The Commissioner of Income Tax (International Taxation)-1, New Delhi v. M/s Expeditors International of Washington Inc.

1. Exemption is allowed, subject to all just exceptions.

2. The application stands disposed of. CM APPL. 62663/2025 (Condonation of delay of 420 days in re-filing)

3. For the reasons stated in the application, the delay of 420 days in refiling the appeal is condoned.

4. The application is disposed of.

5. The challenge in this appeal under Section 260A of the Income Tax Act, 1961 is to an order dated 09.02.2024 passed by the learned Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 2855/Del/2023 pertaining to the Assessment Year (‘AY’) 2021-22.

6. We find on findings from paragraph 6 onwards, the learned ITAT has allowed the appeal in favour of the assesee by stating as under:-

1464/Del/2022 for AY 2018-19 observed and held as under:-

6.[2] With respect to ground No. 3 relating to the addition of Rs. 7,68,26,193/- made by the Ld. AO representing reimbursement of global account management charges received by the assessee treating the same as FTS under the Act as well as India-USA DTAA, the Coordinate Bench of the Tribunal in its decision dated 02.05.2023 in ITA No. 355/Del/2023 for AY 2020-21 in turn relying on its decision dated 31.10.2022 in ITA No. 1464/Del/2022 for AY 2018-19 observed and held as under:-

“ 6.[3] With regard to ground No. 4 relating to the addition of Rs. 1,03,04,852/- made by the Ld. AO representing reimbursement of lease line charges received by the assessee treating the same as royalty under the Act as well as India-USA DTAA, the Coordinate Bench of the Tribunal in its decision dated 02.05.2023 in ITA No. 355/Del/2023 for AY 2020-21 in turn relying on its decision dated 31.10.2022 in ITA No. 1464/Del/2022 for AY 2018-19 observed and held under:-

considering the allowability of payment made towards lease line charges at the hands of assessee’s payer, the assessing officer had held that the payment made is in the nature of royalty, hence, the assessee was required to deduct tax at source. Since, the assessee has not done so, the assessing officer made disallowance under section 40(a)(i) of the Act. However, while deciding the issue in case of the payer, the Hon'ble High Court held that the payment made, being not in the nature of royalty, no disallowance under section 40(a)(i) of the Act can be made. Thus, in view of the decision of the Tribunal in assessee’s own case and the decision of the Hon'ble High Court in case of the payer, the addition made cannot be sustained. Accordingly, we delete it. This ground is allowed.”

7. It is, therefore, apparent that all the issues challenged by the assessee in ground Nos. 2, 3 and 4 relating to receipts on account of logistic support services, reimbursement of global account management charges and lease line charges respectively have been consistently decided in favour of the assessee in preceding AYs, the latest being the decision (supra) of the Coordinate Bench of the Tribunal in ITA No. 355/Del/2023 for AY 2020-21 wherein the Tribunal in turn relied upon the favourable decisions of the Coordinate Bench in preceding AYs prior to AY 2018-19. The Revenue has not brought to our notice any change in to facts and circumstances in the year under consideration. The Revenue has also not brought to our notice any other binding precedent on the issues under consideration. We, therefore, respectfully following the decision (supra) of the Co-ordinate Bench of the Tribunal in assessee’s own case, the facts being identical as admitted by both the parties, decide ground No. 2, 3 and 4 in favour of the assessee. Accordingly ground No. 2, 3 and 4 are allowed.