DCIT vs. Mahanagar Gas Ltd. ITAT Mumbai `B’ Bench Before R. C. Sharma (AM) and Mahavir Singh (JM) ITA No. 1945/Mum/2013 A.Y.: 2009-10. Date of Order: 15th April, 2016 Counsel for revenue / assessee: Sanjiv Jain / A. V. Sonde & P. P. Jayaraman

Facts
In the course of assessment proceedings, the Assessing Officer (AO) noticed from Schedule M forming part of P & L Account that the assessee had debited a sum of Rs. 193.46 lakh on account of secondment charges under the head `personnel cost’ but TDS had not been deducted on the same. He disallowed this sum u/s. 40(a)(ia) of the Act.

Aggrieved, the assessee preferred an appeal to CIT(A) who, relying on the decision of the co-ordinate bench in the case of IDS Software Solutions (India) Pvt. Ltd. 122 TTJ 410 (Bang.) and also the decision of the Bombay High Court in the case of CIT vs. Kotak Securities Ltd. (ITA No. 3111 of 2009) decided the appeal in favour of the assessee.

Aggrieved, the revenue preferred an appeal to the Tribunal.

Held
Upon going through the joint venture agreement entered into by the assessee with M/s GAIL and British Gas in respect of secondment charges paid by the assessee, it was observed that there was no mark up in payments made by them. Secondment agreement was entered into because the IPR rights were to remain with British Gas. The assessee also filed a letter from British Gas which clearly stated that all the taxes due in India of the employees seconded to the assessee have been deducted from salary paid to secondees and paid to the Government of India

The Tribunal observed that the issue is covered by the decision of ITAT Bangalore Bench in the case of IDS Software Solutions (India) (P.) Ltd. vs. ITO (supra). Following the ratio of the said decision, the Tribunal dismissed the appeal filed by the revenue.

The appeal filed by the Revenue was dismissed.