Held that no material or evidence had been brought on record by the Revenue to substantiate its claim that the assessee rendered any managerial, consultancy or technical services to the Indian associated enterprises through the expatriates in furtherance of its business in India. The payment made by the Indian associated enterprises was purely reimbursement of the expatriates’ salary costs, which the assessee had cross-charged by raising debit notes on the Indian associated enterprises. It could not be regarded as “fees for technical services” in the hands of the assessee as it was taxable as salary in the hands of the expatriate employees, who worked under the direct control and supervision of the Indian associated enterprises, and during the entire period of secondment, the associated enterprise were the real and economic employer of these expatriates. The expatriates had offered the entire salary income to tax in their respective returns of income as supported by form 16. As a result, the receipts were in the nature of employees’ salary

reimbursement cost, not having any element of income and not taxable in India as fees for technical services under the Double Taxation Avoidance Agreement between India and Japan . Consequently, the addition made on account of assessee’s cross-charge raised on its Indian associated enterprises is deleted.(AY.2017-18