bom) to adjudicate the matter in favour of assessee, without appreciating the fact that, in the relied upon case the nature of transaction was ascertained as reimbursement of expenses without any profit element, whereas, in the instant case the assessee failed to distinguish payments received from HDPI for providing FTS and those it claimed as reimbursement of expenses. 3. Whether on the facts and in the circumstances of the case, Ld. CIT(A) has erred in holding that the receipts amounting to Rs.4,41,05,261/- received by assessee from HSBC Electronics Data Processing (India) Pvt. Ltd. (HDPI) is in the nature of reimbursement and not Fees for Technical Services (FTS) ignoring the fact that, in the same order the Ld. CIT(A) adjudicated that reimbursement of expenses amounting to Rs. 2,65,51,508/- received by the Appellant from HSBC Software Development (India) Pvt. Ltd. (HSDI) are in the nature of FTS thereby upholding the addition made by the AO even though the nature of the receipts from HDPI and HSDI are of similar nature.?\" 8. The Tribunal dismissed the above grounds holding as under: “3. Brief facts are that the assessee is a company incorporated in United Kingdom and is a tax resident of UK and does not have any office or place in India. The assessee provides various banking and financial services worldwide. The Assessing Officer during the course of assessment proceedings noted that the assessee has received a sum of INR.4,41,05,261/- from HSBC Electronics Data Processing (India) Pvt. Ltd. (in short 'HDPI') and required the assessee as to why the same should not considered as FTS under section 9(1)(vii) of the Act. The assessee replied that these are reimbursement receipts from HSBC Electronic Data Processing (1) Pvt. Ltd. on account of seconded employee to HDPI, UK Branch in UK. It was contended that for administrative convenience, HBP paid an amount of INR.47,105,261/- on behalf of HDPI towards payroll and Seconded employees related cost and subsequently this amount was reimbursed to the assessee on cost to cost basis without any markup or profit. The Assessing Officer treated this as fee for technical services and taxed accordingly. Aggrieved, assessee preferred the appeal before Commissioner of Income Tax (Appeals). The CIT(A) following ITA No.1538/Mum/2025 Assessment Year 2020-2021 11 the Tribunals order for Assessment Year 2011-12 deleted the addition. Aggrieved, now Revenue is in appeal before Tribunal. 4. At the outset, the learned Counsel for the assessee stated that this issue is exactly covered in assessee's own case by Tribunals order in ITA No. 7386/Mum/2016 for Assessment Year 2011-12 vide order dated 16/07/2019, which was subsequently followed in ITA No.6203 and 6202/Mum/2018 for Assessment Years 2012-13 and 2013-14 vide order dated 20/08/2021, wherein Tribunal exactly on identical facts held as under:- \"7. We have carefully … 8. xx 9. Quite clearly, payments by way of reimbursement of expenses incurred on behalf of the payer cannot be construed as income chargeable to tax in the hands of the payee, a proposition which is approved by the Hon'ble Bombay High Court in the case of Siemens Aktiongesellschaft (supra). In view of the above discussion, we direct the Assessing Officer to delete the disallowance of expenses sustained by the CIT(A) and hold that no part of reimbursement of expenses received by the assessee on the facts of this case be treated as income of the assessee. The assessee succeeds accordingly on this Ground of appeal.\" 5. The learned Sr. Departmental Representative however relied on the orders of the lower authorities but admitted that Tribunal has adjudicated this issue in favour of the assessee and facts are also identical. 6. We noted that the Tribunal has consistently held that the payments by way of reimbursement of expenses incurred on behalf of the payer cannot be construed as income chargeable to tax in the hands of the payee. We noted that the facts are exactly identical what was before Tribunal in AY 2011-12. Even otherwise, we find that this issue is squarely covered by Bombay High Court decision in the case of CIT vs. Siemens Aktingesellschaft [2009] 310 ITR 320 (Bombay). Hence, we confirm the order of CIT(A) deleting the disallowance. This common issue of both the appeals of Revenue in ITA No.708 & 709/Mum/2020 for AYs 2010-11, 2008-09 is dismissed ”. 