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1 - 10 of 12 (0.80 seconds)Section 147 in The Income Tax Act, 1961 [Entire Act]
The Indian Penal Code, 1860
Section 9 in The Income Tax Act, 1961 [Entire Act]
Section 148 in The Income Tax Act, 1961 [Entire Act]
Section 234D in The Income Tax Act, 1961 [Entire Act]
Cochin Refineries Ltd. vs Commissioner Of Income-Tax on 4 March, 1996
8. It is also pertinent to note that the fees for Included/Technical Services are
taxed on the Gross Amount. That is why the taxation rate is lower when
compared to the general rate of taxation. The fees for technical services are
taxed at a lower rate (and on gross basis) only to take care of the expenses to
be met in providing the technical services. Since the fees for technical services
are taxed on a gross basis, no expenses can be allowed as deduction. The
expenses met out by the assessee are nothing but the expenses of the services
provider in providing the services. Since expenses cannot be allowed while
taxing the fees for included services, the amount of reimbursement also should
be added with the fees for included services. Section 2(24)(iva) also considers
these payments as income of the services provider.
The Hon'ble Kerala High Court in the case of Cochin Refineries vs. CIT - 222 ITR
354 has held that the reimbursements of expenses are taxable. The facts and
the held portion as reported in the ITR is reproduced below:-
Everest Global Inc, New Delhi vs Dcit, New Delhi on 30 March, 2022
"11. From the above, we observe that the assessee provides the
administrative and day to day management services to the JIPL, this fact is
confirmed by the observation and relevant material placed before us that the
Indian entity JIPL does not have any support team and administrative set up to
carry out the business independently. All the support services are provided by the
intra-group entities and particularly, the administrative and day to day
management services are provided by the assessee. The Ld.CIT(A) has confused
with the two schedules viz., Schedule A and Schedule B and came to wrong
conclusion by observing the bill copies submitted before him for reimbursement
of certain charges for which the assessee has outsourced certain services for the
whole group and whatever the services are utilized by the assesse are alone
charged to the JIPL. Therefore, in our considered view, the services provided by
the assesseein order to support and provide the administrative and day to day
management services to the JIPL are in the nature of group support services.
These services are not to fall under the category of FIS or FTS. This is supported by
the decision of ITAT Delhi bench in the case of Everest Global Inc. v. DDIT (2022)
136 taxmann.com 404, it is held as under: -
M/S. Global Cricket Corporation Pte ... vs Adit (I.T) - 3(2), Mumbai on 14 December, 2022
In Shell India Markets (P.) Ltd. (supra), the applicant is an Indian company, it has
a network of retail fuel stations in India. SIPCL is a group company of assessee
incorporated in UK. It is in the business of providing consultancy services to
various group companies. The applicant has entered into Cost Contribution
Agreement (CCA) with SIPCL for provisions of General Business Support Services
(BSS). While providing General BSS, SIPCL works closely with the employees of the
applicant and supports/advices them. Thus, General BSS is made available to the
applicant.