2010-TIOL-NEWS-067, Dated :Sunday, March 21, 2010

DCIT, New Delhi Vs M/s Vestargaard Frendsen (India) Pvt Ltd (Dated: February 12, 2010)

Income Tax - AO treats the commission payment as bogus and makes additions - CIT (A) deletes it - Held, issue should also go back to the file of the AO for a fresh decision and the Assessee should furnish the confirmation from the Agencies and should also explain the discrepancy in the amount of sales.

AO rejects the claim of the Assessee regarding bad debts on the basis that the provisions of sec. 36(2) are not complied with - CIT(A) accepts this claim of the Assessee - Held, the CIT(A) has rightly accepted the claim of the Assessee that the two amounts are allowable as business loss. Revenue ground rejected. : DELHI ITAT;

2010-TIOL-18-ARA-IT + ey story.pdf

Ernst & Young (P) Ltd (Dated : March 19, 2010)

Income tax - Sec 9(1)(vii) - India-UK DTAA - Article 7, 13 - Applicant is a private limited company, engaged in providing consultancy services - applicant is a member of Ernst & Young Global which has member entities in various countries - Ernst & Young EMEIA Services Ltd is one of such entities incorporated under the laws of England and Wales - this non-resident entity provides support in various fields, and the costs incurred are allocated to all EY members and they reimburse it - whether the payments made by the applicant are fees for technical services under Article 13 of the DTAA - whether the sum receivable by the Ernst & Young EMEIA Services Ltd are fees for technical services u/s 9(1)(vii) of the I-T Act

Ernst & Young EMEIA Services provides support in various fields such as Area, Global and Market Development etc. to all the member entities of the EY organization so that they may gain access to standardized human, financial and other resources to ensure that consistent, high quality professional services are provided to the client base of all members of the EY organization. EMEIA, inter alia, provides Area Services, Market Development Support Services and Global Services as detailed in the Schedule to the Area Services and Market Development Agreement. Such support is provided from UK and it does not have any Permanent Establishment or fixed base in India. The terms and conditions under which all EY member entities would get such support from EMEIA are documented in the form of the Area Services and Market Development Agreement (for short, ‘the Agreement') which has been filed. Under the Agreement, costs incurred for providing the services are allocated to EY member entities and they reimburse such costs to EMEIA, UK. : AUTHORITY FOR ADVANCE RULING;