9. Thus, we note that the Tribunal has consistently held in the case of ITA No.1538/Mum/2025 Assessment Year 2020-2021 12 the Assessee that payments by way of reimbursement of expenses received by the Assessee were from HDPI in identical facts and circumstance were not liable to tax in the hands of the Assessee. We find that the Revenue has failed to bring on record any facts to persuade us to take a different view of the matter. Therefore, we do not find any infirmity in the order passed by the CIT(A) deleting the addition. Thus, respectfully following the above decisions of the Tribunal in the case of the Assessee, we confirm the order of the CIT(A) deleting the addition of INR.10,06,66,731/- made by the Assessing Officer in respect of payments towards reimbursement of expenses received by the Assessee from HDPI. Accordingly, Ground No.1 raised by the Revenue is dismissed. Ground No. 2 10. We would next take up Ground No.2 raised by the Assessee pertaining to addition made in respect of the payment of INR.4,15,21,759/- received from HSDI. During the year under consideration, the Assessee has received reimbursement of expenses on account of seconded employees from HSDI amounting to Rs. 4,15,21,759. The Assessing Officer treated the same as income of the Assessee. In appeal, the CIT(A) deleted the addition and therefore, the Revenue has carried the issue in appeal before the Tribunal. 11. We have considered the rival submission and have perused the material on record in relation to this issue. On perusal of record we find that the payments received by the Assessee could be classified into two categories (i) reimbursement of social security benefit expenses incurred by the Assessee in United Kingdom in respect of employees secondees to HDPI/HSDI on cost to cost basis (ii) reimbursement of expenses incurred by the Assessee in respect of United Kingdom branch of HDPI which included salary/infrastructure ITA No.1538/Mum/2025 Assessment Year 2020-2021 13 cost initially incurred by the Assessee which was subsequently reimbursed by HDPI on cost to cost basis. While adjudicating Ground No.1, we have already concluded hereinabove that reimbursement of social security benefit expenses received by the Assessee which was received from HDPI on cost to cost basis could not be treated as income of the Assessee. Accordingly, adopting the same reasoning we hold that identical payments received by the Assessee from HSDI are also not liable to tax in the hands of the Assessee. In this regard, we note that the Tribunal had, in ITA No.709/Mum/2020 and ITA No.708/Mum/2020 pertaining to Assessment Year 2008-2009 and 2010-2011, respectively, rejected identical grounds raised by the Revenue vide Common Order dated 25/10/2021 holding as under: “16. We have heard rival contentions and gone through the facts and circumstances of the case. We noted that the facts and circumstances and nature of payment is similar to the first issue of Revenue’s appeal i.e. the receipts received by assessee from HSBC Electronic Data Processing (India) Pvt. Ltd., which is in the nature of reimbursement and not fee for technical services. Even at the first instance the assessee paid an aggregating amount of Rs.2,65,51,508/- on behalf of HSDI towards certain expenses such as salary and other cost. This amount was reimbursed by HSDI to the assessee on cost to cost basis and without any mark up or profit. Hence, this issue is also covered in terms Para 6 above of this order given in respect to first ground of Revenue’s appeal. Hence, this issue of assessee’s appeal is allowed. 17. In the result, the appeal of the assessee is allowed and the appeals of Revenue are dismissed.” (Emphasis Supplied) 12. In view of the above, we do not find any infirmity in the order passed by the CIT(A) deleting the addition of INR.4,15,21,759/- made by the Assessing Officer in respect of payments towards reimbursement of expenses received by the Assessee from HSDI. Thus, respectfully following the above decisions of the Tribunal in the case of the Assessee, we dismiss Ground No.1 raised by the ITA No.1538/Mum/2025 Assessment Year 2020-2021 14 Revenue. 13. In result, the present appeal preferred by the Revenue is dismissed. Order pronounced on 16.07.2025. Sd/- Sd/- (Vikram Singh Yadav) Accountant Member (Rahul Chaudhary) Judicial Member मुंबई Mumbai; िदनांक Dated : 16.07.2025 Milan,LDC ITA No.1538/Mum/2025 Assessment Year 2020-2021 15 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. आयकर आयुƅ/ The CIT 4. Ůधान आयकर आयुƅ / Pr.CIT 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण ,मुंबई / DR, ITAT, Mumbai 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai "