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08-01-2019, Pernod Ricard India, Section 201(1), 9, 195, Tribunal Delhi

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2 months 1 week ago #8304 by amit
Section - 201(1), 9, 195
Order Date - 08-01-2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Pernod Ricard India Pvt. Ltd.
Respondent - ITO
Justice - N. K. BILLAIYA AM & SUCHITRA KAMBLE JM
Citation - 119Taxpundit101
Appeal No. - ITA No.6640/DEL/2013
Asstt. Year - 2008-09

Order

PER : N. K. BILLAIYA

This appeal by the assessee is preferred against the order of the CIT (A)- XXIX, New Delhi dated 11.09.2013 pertaining to A. Y. 2008-09.

2. The quarrel relates the payments made by the assessee to non-resident on which no tax was deducted at source and the Assessing Officer was of the firm belief that the payments made to non-resident were subject to withholding tax in India.

3. The payments made to non residents can be summarised as under :-

(a) Reimbursement of expense in the nature of training expenses, meeting expenses, relocation expenses and accommodation expenses.

(b) Reimbursement of expenses in the nature of consultancy expenses, legal expenses, seminar expenses; and

(c) Payments in the nature of reimbursement of software and license renewal

4. The Assessing Officer came to the conclusion that such payments made by the assessee attracted withholding tax provisions and as such the assessee was required to deduct tax at source on such payments rendering the assessee as “assessee in default” section 201 (1) of the Act. By treating the assessee as assessee in default the Assessing Officer levied a tax demand u/s 201 (1) and interest u/s 201(1A) of the Act.

5. Aggrieved, the assessee agitated the matter before the CIT(A) but without any success.

6. Before us the counsel for the assessee vehemently stated that all the payments made to non-resident were reimbursement of travel expenses, research expenses and seminar, training and conference expenses. It is the say of the counsel that all the reimbursement are duly supported by the invoices alongwith
certificate of the Chartered Accountant accordingly reliance was placed on the decision of Hon’ble High Court of Bombay in the case of Krupp Udhe GmbH 354 ITR 173. Reliance was also placed on the decision of the Hon ble High Court of Delhi in the case of Industrial Engineering Projects Private Limited 202 ITR 1014.

7. Per contra the DR strongly supported the findings of the lower authorities.

8. We have given a thoughtful consideration to the orders of the authorities below. The quarrel can be understood from the following charts:-

9. It is a settled principal of law that any payment made to non-resident become subject to withholding tax u/s 195 of the Act only when it is chargeable to tax in India. As per the copy of the agreement placed at pages 1 to 6 of the paper book it was agreed by the assessee to reimbursem travelling expense and incidental expenses on actual basis. The invoices raised by Jean Manuel Jackquinot which is at page 7 clearly show that the same is for travelled expenses / visa charges/ car parking

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