Pure Reimbursement does not give rise to any Income: ITAT [Read Order]
![Pure Reimbursement does not give rise to any Income: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2022/01/Pure-reimbursement-income-ITAT-Taxscan.jpg "Pure Reimbursement does not give rise to any Income: ITAT [Read Order]")
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench has held that pure reimbursement does not give rise to any income. The assessee, M/s. Synamedia is a non-resident foreign company incorporated in the United Kingdom. It is in the business of supplying open digital technology and services to digital pay television (pay-TV) platform operators and content providers. The assessee...
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench has held that pure reimbursement does not give rise to any income.
The assessee, M/s. Synamedia is a non-resident foreign company incorporated in the United Kingdom. It is in the business of supplying open digital technology and services to digital pay television (pay-TV) platform operators and content providers. The assessee entered into agreement with its customers for supply of integrated hardware systems along with embedded software. The hardware is primarily in the form of viewing cards, Set-top-Box (STB) and other connected components, usually used in viewing television through satellite. The embedded software is required to run the hardware components. The assessee received the following sums in respect of supply of integrated hardware systems along with embedded software.
During the AY 2007-08, Assessee filed a NIL return of income. The return of income was processed under section 143(1) of the Income Tax Act, 1961 (`the Act') and the case was not picked for scrutiny under section 143(3) of the Act. Subsequently, the AO re-opened the assessment by issuing a notice under section 148 of the Act citing that certain third party receipts were not offered to tax in the return of income for AY 2007-08.
The coram of B.R.Baskaran and Beena Pillai has held that the Ld.AO proceeded on identical basis for the relevant assessment year, we are of the opinion that the entire addition in respect of international transaction needs to be looked into afresh having regards the principles laid down by various decisions cited and referred to by coordinate bench of this Tribunal hereinabove as well as the articles under the DTAA between India and UK. Needless to say that appropriate opportunity of being heard should be granted to assessee in accordance with law.
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