The Mumbai Bench of the Income-tax Appellate Tribunal in the case of: Gemological Institute International Inc v. DCIT (ITA No. 4659/Mum/2014) and (ITA No. 385/Mum/2016) held that, the amounts received by the taxpayer were not taxed as technical service charges as reimbursement of training-related travel expenses, group insurance and other incidental expenses under a technical service contract. Referring to the transfer pricing study and the transfer pricing regulation, the Tribunal noted that there was no component of the profit that was embedded in the cost reimbursement and thus the reimbursements were not taxable.
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