ACIT, Circle-8(2), Kolkata, Kolkata V. M/s. Nissin ABC Logistic Pvt. Ltd., Kolkata

ITA 641/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8800 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Keywords: Residential status; Services rendered outside India; Deemed to accrue or arise in india; Permanent establishment; TDS; Set aside
• Section: 5(2); 40(a)(ia)

Judgement Text

1 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 641/KOL/2017 ASSESSMENT YEAR: 2010-11 ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-8(2), KOLKATA. VS. M/S. NISSIN ABC LOGISTIC PVT. LTD. (PAN: AABCN0379D) APPELLANT RESPONDENT DATE OF HEARING 15.01.2019 DATE OF PRONOUNCEMENT 05.04.2019 FOR THE APPELLANT SHRI C. J. SINGH, JCIT, SR. DR FOR THE RESPONDENT S/SHRI S. K. AGARWAL, FCA, AVISE KH KEJRIWAL, FCA & ABHISHEK SUREKA, FCA ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-12, KOLKATA DATED 09.01.2017 FOR AY 2010-11. 2. THE FIRST GROUND OF APPEAL OF THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS.1,68,44,535/- MADE BY AO U/S. 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. BRIEF FACTS OF THE CASE AS NOTED BY THE AO ARE THAT WHILE PERUSING THE RECORD OF THE ASSESSEE, HE NOTED THAT THE ASSESSEE HAS PAID RS.4, 75,46,569/- ON ACCOUNT OF OCEAN FREIGHT. SO, HE ASKED THE ASSESSEE TO GIVE DETAILS OF THE OC EAN FREIGHT PAYMENT AND ALSO TO SHOW THE TDS COMPLIANCE. PURSUANT TO THE QUERY RAISED BY TH E AO, THE ASSESSEE FILED DETAILED SUBMISSION FROM WHICH THE AO WAS OF THE OPINION THA T ASSESSEE HAS NOT DEDUCTED TDS ON THE EXPENSES AMOUNTING TO RS.3,07,54,392/- TOWARDS OCEAN FREIGHT PAYMENT. WHEN ASKED BY THE AO AS TO WHY TDS HAS NOT BEEN DEDUCTED, THE ASS ESSEE SUBMITTED THAT IT IS NOT LIABLE TO DEDUCT TDS SINCE SEC. 172 OF THE ACT APPLIES. SO, THE AO ASKED THE ASSESSEE TO PRODUCE EVIDENCE TO PROVE THAT THE PARTIES TO WHOM PAYMENTS WERE MADE BY THE ASSESSEE WERE 2 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 SHIPPING AGENT OF ANY NON-RESIDENT SHIP OWNERS OR C HARTERS IN RESPECT TO WHICH PROVISION OF SEC. 172 OF THE ACT APPLIES. ACCORDING TO AO, SINC E NO EVIDENCE WAS SUBMITTED BEFORE HIM, HE DISALLOWED RS.3,07,54,392/- U/S. 40(A)(IA) OF TH E ACT. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO AL LOW THE SAME. AGGRIEVED BY THE DECISION OF THE LD. CIT(A) THE REVENUE IS BEFORE US . 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US THE LD. AR SUBMITTED THAT THE AMOUN T OF RS.3,07,54,392/- INCLUDES AN AMOUNT OF RS.1,68,44,535/- WHICH WAS GIVEN TO FOREI GN COMPANIES FOR EXPORT CONSIGNMENTS/OFF-SHORE ACTIVITIES. WE NOTE THAT TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING LOGISTIC SERVICES BOTH IN INDIA AND OUTSI DE INDIA AND IS A JOINT VENTURE COMPANY BETWEEN NISSIN CORPORATION, JAPAN AND ABC (INDIA) L TD. AND OTHER GROUP COMPANIES. FOR THE SERVICES PROVIDED OUTSIDE INDIA, LOGISTIC SERVI CES TILL THE FOREIGN PORT ARE RENDERED BY THE ASSESSEE, HOWEVER, FROM THE FOREIGN PORT, THE LOGIS TICS SERVICES ARE UNDERTAKEN BY THE FOREIGN PARTIES. THE MODUS OPERANDI ADOPTED BY THE ASSESSEE AND FOREIGN COMPANIES CAN BE BETTER UNDERSTOOD AS EXPLAINED BELOW. (I) CONSIGNMENT ORIGINATING IN INDIA TO BE DELIVERE D TO A DESTINATION OUTSIDE INDIA THE SUBJECT SERVICE CAN BE BROADLY DIVIDED INTO TWO PARTS - (1) SERVICES FROM THE CUSTOMER'S PREMISES TO THE IN DIAN PORT/LOADING IN SHIP - RENDERED BY THE ASSESSEE. (2) SERVICES FROM THE DESTINATION PORT TO THE DELIV ERY POINT OUTSIDE INDIA - RENDERED BY THE NON-RESIDENT GROUP COMPANIES OF THE ASSESSEE , ACTIVITIES CARRIED ON OUTSIDE INDIA. IN THIS CASE, THE NON-RESIDENT COMPANY RAISES AN IN VOICE ON THE ASSESSEE FOR REIMBURSEMENT OF EXPENSES INCURRED ON BEHALF OF THE ASSESSEE AFTER THE CONSIGNMENT REACHES THE DESTINATION PORT OUTSIDE INDIA. SUCH EX PENSES, INCURRED AT PORTS OUTSIDE INDIA, ARE PRIMARILY ON ACCOUNT OF CUSTOMS CLEARANC E FEE, HANDLING CHARGE, TRUCKAGE, 3 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 TERMINAL CHARGE, CONSUMPTION TAX, INSPECTION CHARGE , SERVICE CHARGE, BANK CHARGES, ETC. CONSIGNMENT ORIGINATING OUTSIDE INDIA TO BE DELIVER ED