DCIT, New Delhi V. M/s. EPC Global India Pvt. Ltd., New Delhi

ITA 4526/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82005 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 30-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI GEORGE GEORGE K , J.M. ITA NO: 4 526 /DEL/20 13 AY : - 20 07 - 08 DY.CIT, CIRCLE 11(1) VS. EPC GLOBAL INDIA PVT.LTD. ROOM NO.312 1, OKHLA CENTRE, BLOCK A, C.R.BLDG., IP ESTATE, DELOITTE HASKIN & SELLS NEW DELHI MCT HOUSE, OKHLA INSTITUTIONAL AREA NEW DELHI PAN: AABCE 6056 E (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.PARWINDER KAUR, SR. D.R RESPONDENT B Y : DR.RAKESH GUPTA, ADV. SHRI ASHWANI TANEJA, ADV. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER DATED 27.5.2013 OF LD.CIT(APPEALS) - XIII, NEW DELHI PERTAINING TO THE AY 2007 - 08 ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.63,77,101/ - MADE U/S 40(A)(I) OF THE ACT. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 2. FACTS IN BRIEF: - THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING MANPOWER SOLUTIONS TO ITS CLIENTS BASED IN INDIA AND ABROAD BY PLACING PROFESSIONALS ON DIFFERENT LOCATIONS ON PERMANENT AND TEMPORARY B ASIS. DURING THE YEAR , THE ASSESSEE COMPANY HAS CLAIMED SALARY EXPENSES OF RS.63,77,101/ - PAID TO SHRI ANDREW ROY BROWN. THIS SALARY WAS PAID BY TALASCEND LTD. T O MR.ANDREW ROY BROWN AND THE ASSESSEE RE - IMBURSED THIS ITA NO. 4526/DEL/2013 AY: 2007 - 08 EPC GLOBAL INDIA PVT.LTD. 2 AMOUNT T O TALASCEND LTD. IN THE ASSESSMENT ORDER, THE AO HELD THAT SALARY PAID TO MR.ANDREW ROY BROWN IS INCOME DEEM ED TO ACCRUE OR ARISE IN INDIA TO MR.ANDREW ROY BROWN AND, THEREFORE, THE SAME IS TAXABLE IN INDIA. THE AO FURTHER HELD THAT SINCE SALARY HAS BEEN PAID WITHOUT DEDUCTIN G TDS, THE SAME WAS TO BE DISALLOWED U/S 40(A)(I) OF THE ACT. 3. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS ARRIVED AT THE FOLLOWING FACTUAL CONCLUSIONS. ( A ) THE ASSESSEE HAS NEVER PAID ANY SALARY DIRECTLY TO MR. ANDREW ROY BROWN . THE AMOUNT WAS REIMBURSED TO M/S TALASCEND LTD., WHO HAVE IN TURN PAID SALARY TO MR. ANDREW ROY BROWN . HENCE THE PROVISIONS OF S.192(2) ARE NOT APPLICABLE. ( B ) REIMBURSEMENT ON ACTUAL EXPENDITURE DOES NOT ATTRACT PROVISIONS OF TDS. FOR THIS PRO POSITION THE LD.CIT(A) PLACED RELIANCE ON THE JUDGEMENT OF HON BLE BOMBAY HIGH COURT IN CIT VS. INFORMATION ARCHITECT (2010) 322 ITR 001 (BOMBAY). 3. 1 . WE DO NOT FIND ANY INFIRMITY IN THESE FINDINGS OF THE LD.CIT(A). EVEN OTHERWISE SALARY PAYMENTS ARE COVERED U/S 192 OF THE ACT . S.40(A)(I) ARE NOT APPLICABLE TO THE PAYMENTS MADE U/S 192 OF THE ACT. HENCE THE ORDER OF THE LD.CIT(A) HAS TO BE UPHELD ON THIS GROUND ALSO. 4 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH NOVEMBER ,2014. SD/ - SD/ - ( GEORGE GEORGE K ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 19 TH NOVEMBER , ,2014 *MANGA ITA NO. 4526/DEL/2013 AY: 2007 - 08 EPC GLOBAL INDIA PVT.LTD. 3 COPY OF THE ORDER FO RWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR