KPMG India (P.) Ltd. v. Asstt. CIT

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The Tax Publishers2013 TaxPub(DT) 1719 (Mum-Trib) : (2013) 142 ITD 0628 Income Tax Act, 1961 --TDS--Disallowance under section 40(a)(i) Payment to non-resident towards professional charges and reimbursement of expenses--Assessee made certain payments to non-residents towards professional charges for, services rendered and reimbursement of expenses. Assessing officer, however, treated same as royalty payment and disallowed payment under section 40(a)(i) for non-deduction of TDS. Commissioner (Appeals), however, allowed assessee's appeal and deleted disallowance of professional charges, however, he sustained deletion of reimbursement of expenses as same was not supported with any evidence. *Held:* Rightly so. Commissioner (Appeals) was justified in his action in view of decision of Tribunal in assessee's own case for assessment year 2001-02. Representative of both the sides have agreed that this issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case for the earlier assessment year 2001-02 rendered vide its dated 8-6-2012. [Para 7] As the issue involved in the year under consideration as well as the material facts relevant thereto are similar to that of assessment year 2001-02, respectively follow the decision of Coordinate Bench of the Tribunal rendered in assessee's own case for assessment year 2001-02 and, uphold the impugned order of the Commissioner (Appeals) deleting the disallowance made by assessing officer under section 40(a)(i) to the extent of Rs. 40,83,558. [Para 8] As regards the remaining disallowance of Rs. 43,546 in respect of payment made to KPMG Singapore, it is observed that the same was confirmed by the Commissioner (Appeals) on the ground that the claim of the assessee of having made the said payments towards reimbursement of expenses was not supported by any evidence. Since nothing has been brought on record on behalf of assessee to rebut or controvert this finding of the Commissioner (Appeals), there was no justifiable reasons to interfere with the impugned order of the Commissioner (Appeals) on this issue. [Para 9] Income Tax Act, 1961 Section 40(a)(i) Income Tax Act, 1961 Section 9(1)(vi) Income tax Act, 1961 --Deduction under section 30--Current repairs, rent, etc. Repair and maintenance of office premises--Assessee-company claimed repairs and maintenance expenses which were stated to be paid to office attendants for their services utilized from time-to-time to clean and maintain office premises. Assessing officer disallowed entire expenses due to difficulty in verification and authenticity of same. *Held:* Not proper. For difficulty in verification of expenses entire expenses could not be disallowed but it would be fair to disallow 10 per cent of expenses. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1719 (Mum-Trib) : (2013) 142 ITD 0628

Income Tax Act, 1961

--TDS--Disallowance under section 40(a)(i) Payment to non-resident towards professional charges and reimbursement of expenses--Assessee made certain payments to non-residents towards professional charges for, services rendered and reimbursement of expenses. Assessing officer, however, treated same as royalty payment and disallowed payment under section 40(a)(i) for non-deduction of TDS. Commissioner (Appeals), however, allowed assessee's appeal and deleted disallowance of professional charges, however, he sustained deletion of reimbursement of expenses as same was not supported with any evidence. Held: Rightly so. Commissioner (Appeals) was justified in his action in view of decision of Tribunal in assessee's own case for assessment year 2001-02.

Representative of both the sides have agreed that this issue is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case for the earlier assessment year 2001-02 rendered vide its dated 8-6-2012. [Para 7] As the issue involved in the year under consideration as well as the material facts relevant thereto are similar to that of assessment year 2001-02, respectively follow the decision of Coordinate Bench of the Tribunal rendered in assessee's own case for assessment year 2001-02 and, uphold the impugned order of the Commissioner (Appeals) deleting the disallowance made by assessing officer under section 40(a)(i) to the extent of Rs. 40,83,558. [Para 8] As regards the remaining disallowance of Rs. 43,546 in respect of payment made to KPMG Singapore, it is observed that the same was confirmed by the Commissioner (Appeals) on the ground that the claim of the assessee of having made the said payments towards reimbursement of expenses was not supported by any evidence. Since nothing has been brought on record on behalf of assessee to rebut or controvert this finding of the Commissioner (Appeals), there was no justifiable reasons to interfere with the impugned order of the Commissioner (Appeals) on this issue. [Para 9]

Income Tax Act, 1961 Section 40(a)(i)

Income Tax Act, 1961 Section 9(1)(vi)

Income tax Act, 1961

--Deduction under section 30--Current repairs, rent, etc. Repair and maintenance of office premises--Assessee-company claimed repairs and maintenance expenses which were stated to be paid to office attendants for their services utilized from time-to-time to clean and maintain office premises. Assessing officer disallowed entire expenses due to difficulty in verification and authenticity of same. Held: Not proper. For difficulty in verification of expenses entire expenses could not be disallowed but it would be fair to disallow 10 per cent of expenses.