The assessee remitted payment to its parent company after tax deduction as directed by the Assessing Officer. Assessee filed appeal before CIT(A) under Section 248 of the Act for a declaration that assessee was not liable to deduct tax at source on payment to non-resident.

The CIT(A) rejected the appeal of the assessee. Tribunal held that the assessee though claimed to have reimbursed the cost incurred by the parent company to provide certain common services without any mark-up, however the claim was not substantiated. From the agreement it was difficult to ascertain whether they were in nature of fees for technical services “or” only reimbursement of cost.

Assessee relied upon the Certificate of D and contended that payment made to non-resident was only cost incurred by the parent company without and mark-up. However, the same was not supported by any evidence. Assessing Officer was directed to re-examine the issue as to applicability of Section 195 in respect of payment to non-resident in the light of Cost Sharing Agreement and Certificate issued by D and provisions of Section 9(1)(viii) read with DTAS between India and Germany. Relied: BASF India Ltd. v. Dy. CIT (International Taxation) [2019] 102 Taxmann.com 133 (Mumbai).(AY. 2015-16, 2016-17, 2017-18)