TO INDIA THE SUBJECT SERVICE CAN BE BROADLY DIVIDED INTO TWO PARTS - (1) SERVICES FROM THE FOREIGN CUSTOMERS PREMISES TO TH E FOREIGN PORT/LOADING IN SHIP RENDERED BY GROUP COMPANIES OF THE ASSESSEE OUTSI DE INDIA. (2) SERVICES FROM THE INDIAN PORT TO THE DELIVERY POINT IN INDIA - RENDERED BY THE ASSESSEE IN INDIA. IN THIS CASE, THE NON-RESIDENT COMPANY RAISES AN IN VOICE ON THE ASSESSEE FOR REIMBURSEMENT OF EXPENSES INCURRED ON BEHALF OF THE ASSESSEE AT THE ORIGIN PORT OUTSIDE INDIA. SUCH EXPENSES, INCURRED AT PORTS OUT SIDE INDIA, ARE PRIMARILY ON ACCOUNT OF CUSTOMS CLEARANCE FEE, PACKING CHARGE, H ANDLING CHARGE, TRUCKAGE, OCEAN FREIGHT, GATE CHARGES, INLAND CHARGE, REGISTE R FEE, DELIVERY FEE, ETC. 5. DURING THIS YEAR, THE ASSESSEE MADE PAYMENTS TO THE FOREIGN PARTIES FOR ACTIVITIES CARRIED OUT BY THEM OUTSIDE INDIA (I.E. FROM FOREIG N PORTS ONWARDS) DEBITED IN ITS P&L ACCOUNT AN AMOUNT AGGREGATING TO RS.1,68,44,535/- U NDER THE HEAD SHIPPING EXPENSES. IT WAS BROUGHT TO OUR NOTICE THAT THE PAYMENTS WERE MA DE, INTER ALIA, TO THE FOREIGN GROUP ENTITIES OF THE ASSESSEE VIZ., (I) NISSIN CORPORATI ON, JAPAN, (II) NISSIN INTERNATIONAL TRANSPORT USA INC., USA, (III) NISSIN LOGISTICS (VN) CO. LTD, VIETNAM, (IV) NISSIN TRANSPORT (S) PTE LTD, SINGAPORE, (V) NISSIN TRANSPORT PHILIPPINES CO RP, PHILIPPINES, (VI) NISSIN TRANSPORTATION & WAREHOUSING (H.K.) LTD, HONGKONG, (VII) NISTRANS (M) SDN BHD, MALAYSIA, (VIII) PT. NISSIN TRANSPORT INDONESIA, IN DONESIA AND (IX) SIAM NISTRANS CO. LTD., THAILAND. IT WAS BROUGHT TO OUR NOTICE THAT DURING THE ASSESSMENT PROCEEDINGS, PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE TO EXPLAI N THE NATURE OF ACTIVITIES CARRIED OUT BY THE FOREIGN COMPANIES FROM THE FOREIGN PORT ONWARDS IN RESPECT TO THE LOGISTIC WORK. THEREFORE, THE CONFUSION AROSE IN THE FIRST PLACE. IT WAS SUBMITTED BY THE LD. AR THAT BEFORE THE LD. CIT(A) ALL THE FACTS WERE BROUGHT TO HIS NO TICE AND THE LD. CIT(A) AFTER CALLING FOR A 4 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 REMAND REPORT AND CONSIDERING THE SAME AND THE REJO INDER FILED BY THE ASSESSEE (WHICH HAS BEEN REPRODUCED IN THE IMPUGNED ORDER), THE LD. CIT (A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. BEFORE US, THE LD. DR VEHEMENTLY SUBMITT ED THAT THE PAYMENTS HAVE BEEN MADE TO THE RELATED PARTIES (GROUP ENTITIES) AND, THEREFORE , AUTOMATICALLY THERE IS A BUSINESS CONNECTION AND, THEREFORE, PAYMENTS MADE TO THEM HA D TO BE SUBJECTED TO TDS. WE DO NOT AGREE WITH THE LD. DRS CONTENTION THAT MERELY BECA USE THE FOREIGN COMPANIES ARE RELATED PARTIES THERE IS AUTOMATICALLY A BUSINESS CONNECTIO N AND, THEREFORE, SEC. 9 IS ATTRACTED. ACCORDING TO US, IF THERE IS A RELATED PARTY TRANSA CTION THEN WHAT IS TO BE EXAMINED IS WHETHER THE PAYMENTS HAVE BEEN MADE AT AN ARMS LENG TH PRICE OR NOT. UNLESS THE FOREIGN COMPANY WHICH IS AN INDEPENDENT LEGAL ENTITY INCORP ORATED IN A FOREIGN COUNTRY HAVE A BUSINESS ACTIVITY IN INDIA OR A PE IN INDIA, IT CAN NOT BE BROUGHT TO TAX FOR THE INCOME WHICH IT EARNS FOR THE SERVICES RENDERED OUTSIDE INDIA. WE NOTE THAT THE ASSESSEE HAS MADE PAYMENT TO FOREIGN COMPANIES TOWARDS LOGISTIC SERVICES UNDE RTAKEN BY THEM FROM THE FOREIGN PORT ONWARDS WHICH IS NOT IN THE DOMAIN OF INDIA. 6. WE ALSO NOTE THAT SINCE THE AO TOOK A STAND THAT WHICH HE EXPRESSED IN THE REMAND REPORT IN WHICH HE STRESSED THAT SINCE THE AMOUNT IS BEING DISBURSED BY THE ASSESSEE TO THE FOREIGN COMPANIES AND THEY BEING RELATED PARTIES TO THE ASSESSEE, THE ASSESSEE BEING A RESIDENT OF INDIA THERE IS A BUSINESS CONNECTION IN THE CASE OF PAYMENTS MADE TO THESE FOREIGN GROUP COMPANIES. SO, IN OTHER WORDS, THE A O ADMITTED THAT A FOREIGN COMPANY WHICH IS INTO THE BUSINESS OF INTERNATIONAL FREIGHT FORWARDING OR SIMILAR BUSINESS ACTIVITIES AND IS NOT A RELATED PARTY IN INDIA, THEN IT WOULD NOT HAVE A BUSINESS CONNECTION IN INDIA, AND, THEREFORE, NOT LIABLE FOR TAXES IN INDIA. IT W AS BROUGHT TO OUR NOTICE THAT AFTER TAKING SUCH A VIEW, THE AO IN SUBSEQUENT YEARS HAS NOT DIS ALLOWED PAYMENTS MADE BY ASSESSEE TO UNRELATED NON-RESIDENTS FOR SIMILAR