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"21. The appellant has submitted further written submissions vide letter dated 20- 03-2012 against the 'remand report issued. I have considered the submissions made by the appellant and the Assessing Officer's comments in the remand report. It is observed that out of the various chargeback payment made by Timken India, the Assessing Officer has identified chargeback receipts in the nature of Equipment Maintenance, Purchase of Software, Consultancy Charges, Salary Payments and Training Expenses as taxable on the contention that they indicate that some services were rendered by Timken USA to Timken India within holistic framework of service agreement.

23. The Assessing Officer in the remand report has observed that the above payments made by Timken India Ltd. are not in the nature of day to day activities and the payments stand in same footing as home office allocation as taxable in India as fees for included services. The observations of the Assessing Officer that the chargeback payments stand in same footing as home office allocations and hence liable to tax as fees for technical services does not appear to be fully true & correct since the chargeback payment represents services provided by third party in which appellant acted as conduit and claimed as reimbursement by the appellant in some cases and in others it is the allocation of expenses on proportionate basis whereas home office expenses represented services given by the appellant directly under service agreement dated 02-08-2000 to TIL.

20. The Assessing Officer in the remand report has observed that the above payments made by Timken India Ltd. are not in the nature of day to day activities and the payments stand in same footing as home office allocation as taxable in India as fees for included services. The observations of the Assessing Officer that the chargeback payments stand in same footing as home office allocations and hence liable to tax as fees for technical services does not appear to be fully true & correct since the chargeback payment represents services provided by third party in which appellant acted as conduit and claimed as reimbursement by the appellant in some cases and in others it is the allocation of expenses on proportionate basis whereas home office expenses represented services given by the appellant directly under service agreement dated 02-08-2000 to TIL.

18. The Assessing Officer in the remand report has observed that the above payments made by Timken India Ltd. are not in the nature of day to day activities and the payments stand in same footing as home office allocation as taxable in India as fees for included services. The observations of the Assessing Officer that the chargeback payments stand in same footing as home office allocations and hence liable to tax as fees for technical services does not appear to be fully true & correct since the chargeback payment represents services provided by third party in which appellant acted as conduit and claimed as reimbursement by the appellant in some cases and in others it is the allocation of expenses on proportionate basis whereas home office expenses represented services given by the appellant directly under service agreement dated 02-08-2000 to TIL.