Bombay High Court
Pr. Commissioner Of Income Tax-1 vs Goldmansach (India) Finances Pvt Ltd on 26 February, 2019
Bench: Akil Kureshi, M.S.Sanklecha
itxa-1742-2016.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 1742 OF 2016
The Pr. Commissioner of Income Tax-1 .. Appellant.
v/s.
Goldmansach (India) Finances Pvt. Ltd., .. Respondent.
Mr. Suresh Kumar, for the Appellant.
Mr. J. D. Mistri, Sr. Advocate with Mr. Ojas Gole i/b. MINT & Confreres,
for the Respondent.
CORAM: AKIL KURESHI &
M.S.SANKLECHA, JJ.
DATE : 26th FEBRUARY, 2019.
P.C:-
The Revenue is in Appeal against the Judgment of the Income Tax Appellate Tribunal (in short "the Tribunal"), raising the following questions for our consideration:-
" Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in deleting the disallowance u/s. 40(a)(ia) on account of non deduction of tax at sources on account of reimbursement of expenses?"
2 The Revenue objects to the deletion of disallowance made by the Assessing Officer under Section 40(a) (ia) of the Income Tax Act, 1961 (in short "the Act") on the ground that, the assesssee while making payment of Rs.1.73 Crores (rounded of) had not deducted tax at source, though required in law.
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3 The Tribunal, however, held that, the amount in question was
by way of reimbursement of costs. The Tribunal held that Assessee had paid such sums towards administrative costs such as the employee cost, rent, finance and legal corporate recharge etc. The Tribunal noted that, GSIPL had provided services to the assessee by deploying its employees for such work and the cost was for reimbursement for such expenses besides other related expenditure. Revenue was unable to dislodge these findings of fact recorded by the Tribunal. That being the position, we must proceed on the basis that the payment in question was in the nature of reimbursement of costs. As held by the Supreme Court in the case of Director of Income Tax v/s. A. P. Moller Maersk A. S. reported in 78 taxmann.com 287 and consistently followed by this Court in the number of decisions, liability to deduct tax at source in such a case, would not arise. No question of law arises.
4 In the result, Appeal dismissed.
(M.S.SANKLECHA,J.) (AKIL KURESHI,J.)
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