SERVICES RENDER ED BY THEM. SO, THE ONLY ARGUMENT FOR DISALLOWANCE IS THAT THESE FOREIGN COMPANIES ARE R ELATED PARTIES AND SO HAVE BUSINESS CONNECTION, SO TDS HAD TO BE DEDUCTED BEFORE PAYMEN T WAS MADE TO THEM, WHICH REASONING CANNOT BE AGREED TO SINCE WE HAVE ALREADY TAKEN NOT E THAT THEY ARE INDEPENDENT LEGAL ENTITY INCORPORATED IN FOREIGN COUNTRIES AND SINCE THE FO REIGN COMPANIES NEITHER HAVE ANY BUSINESS ACTIVITY NOR HAVE ANY PERMANENT ESTABLISHMENT IN I NDIA CANNOT AUTOMATICALLY HAVE BUSINESS CONNECTION IN INDIA JUST BECAUSE THEY ARE RELATED P ARTIES. WE ALSO NOTE THAT THE ASSESSEE 5 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 FUNCTIONS AND CARRIES ON BUSINESS ON ITS OWN, INSTE AD OF FUNCTIONING AS AN AGENT OF THE FOREIGN GROUP ENTITIES AND ACCORDINGLY, THE ASSESSE E CANNOT BE CONSTRUED TO HAVE BUSINESS CONNECTION WITH FOREIGN GROUP ENTITIES IN INDIA. F URTHER, WE NOTE THAT THE ASSESSEE DOES NOT HAVE AN AUTHORITY TO CONCLUDE CONTRACTS ON BEHALF O F FOREIGN GROUP COMPANIES. THE ASSESSEE BEING IN THE BUSINESS OF LOGISTIC SERVICE, THE QUES TION OF MAINTAINING A STOCK OF GOODS IN INDIA ALSO DOES NOT ARISE AND THE ASSESSEE DOES NOT SECURE ORDERS IN INDIA MAINLY OR WHOLLY FOR THE FOREIGN GROUP ENTITIES BUT CARRIES BUSINESS ON ITS OWN. THUS, THE ASSESSEE CANNOT BE CONSTRUED TO HAVE CREATED A BUSINESS CONNECTION IN INDIA FOR FOREIGN GROUP ENTITIES. IT IS NOT THE CASE OF THE AO THAT THE SERVICES RENDERED ARE N OT AT ARMS LENGTH SO, THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY T HE REVENUE IN THIS REGARD. WE ALSO OBSERVE THAT THE PRECISE QUESTION AS TO WHETHER A F OREIGN COMPANY INCORPORATED UNDER THE RESPECTIVE FOREIGN COUNTRY LAWS WHEN ENGAGED IN THE BUSINESS OF PROVIDING FREIGHT AND FORWARDING AND LOGISTIC SERVICES WITH AN INDIAN ENT ITY NEEDS TO DEDUCT TDS AT SOURCE CAME BEFORE THE COORDINATE BENCH OF THIS TRIBUNAL MUMBAI BENCH REPORTED IN (2012) 18 TAXMAN.COM 302 IN UPS SCS (ASIA) LTD. VS. ADIT (INT ERNATIONAL TAXATION) WHEREIN THE FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE, A FOREIGN COMPANY INCORPORATED UNDER THE LAWS OF HONG KONG, WAS ENGAGED IN THE BUSINESS OF PROVISION OF SUPPLY CHAIN MANAGEMEN T, INCLUDING THE PROVISION OF FREIGHT AND FORWARDING AND LOGISTICS SERVICES. IT ENTERED INTO A 'REGIONAL TRANSPORTATION SERVICES AGREEMENT' WITH 'M' AN INDIAN COMPANY FOR PROVIDING FREIGHT AND LOGISTICS SERVICES TO EACH OTHER. AS PER THIS AGREEMENT, EACH PARTY AGREED TO RENDER SERVICES TO THE OTHER IN RESPECT OF IMPORT AND EXPORT OF CONSIGNMENTS. THE ASSESSING OF FICER NOTED TWO TYPES OF CONSIGNMENTS, VIZ., IMPORT CONSIGNMENTS AND EXPORT CONSIGNMENTS. HE OBSERVED THAT IMPORT CONSIGNMENTS WERE THOSE WHICH ORIGINATED OUTSIDE IN DIA AND WERE TO BE DELIVERED IN INDIA. THE SERVICES IN ORIGIN OF FOREIGN COUNTRY BROADLY C OMPRISED OF OVERSEAS LOCAL PICK, OVERSEAS GROUND TRANSPORTATION, OVERSEAS CUSTOM CLEARANCE, O VERSEAS DOCUMENTATION, LOADING AND UNLOADING AND STUFFING CONSIGNMENT IN CARGO, AGREED TO BE PERFORMED OUTSIDE INDIA. 'M', UNDERTOOK TO PERFORM DESTINATION SERVICES ON THE AR RIVAL OF CONSIGNMENT IN INDIA. DESTINATION SERVICES TO BE CARRIED OUT IN INDIA BY 'M' COMPRISE D OF LOCAL UNLOADING AND LOADING OF CONSIGNMENT, LOCAL CUSTOM CLEARANCE, LOCAL GROUND T RANSPORTATION, LOCAL DOCUMENTATION ETC. ON THE OTHER HAND, EXPORT CONSIGNMENTS ORIGINATED F ROM INDIA FOR THE DELIVERY OF CONSIGNMENTS OUTSIDE INDIA. THE ASSESSEE, AS PER TH E AGREEMENT, UNDERTOOK TO PERFORM THE DESTINATION SERVICES OUTSIDE INDIA, SIMILAR TO THOS E PERFORMED BY 'M' IN INDIA IN THE CONTEXT OF IMPORT CONSIGNMENTS. DURING THE YEAR IN QUESTION TH E ASSESSEE EARNED RS. 2,32,89,208 AS INTERNATIONAL TRANSPORTATION FEE UNDER THE AGREEMEN T FROM 'M' TOWARDS SERVICES RENDERED BY IT ABROAD ON THE ABOVE DESCRIBED EXPORT CONSIGNMENTS. SUCH AMOUNT WAS CLAIMED BY THE ASSESSEE TO BE NOT CHARGEABLE TO TAX IN INDIA AS PE R THE PROVISIONS OF SECTION 5, READ WITH SECTION 9. IT WAS SO CLAIMED ON THE PREMISE THAT TH E INCOME AROSE FROM SERVICES RENDERED BY IT OUTSIDE INDIA AND NO OPERATIONS IN THIS REGARD WERE CARRIED OUT IN INDIA. THE