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DCIT 1(2) R. No. 535, 5th Floor, Aayakar Bhavan M.K. Road Mumbai Vs. M/s. Mahyco Mosanto Biotech (I) Limited. 5th Floor, Ahura Centre, 96, Mahakali Caves Road, Andheri (East) Mumbai- 400 093
December, 25th 2014
                 MUMBAI BENCH "B", MUMBAI
                      ITA No. 1840 /Mum/2013
                      Assessment Year: 2009-10

        DCIT 1(2)                          M/s. Mahyco Mosanto
        R. No. 535, 5th Floor,             Biotech (I) Limited.
        Aayakar Bhavan M.K.                5th Floor, Ahura Centre,
        Road Mumbai                  Vs.   96, Mahakali Caves
                                           Road, Andheri (East)
                                           Mumbai- 400 093
                                           PAN:AACCP 2478 C
               (Appellant)                          (Respondent)

                      Assessee by : Shri Kirit Kamdar
                       Revenue by : Shri S.J. Singh

                   Date of hearing    : 10.12.2014
                    Date of Order     : 22.12.2014


      The aforesaid appeal has been preferred by the Revenue, against
order dated 21.12.2012, passed by the Ld.CIT(A)-2, Mumbai, for the
quantum of the assessment passed u/s 143(3) for the A.Y. 2009-10, on
the following grounds:-

      "Whether on the facts and in the circumstances of the case and
      in alw, the Ld.CIT(A) erred in deleting the disallowance u/s
      40(a)(ia) relying on the ITAT's decision for A.Y. 2008-09 and not
      on the fact of the case of the assessee?"

2.    At the outset the learned counsel submitted that the issue raised
in the ground of appeal squarely covered by the decision of the Tribunal
                                                                      ITA No. 1840 /Mum/2013
                                         2                 M/s. Mahyco Mosanto Biotech (I) Limited.
                                                                     Assessment Year: 2009-10

assessee's own case for the A.Y. 2008-09 passed in ITA No.
5842/Mum/2012 order dated 30.11.2012. Ld. DR also admitted that the
issue involved is covered by the decision of the Tribunal.

3.      The brief facts are that, the assesse company is a joint venture
between Mahyco Seeds Ltd. and M/s. Mosanto Holdings Pvt. Ltd, each
holding 50% of the equity share capital. The assesse company is
engaged in promotion, marketing and sub-licensing of the trait
technology and supporting the sub licenses through market research
and advertising, for which the appellant receives royalty and technical
fees from sub licenses. During the course of the assessment
proceedings, the assessing officer noted that on the following
payment/reimbursement of expenses, the assesse has not deducted TDS
and therefore, disallowance u/s 40(a)(ia) is called for.

     i) Reimbursement of expenses to group
        Companies as per para 3.1.1                   Rs.12,34,99,792
     ii) Non-deduction of TDS for payments under
       Head "advertising & promotion" as per para 3.1.2 Rs. 2,21,99,066

     iii) Non deduction of TDS on consultancy &
        Professional fees as per 3.1.3                 Rs.              68,062
The assessing officer held that and the assesse has made payment to
the group companies as per the agreement in the required services, for
which the assesse was liable to deduct TDS u/s 194C and therefore, non
deduction of TDS leads to disallowance u/s 40(a)(ia).
                                                                      ITA No. 1840 /Mum/2013
                                      3                    M/s. Mahyco Mosanto Biotech (I) Limited.
                                                                     Assessment Year: 2009-10

4.    Before the Ld.CIT(A), detail submissions were made which has
been dealt by the Ld.CIT(A) from pages 5 to 13 of the appellate order.
The Ld.CIT(A) held that similar disallowance was made earlier which has
been decided by the Tribunal in assessee's own case for the A.Y. 2008-
09, therefore, following the same he held that the provision of TDS are
not applicable to the reimbursement of expenses made by the assesse
to its associate concern.

5.    After considering the relevant facts, which are similar to the
assessment year 2008-09, we find that, this issue has been decided by
the Tribunal in the following manner:-

      "We have carefully considered the rival submissions in the light of
      material placed before us. We have carefully gone through the
      assessment order. The AO did not dispute the fact that the
      impugned amount was in the nature of reimbursement expenses
      on cost to cost basis. If it is so, according to the ratio of the
      decision rendered by Co-ordinate, Bench in the case of ACIT Vs.
      J.B.Boda Surveyors Pvt. Ltd.(supra) , it has to be held that the
      disallowance cannot be made as it has not been shown or
      established that aforementioned payments were made by the
      assessee to the aforementioned group concerns against any
      contract work carried out by them for assessee. In the case of
      reimbursement of expenses, the expenditure incurred is related
      to the person who has not made the original payment. The
      payment of expenditure is made by "X'" party on behalf of "Y"
      party and later on the same is reimbursed to "X" party by "Y"
      party, the expenditure is pertaining to "Y" party and not
      pertaining to "X" party. Therefore, applying the ratio laid down in
      the case of ACIT relied upon in the case of ACIT Vs. Boda & Co.
      Pvt. Ltd. in ITA No.4251/M/2009 vide order dated 30/3/2010,
      relied a upon in the case of ACIT Vs. J.B.Boda Surveyors Pvt.
      Ltd., the issue is decided in favour of assessee. The relevant
      observations have already been reproduced above. In view of the
      above discussion, Ground No.1 of the assessee is allowed."
                                                                                      ITA No. 1840 /Mum/2013
                                                 4                         M/s. Mahyco Mosanto Biotech (I) Limited.
                                                                                     Assessment Year: 2009-10

Following the earlier year's precedence, the issue is decided in favour of
the assesse and the ground raised by the department thus, stands
6.     In the result, the appeal filed by the Revenue is dismissed.

     Order pronounced in the open court on this 22nd day of
                      December, 2014.

                 Sd/-                                                                Sd/-
       (N.K. BILLAIYA)                                                  (AMIT SHUKLA)
     ACCOUNTANT MEMBER                                                JUDICIAL MEMBER

 Mumbai, Dated: 22.12.2014
Copy to: The   Appellant
         The   Respondent
         The   CIT, Concerned, Mumbai
         The   CIT(A) Concerned, Mumbai
         The   DR "B" Bench

                                          //True Copy//

                                                              By Order

                                                Dy/Asstt. Registrar, ITAT, Mumbai.
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