Assessee company entered into an agreement with company, namely, HSC, USA vide project agreement for manufacturing products for their new engine program called pure power program,  However, Indian facility of assessee was not established in its full strength during period. In order to get this work done, assessee approached its sister concern based in USA which was well equipped with necessary facilities for carrying out manufacturing work.  Invoices were raised by sister concern to assessee and then reimbursement of expense incurred by sister concern towards pure power project was made by assessee. The Assessing officer disallowed the amount on account of failure to deduct tax at source. CIT(A) deleted the disallowance. On appeal the Tribunal held that  since there was no element of income in alleged payments made by assessee to its sister concern and it was purely reimbursement of expenses incurred by sister concern towards cost of products manufactured by sister concern on behalf of assessee, no tax at source was deductible by assessee on alleged payments to sister concern.