ASSESSEE ALSO CLAIMED THAT ITS RELATIONSHIP WITH 'M' WAS THAT OF INDEPENDENT CONTRACTOR AND THE BUSINESS BETWEEN THEM WAS DONE ON PRINCIPAL TO PRINCIPAL BAS IS AND AT ARM'S LENGTH. THE ASSESSING 6 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 OFFICER OBSERVED THAT THE SERVICES RENDERED BY THE ASSESSEE UNDER THE AGREEMENT WERE IN THE NATURE OF FREIGHT AND LOGISTICS SERVICES SUCH AS TR ANSPORT, PROCUREMENT, CUSTOM CLEARANCE, SORTING, DELIVERY, WAREHOUSING AND PICKING UP SERVI CES. IN HIS OPINION SUCH SERVICES WERE COVERED UNDER THE PROVISIONS OF SECTION 9(1)(VII), BEING 'FEES FOR TECHNICAL SERVICES'. IN ORDER TO BUTTRESS HIS VIEWPOINT, THE ASSESSING OFFICER ALSO OBSERVED THAT 'M' HAD DEDUCTED TAX AT SOURCE FROM THE TRANSPORTATION FEES PAID TO THE ASSESSEE A ND IN THAT VIEW OF THE MATTER THE ASSESSEE'S CONTENTION THAT THE AMOUNT WAS NOT CHARGEABLE TO TA X IN INDIA, WAS BEREFT OF ANY FORCE. THE COMMISSIONER (APPEALS) ECHOED THE ASSESSMENT ORDER ON THIS POINT BY HOLDING THAT THE TRANSPORTATION FEES RECEIVED BY THE ASSESSEE FROM ' M' WAS TAXABLE IN INDIA AS 'FEES FOR TECHNICAL SERVICES' UNDER SECTION 9(1)(VII) AS IT W AS FOR THE SERVICES IN THE NATURE OF 'MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES'. ON SECOND APPEAL IT WAS HELD BY TRIBUNAL AS UNDER: THE ENTIRE DISPUTE CENTERS AROUND THE TAXABILITY OF THE AMOUNT RECEIVED BY THE ASSESSEE FROM 'M' IN RESPECT OF SERVICES PERFORMED OUTSIDE INDIA ON THE EXPORT CONSIGNMENTS OF 'M' ORIGINATING FROM INDIA. THERE I S NO QUARREL OVER THE NATURE OF SERVICES FOR WHICH THE ABOVE REFERRED AMOUNT HAS BE EN PAID TO THE ASSESSEE BEING, FREIGHT AND LOGISTICS SERVICES SUCH AS TRANSPORT, P ROCUREMENT, CUSTOMS CLEARANCE, SORTING, DELIVERY, WAREHOUSING AND PICK UP SERVICES . NOW THE PRIMARY QUESTION WHICH ARISES FOR CONSIDERATION IS AS TO WHETHER THE PAYME NT IN RESPECT OF THESE SERVICES CAN BE HELD AS 'FEES FOR TECHNICAL SERVICES' WITHIN THE MEANING OF SECTION 9(1)( VII ). [PARA 4] A BARE PERUSAL OF THE PROVISION OF EXPLANATION 2 TO SECTION 9(1)( VII ) INDICATES THAT THE 'FEES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATI ON FOR RENDERING OF ANY 'MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES' BUT DOES NOT INC LUDE THE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY ETC. THE COMMISSIONER (APPEA LS) HAS HELD THE SERVICES RENDERED BY THE ASSESSEE AS 'FEES FOR TECHNICAL SER VICES' COMING WITHIN THE SWEEP OF 'MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES'. ON THE CONTRARY, THE CONTENTION OF THE ASSESSEE HAS REMAINED BEFORE THE AUTHORITIES BELOW AS WELL AS IN INSTANT APPEAL THAT SUCH SERVICES DO NOT FALL WITHIN THE AMBIT OF ANY O F THE CATEGORIES TAKEN NOTE OF BY THE AUTHORITIES BELOW. THUS, IT IS NECESSARY TO EXAMINE AS TO WHETHER THE SERVICES SO PROVIDED BY THE ASSESSEE FALL WITHIN THE SCOPE OF M ANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES', AS PER EXPLANATION 2 TO SECTION 9(1)( VII ). [PARA 5] IN ORDER TO APPRECIATE THE NATURE OF SERVICES MORE ELABORATELY, IT IS RELEVANT TO CONSIDER THE TERMS OF THE AGREEMENT ENTERED INTO BE TWEEN THE ASSESSEE AND 'M'. THE SCOPE OF SERVICES HAS BEEN GIVEN IN CLAUSE 1.1. IN THE RECITAL CLAUSE IT HAS BEEN PROVIDED THAT THE ASSESSEE-COMPANY MAY REQUIRE 'M' TO PERFORM LOGISTICS SERVICES SUCH AS TRANSPORT, PROCUREMENT, CUSTOM CLEARANCE, SORTIN G, DELIVERY, WAREHOUSING AND PICKING UP SERVICES (LOCAL SERVICES) WITHIN INDIA ( LOCAL OPERATING AREA). IT HAS FURTHER BEEN PROVIDED THAT 'M' MAY ALSO SEEK SIMILAR SERVIC ES FROM THE ASSESSEE-COMPANY SUCH AS TRANSPORT, PROCUREMENT, CUSTOMS CLEARANCE, SORTI NG, DELIVERY, WAREHOUSING AND PICK UP SERVICES (INTERNATIONAL SERVICES) OUTSIDE I NDIA. THE PRESENT APPEAL IS CONCERNED WITH THE 'INTERNATIONAL SERVICES' PROVIDE D BY THE ASSESSEE TO 'M' OUTSIDE INDIA. THESE SERVICES COMPRISE OF TRANSPORT, PROCUR EMENT, CUSTOMS CLEARANCE, SORTING, WAREHOUSING AND PICK UP SERVICES ON THE CARGO EXPOR TED BY 'M' ON BEHALF OF ITS CUSTOMERS. HAVING NOTED THE NATURE OF SERVICES PROV IDED BY THE ASSESSEE OUTSIDE INDIA, FOR WHICH 'M' INDIA MADE THE PAYMENT, IT IS NECESSA RY