Mumbai ITAT rules that
amount received by assessee ( a US company engaged in grading and
certification of diamonds) on account of reimbursement of travel expenses,
group health insurance and other incidental expenses in connection with the
assignment under training and technical service Agreement (‘TTA’), not FTS
for AYs 2009-10 and 2011-12; Assessee had entered into TTA for training the
employees of the Indian group company and providing technical services for the
implementation of grading policies, procedures and processes, further separate
debit notes were raised for training & technical services and
reimbursement; Rejects Revenue’s stand that the total amount received by
assessee including reimbursement would constitute FTS; Referring to
the TTA, ITAT notes that assessee was entitled to receive by way of fee only
the amount incurred by towards cost to ‘employ’ individuals plus mark-up of
6.5%, remarks that “the expression cost to ‘employ’ individuals is different
from the expression cost incurred to ‘depute’ a person”; Rules that the cost of
employment would include only internal costs incurred by organisation to employ
individual, whereas any cost incurred over and above that to depute the
individual for a particular assignment (i.e. travel, insurance etc.), would be
external cost, not includible as FTS, relies on SC ruling in A.P. Moller Maersk
A/S:ITAT
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