S.195: Deduction at source- Income deemed to accrue or arise in India- Amounts not deductible- Reimbursement of expenses of global management expenses, communication Uplink charges and other expenses provisions of neither section 195 nor 194J are applicable because such payments are not chargeable to tax at all hence cannot be disallowed .( S 9, 40(a)(i), 194J, 197 )

The assessee is in the business of supplying chain, management, logistics and freight forwarding that is movement of goods and cargo with in India or outside by road , rail air or ship. To undertake these activities , the assessee company has arrangement with its parent company which is foreign company for rendering global management services and VST uplinking enabling it to  have global communication net work. The  Assessing Officer did not  dispute the genuiness of these payments  but disallowed the expenses on the ground that  while remitting the aforesaid payment on its parent company  the assessee  had failed to deduct tax  at source  hence the  he disallowed the payment by applying the provision of section 40(a)(i). On appeal the  disallowance was deleted by the Commissioner (Appeals) and Tribunal.  On appeal by the revenue  the High Court following the ratio of decision in Van Oord ACZ India (P) Ltd v. CIT (2010) 323 ITR 130 (Delhi) (High Court), held that the assessee company has paid  Reimbursement of expenses  of global management expenses, communication Uplink  charges and other expenses provisions of neither section 195 nor 194J are applicable because  such payments are not chargeable to tax at all hence cannot be disallowed .(A.Y. 2004-05)

CIT v. Expeditors International (India) (P) Ltd (2012) 209 Taxman 18 (Delhi) (High Court)