TO CONSIDER IF THESE CAN BE DESCRIBED AS MANAGERIAL OR TECHNICAL OR CONSULTANCY SERVICES. [PARA 6] 7 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 FIRST ONE HAS TO CONSIDER THE AMBIT OF 'MANAGERIAL SERVICES' TO TEST WHETHER THE INSTANT SERVICES CAN QUALIFY TO BE SO-CALLED. ORDINARILY TH E MANAGERIAL SERVICES MEAN MANAGING THE AFFAIRS BY LAYING DOWN CERTAIN POLICIE S, STANDARDS AND PROCEDURES AND THEN EVALUATING THE ACTUAL PERFORMANCE IN THE LIGHT OF THE PROCEDURES SO LAID DOWN. THE MANAGERIAL SERVICES CONTEMPLATE NOT ONLY EXECUT ION BUT ALSO THE PLANNING PART OF THE ACTIVITY TO BE DONE. IF THE OVERALL PLANNING AS PECT IS MISSING AND ONE HAS TO FOLLOW A DIRECTION FROM THE OTHER FOR EXECUTING PARTICULAR JOB IN A PARTICULAR MANNER, IT CANNOT BE SAID THAT THE FORMER IS MANAGING THAT AFF AIR. IT WOULD MEAN THAT THE DIRECTIONS OF THE LATTER ARE EXECUTED WITHOUT THERE BEING ANY PLANNING PART INVOLVED IN THE EXECUTION AND ALSO THE EVALUATION OF THE PERFOR MANCE. IN THE ABSENCE OF ANY SPECIFIC DEFINITION OF THE PHRASE 'MANAGERIAL SERVI CES' AS USED IN SECTION 9(1)( VII ) DEFINING THE 'FEES FOR TECHNICAL SERVICES', IT NEED S TO BE CONSIDERED IN A COMMERCIAL SENSE. IT CANNOT BE INTERPRETED IN A NARROW SENSE T O MEAN SIMPLY EXECUTING THE DIRECTIONS OF THE OTHER FOR DOING A SPECIFIC TASK. FOR INSTANCE, IF GOODS ARE TO BE LOADED AND SOME WORKER IS INSTRUCTED TO PLACE THE GOODS ON A CARRIER IN A PARTICULAR MANNER, THE ACT OF THE WORKER IN PLACING THE GOODS IN THE P RESCRIBED MANNER, CANNOT BE DESCRIBED AS MANAGING THE GOODS. IT IS A SIMPLE DIR ECTION GIVEN TO THE WORKER WHO HAS TO EXECUTE IT IN THE WAY PRESCRIBED. IT IS QUITE NA TURAL THAT SOME SORT OF APPLICATION OF MIND IS REQUIRED IN EACH AND EVERY ASPECT OF THE WO RK DONE. AS IN THE ABOVE EXAMPLE WHEN THE WORKER WILL LIFT THE GOODS, HE IS EXPECTED TO BE VIGILANT IN PICKING UP THE GOODS MOVING TOWARDS THE CARRIER AND THEN PLACING T HEM. THIS ACT OF THE WORKER CANNOT BE DESCRIBED AS MANAGING THE GOODS BECAUSE H E SIMPLY FOLLOWED THE DIRECTION GIVEN TO HIM. ON THE OTHER HAND, 'MANAGING' ENCOMPA SSES NOT ONLY THE SIMPLE EXECUTION OF A WORK, BUT ALSO CERTAIN OTHER ASPECTS , SUCH AS PLANNING FOR THE WAY IN WHICH THE EXECUTION IS TO BE DONE COUPLED WITH THE OVERALL RESPONSIBILITY IN A LARGER SENSE. THUS IT IS MANIFEST THAT THE WORD 'MANAGING' IS WIDER IN SCOPE THAN THE WORD 'EXECUTING'. RATHER THE LATER IS EMBEDDED IN THE FO RMER AND NOT VICE VERSA . [PARA 7] ADVERTING TO THE FACTS OF THE INSTANT CASE IT IS OB SERVED THAT THE ASSESSEE PERFORMED FREIGHT AND LOGISTICS SERVICES OUTSIDE INDIA IN RES PECT OF CONSIGNMENTS ORIGINATING FROM INDIA UNDERTAKEN TO BE DELIVERED BY 'M' INDIA. THE ROLE OF THE ASSESSEE IN THE ENTIRE TRANSACTION WAS TO PERFORM ONLY THE DESTINATION SER VICES OUTSIDE INDIA BY UNLOADING AND LOADING OF CONSIGNMENT, CUSTOM CLEARANCE AND TR ANSPORTATION TO THE ULTIMATE CUSTOMER. IT IS TOO MUCH TO CATEGORIZE SUCH RESTRIC TED SERVICES AS MANAGERIAL SERVICES. THEREFORE, THIS CONTENTION RAISED ON BEHALF OF THE REVENUE HAS TO BE REJECTED. [PARA 8] THE NEXT COMPONENT OF THE DEFINITION OF 'FEES FOR T ECHNICAL SERVICES', BEING 'CONSULTANCY SERVICES', WHICH HAS BEEN PRESSED INTO SERVICE BY THE COMMISSIONER (APPEALS) TO FORTIFY HIS VIEW THAT THE AMOUNT RECEI VED BY THE ASSESSEE IS COVERED WITHIN SECTION 9(1)( VII ). THE WORD 'CONSULTANCY' MEANS GIVING SOME SORT OF CONSULTATION DE HORS THE PERFORMANCE OR THE EXECUTION OF ANY WORK. IT I S ONLY WHEN SOME CONSIDERATION IS GIVEN FOR RENDERING SOME ADVICE OR OPINION ETC., THAT THE SAME FALLS WITHIN THE SCOPE OF 'CONSULTANCY SERVICES'. THE WORD 'CONSULTANCY' E XCLUDES ACTUAL 'EXECUTION'. THE NATURE OF SERVICES, BEING FREIGHT AND LOGISTICS SER VICES PROVIDED BY THE ASSESSEE TO 'M' HAS NOT BEEN DISPUTED BY THE AUTHORITIES BELOW. THE RE IS NOTHING LIKE GIVING ANY CONSULTATION WORTH THE NAME. RATHER SUCH PAYMENT IS WHOLLY AND EXCLUSIVELY FOR THE EXECUTION IN THE SHAPE OF TRANSPORT, PROCUREMENT, C USTOMS CLEARANCE, DELIVERY, WAREHOUSING AND PICKING UP SERVICES. THAT BEING THE POSITION, THE PAYMENT IN LIEU OF FREIGHT AND LOGISTICS SERVICES CANNOT BE RANKED AS CONSULTANCY SERVICES. [PARA 9] THE ONLY LEFT OVER COMPONENT OF THE DEFINITION OF ' FEES FOR TECHNICAL SERVICES' TAKEN NOTE OF BY THE LD. CIT(A) IS 'TECHNICAL SERVICES'. HE OBSERVED THAT THE ASSESSEE'S 8 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 BUSINESS STRUCTURE IS TIME-BOUND SERVICE COUPLED WI TH CONTINUOUS REAL TIME TRANSMISSION OF INFORMATION BY USING AND ALSO MAKIN G AVAILABLE ITS TECHNOLOGY IN THE FORM OF SOPHISTICATED EQUIPMENTS AND SOFTWARE ETC. THE CIT(A) HAS HELD THAT : 'IN ORDER TO ENSURE EFFICIENT AND TIMELY DELIVERY A ND TO PROVIDE CONTINUOUS REAL TIME INFORMATION, THE ASSESSEE IS REQUIRED TO USE SOPHIS TICATED TECHNOLOGY FOR WHICH THE INDIAN ENTITY IS ALSO EQUALLY INVOLVED AND TO WHOM THE ASSESSEE IS COMMITTED TO PROVIDING THE REQUISITE SOFTWARE AND EQUIPMENT'. [P ARA 10] ON GOING THROUGH CLAUSE 2 OF THE AGREEMENT, IT IS O BVIOUS THAT 'M' SHALL 'SEPARATELY EXECUTE A TECHNOLOGY AND SOFTWARE LICENSE AGREEMENT ' FOR THE PROVISION OF COMPUTER EQUIPMENT AND SOFTWARE SUPPLIED BY THE ASSESSEE. IT IS NOBODY'S CASE THAT THE CONSIDERATION IN QUESTION RELATES TO THE SUPPLY OF ANY COMPUTER EQUIPMENT AND SOFTWARE BY THE ASSESSEE TO 'M'. ONE FAILS TO APPRE CIATE AS TO HOW THIS CLAUSE 2 MAKES THE SERVICES PROVIDED BY THE ASSESSEE AS 'TECHNICAL '. RATHER CLAUSE 2 MANDATES TO EXECUTE A SEPARATE TECHNOLOGY AND SOFTWARE LICENSE AGREEMENT FOR THE PROVISION OF COMPUTER EQUIPMENT AND SOFTWARE. HOW IS IT THAT THE CONSIDERATION FOR THE SERVICES CAN BE ATTRIBUTED TO A PROPOSED AGREEMENT, WHICH HAS YE T TO SEE THE LIGHT OF THE DAY. [PARA 11] THE COMMISSIONER (APPEALS) IN REACHING THE CONCLUSI ON THAT THE ASSESSEE RENDERED 'TECHNICAL SERVICES' ALSO OBSERVED THAT ITS 'BUSINE SS STRUCTURE IS TIME-BOUND SERVICE COUPLED WITH CONTINUOUS REAL TIME TRANSMISSION OF I NFORMATION BY USING AND ALSO MAKING AVAILABLE ADVANCED TECHNOLOGY IN THE FORM OF SOPHISTICATED EQUIPMENT AND SOFTWARE.' HE WAS SWAYED BY THE CONTENTION OF THE A SSESSEE THAT THE 'M' OR THE ULTIMATE CUSTOMER COULD TRACK THE MOVEMENT OF CARGO WITH THE HELP OF COMPUTERS. AS NOTED SUPRA THAT THE CONSIDERATION RECEIVED BY THE ASSESS EE DID NOT INCLUDE ANY CONSIDERATION FOR THE SUPPLY OF ANY EQUIPMENT TO 'M '. NOW IT IS TO BE EXAMINED AS TO WHETHER THE USE OF COMPUTER IN ANY MANNER FOR KNOWI NG THE LOCATION OF THE CARGO AT A PARTICULAR TIME, CAN BE HELD AS TECHNICAL SERVICE. [PARA 13] EXPLANATION TO SECTION 9(1)( VII ) DEFINES THE EXPRESSION 'FEES FOR TECHNICAL SERVIC ES' AS CONSIDERATION FOR RENDERING 'MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES'. IT IS SEEN THAT THERE IS NO DEFINITION OF THE TERM 'TECHNICAL SERVICES' IN THE ACT. [PARA 14] THE PRINCIPLE OF NOSCITUR A SOCIIS MANDATES THAT THE MEANING OF A WORD IS TO BE JUDGE D BY THE COMPANY OF OTHER WORDS WHICH IT KEEPS. THIS RULE IS WIDER IN SCOPE THAN THE RULE OF EJUSDEM GENERIS IN ORDER TO DISCOVER THE MEANING OF A WORD WHICH H AS NOT BEEN DEFINED IN THE ACT. AS NOTED ABOVE THE WORD 'TECHNI CAL' HAS BEEN SANDWICHED BETWEEN THE WORDS 'MANAGERIAL' AND 'CONSULTANCY' IN EXPLANATION 2 TO SECTION 9(1)( VII ) AND NO DEFINITION HAS BEEN ASSIGNED TO THE 'TECHNICAL' SER VICES IN THE RELEVANT PROVISION, ONE NEEDS TO ASCERTAIN THE MEANING OF THE 'TECHNICAL SE RVICES' FROM THE OVERALL MEANING OF THE WORDS 'MANAGERIAL' AND 'CONSULTANCY' SERVICES B Y APPLYING THE PRINCIPLE OF NOSTICUR A SOCIIS . IT HAS BEEN HELD ABOVE THAT THE 'MANAGERIAL SERVI CES' AND 'CONSULTANCY SERVICES' PRE SUPPOSE SOME SORT OF DIRECT HUMAN INV OLVEMENT. THESE SERVICES CANNOT BE CONCEIVED WITHOUT THE DIRECT INVOLVEMENT OF MAN. TH ESE SERVICES CAN BE RENDERED WITH OR WITHOUT ANY EQUIPMENT, BUT THE HUMAN INVOLVEMENT IS INEVITABLE. MOVING IN THE LIGHT OF THIS RULE, THERE REMAINS NO DOUBT WHATSOEVER THA T THE TECHNICAL SERVICES CANNOT BE CONTEMPLATED WITHOUT THE DIRECT INVOLVEMENT OF HUMA N ENDEAVOUR. WHERE SIMPLY AN EQUIPMENT OR A STANDARD FACILITY ALBEIT DEVELOPED O R MANUFACTURED WITH THE USE OF TECHNOLOGY IS USED, SUCH A USER CANNOT BE CHARACTER IZED AS USING 'TECHNICAL SERVICES'. [PARA 15] 9 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 COMING BACK TO THE FACTS OF THE PRESENT CASE, EVEN IF ONE ACCEPTS THE FIRST APPELLATE AUTHORITY'S POINT OF VIEW THAT THE COMPUTER COULD B E USED IN TRACING THE MOVEMENT OF THE GOODS, SUCH USE OF COMPUTER, THOUGH INDIRECT, R EMOTE AND NOT NECESSARY, CANNOT BRING THE PAYMENT FOR FREIGHT AND LOGISTICS SERVICE S WITHIN THE PURVIEW OF 'TECHNICAL SERVICES'. THE ESSENCE OF THE CONSIDERATION FOR THE PAYMENT IS RENDERING OF SERVICES AND NOT THE USE OF COMPUTER. IF INCIDENTALLY COMPUT ER IS USED AT ANY STAGE, WHICH IS OTHERWISE NOT NECESSARY FOR RENDERING SUCH SERVICES , THE PAYMENT FOR FREIGHT AND LOGISTICS WILL NOT PARTAKE OF THE CHARACTER OF FEES OF 'TECHNICAL SERVICES', THEREFORE, THIS CONTENTION RAISED ON BEHALF OF THE REVENUE HAS TO B E REPEALED. [PARA 16] THUS IT CAR BE NOTICED THAT THE PAYMENT MADE TO THE ASSESSEE IN QUESTION IS NOT A CONSIDERATION FOR MANAGERIAL OR TECHNICAL OR CONSUL TANCY SERVICES AND THAT BEING THE POSITION, IT CANNOT FALL WITHIN THE AMBIT OF SECTIO N 9(1)( VII ). [PARA 17] SECTION 4 PROVIDES THAT THE INCOME TAX SHALL BE CHA RGED ON THE TOTAL INCOME OF ANY ASSESSEE OF THE PREVIOUS YEAR FOR ANY ASSESSMENT YE AR AT THE RATES IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS ACT. SCOPE OF TOTAL INCOME OF ANY PERSON HAS BEEN ENSHRINED IN SECTION 5. THE ASSESSEE IN QUESTION IS A NON-RESIDENT COMPANY. SECTION 5(2) MANDATES THAT THE TOTAL INCOME OF A NON-RESIDE NT INCLUDES THE INCOME FROM WHATEVER SOURCE DERIVED WHICH IS RECEIVED OR IS DEE MED TO BE RECEIVED IN INDIA; OR ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE I N INDIA. THE ONLY POSSIBILITY OF THE RECEIPT BY THE ASSESSEE IN THE PRESENT FACTS AND CI RCUMSTANCES QUALIFYING FOR INCLUSION IN THE TOTAL INCOME, CAN BE UNDER SECTION 9. IT HAS BEEN OBSERVED THAT SECTION 9(1)( VII ) IS NOT APPLICABLE. NOW IT IS NECESSARY TO EXAMINE T HE PRESCRIPTION OF SECTION 9(1)( I ) WHICH DEALS WITH THE INCOME ACCRUING OR ARISING FRO M ANY BUSINESS CONNECTION IN INDIA. IT PROVIDES THAT WHERE AN INCOME ACCRUES OR ARISES WHETHER DIRECTLY OR INDIRECTLY THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA ETC., IT SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA. EXPLANATION 1(A) STATES THAT IN THE CASE OF A BUSINESS OF WHICH ALL OPERATIONS ARE NOT CARRIED OUT IN INDIA, THE IN COME OF THE BUSINESS DEEMED UNDER THIS CLAUSE TO ACCRUE OR ARISE IN INDIA SHALL BE ON LY SUCH PART OF THE INCOME AS IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED O UT IN INDIA. THIS EXPLANATION MAKES IT PROMINENT THAT ONLY THAT PART OF THE INCOME FROM BUSINESS OPERATIONS CAN BE SAID TO BE ACCRUING OR ARISING IN INDIA, AS IS RELATABLE TO THE CARRYING ON OF OPERATIONS IN INDIA. IN OTHER WORDS, IF A NON-RESIDENT EARNS ANY INCOME FROM INDIA BY MEANS OF OPERATIONS CARRIED ON OUTSIDE INDIA, THAT WILL NOT FALL WITHIN THE SCOPE OF SECTION 9(1)( I ). EVEN EXPLANATION BELOW SECTION 9(2), AS RELIED ON BY THE REVENUE, R EQUIRING INCLUSION OF INCOME IN THE TOTAL INCOME OF THE NON- RESIDENT WHETHER OR NOT THE NON- RESIDENT HAS A RESIDENCE OR PLACE OF BUSINESS OR BU SINESS-CONNECTION IN INDIA OR THE NON-RESIDENT HAS RENDERED SERVICES IN INDIA, IS APP LICABLE ONLY IN RESPECT OF CLAUSES ( V ) TO ( VII ). CLAUSE ( I ) OF SECTION 9 HAS NOT BEEN INCLUDED BY THE LEGISLA TURE WITHIN THE AMBIT OF THIS EXPLANATION . IT SHOWS THAT UNLESS A NON-RESIDENT EARNS INCOME FROM BUSINESS OPERATIONS CARRIED OUT IN INDIA, SUCH INCO ME CANNOT BE DEEMED AS ACCRUING OR ARISING IN INDIA. REVERTING TO THE FACTS OF THE INSTANT CASE, IT IS CRYSTAL CLEAR THAT THE ASSESSEE RENDERED 'INTERNATIONAL SERVICES' OUTSIDE INDIA WHICH REQUIRED THE PAYMENT IN QUESTION. IF THIS IS THE POSITION, WHICH HAS NOT EVEN BEEN DISPUTED BY THE REVENUE, THEN THERE CAN BE NO QUESTION OF ROPING SUCH INCOME WITHIN THE KEN OF SECTION 9(1)( I ). [PARA 18] IT IS, THEREFORE, PATENT THAT THE PAYMENT RECEIVED BY THE ASSESSEE NEITHER FALLS UNDER SECTION 9(1)( I ) NOR UNDER SECTION 9(1)( VII ). SINCE THE INCOME CANNOT BE DESCRIBED AS DEEMED TO ACCRUE OR ARISE IN INDIA AND THERE IS NO DOUBT ABOUT SUCH INCOME HAVING NOT 10 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 BEEN RECEIVED OR DEEMED TO BE RECEIVED OR ACCRUING OR ARISING IN INDIA, THE TAXABILITY OF SUCH INCOME FAILS. THEREFORE, THE IMPUGNED ORDER HAS TO BE SET ASIDE AND IT HAS TO BE HELD THAT THE AMOUNT IN QUESTION CANNOT BE CHARGED TO TAX. [PARA 19] IN THE RESULT, THE APPEAL IS ALLOWED. [PARA 20] 6. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID BY THE TRIBUNAL IN THE CASE OF UPS SCS (ASIA) LTD. VS. ADIT (SUPRA) WE FIND NO INFIRMI TY IN THE ORDER OF THE LD. CIT(A) AND WE CONFIRM THE ORDER OF LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 7. THE NEXT GROUND OF APPEAL OF THE REVENUE IS AGAI NST THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS.15,91,602/- MADE BY THE AO U/S. 40(A)(IA) OF THE ACT. 8. BRIEF FACTS AS NOTED BY THE LD. CIT(A) BECAUSE T HE AO HAS BROUGHT THIS ITEM OF DISALLOWANCE ALSO IN THE BASKET OF RS.3,07,54,392/- . DURING THE YEAR, THE ASSESSEE MADE PAYMENTS TOWARDS REIMBURSEMENT OF EXPENSES INCURRED ON BEHALF OF THE ASSESSEE BY SOME PARTIES THE DETAILS OF WHICH WAS FURNISHED BEFORE T HE LD. CIT(A). THE LD. CIT(A) TAKING NOTE THAT THESE PAYMENTS WERE ONLY REIMBURSEMENT AN D NO SERVICE COMPONENT WAS EMBEDDED THEREIN, HE CONCLUDED THAT THERE IS NO INC OME EMBEDDED IN THE REIMBURSEMENT AND, THEREFORE, NOT LIABLE FOR WITHHOLDING OF ANY T AX IN INDIA. SO, HE WAS PLEASED TO DELETE THE DISALLOWANCE MADE BY THE AO. AGGRIEVED, THE RE VENUE IS BEFORE US. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE BEFORE THE LD. CIT (A) HAS FILED RELEVANT DOCUMENTS TO SUBSTANTIATE THAT RS.15,91,602/- WAS PAID TOWARDS R EIMBURSEMENT OF EXPENSES BORNE ON BEHALF OF THE ASSESSEE TO SOME PARTIES. THE DETAIL S WERE FILED ON 08.10.2014 BEFORE THE LD. CIT(A) WHO IN TURN HAVE CALLED FOR THE REMAND REPOR T FROM THE AO. THE EXPENSES INCURRED ON BEHALF OF THE ASSESSEE DID NOT HAD ANY SERVICE F EE IN IT TO THE PAYEE, SO, THERE IS NO COMPONENT OF INCOME TO THE PARTIES TO WHOM PAYMENTS WERE MADE BY ASSESSEE. SINCE THE ASSESSEE FILED THE COMPLETE DETAILS OF THE REIMBURS EMENT AND COPIES OF THE RESPECTIVE INVOICE RAISED BY SUCH PARTIES ALONG WITH THE SUPPORTING IN VOICES ALONG WITH THE SUBMISSION DATED 08.10.2014, THE LD. CIT(A) HAS ACCEPTED THE SUBMISS ION OF THE ASSESSEE THAT THE EXPENSES/PAYMENTS MADE BY THE ASSESSEE WHEREIN THE NATURE OF REIMBURSEMENT WITH NO ELEMENT OF INCOME WHICH IS CHARGEABLE TO TAX AND AL SO NO PART OF SUCH PAYMENT WAS MADE BY 11 ITA NO.641/KOL/2017 NISASIN ABC LOGI STIC PVT. LTD, AY- 2010-11 THE ASSESSEE TOWARDS CARRYING OF ANY WORK/SERVICE B Y THE SAID PARTIES. THE PAYMENTS WERE IN THE NATURE OF TAXES ETC. WHICH WAS PAID BY THE R ESPECTIVE PARTIES ON BEHALF OF THE ASSESSEE WHERE NO WITHHOLDING OF TAXES IS NECESSARY. THE LD . CIT(A) HAD TAKEN NOTE OF THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF H IGHTENSION SWITCHGEARS PRIVATE LIMITED VS. CIT, ITA 8 OF 2011, WHEREIN IT WAS HELD BY THE HONBLE HIGH COURT THAT TDS IS NOT REQUIRED TO BE DEDUCTED ON THE AMOUNT REIMBURSED TO THE SUPPLIERS/VENDOR. WE NOTE THAT THE SAID AMOUNT OF REIMBURSEMENTS WERE MADE PRIMARILY T O TWO PARTIES M/S. SIDDESSUR SEN & CO. (MERCHANTS) PRIVATE LIMITED AND M/S. DIVNA SHI PPING & CLEARING AGENCY. TAKING NOTE OF THE SAMPLE INVOICE FILED BEFORE US, WE AGRE E WITH THE VIEW TAKEN BY THE LD. CIT(A) THAT THE EXPENSES/PAYMENTS WERE IN THE NATURE OF RE IMBURSEMENT WITH NO ELEMENT OF INCOME CHARGEABLE TO TAX IN INDIA OR NO PART OF SUCH PAYME NT WAS MADE TOWARDS CARRYING ON ANY WORK BY THE PARTIES /VENDORS AND, THEREFORE, TAXES NEED NOT TO BE WITHHELD BY ASSESSEE ON SUCH PAYMENTS SO, WE CONFIRM THE DECISION OF THE LD . CIT(A). THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 10. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL, 2019 SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 5 TH APRIL, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ACIT, CIRCLE-8(2), KOLKATA 2 RESPONDENT M/S. NISSIN ABC LOGISTIC PVT. LTD., 46C, RAFI AHMED KIDWAI ROAD, KOLKATA-700 016. 3. 4. CIT(A)-12, KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR