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2003 (7) TMI 6 - BOMBAY HIGH COURTInterpretation of section 44C - "1. Whether the Tribunal was right in holding that the entire head office expenditure of Rs. 21.07 lakhs was allowable under section 37(1), as section 44C of the Income-tax Act was not applicable in the case of the assessee?" - whether the Department was right in contending that if one out of the three parameters contained in clauses (a), (b) and (c) of section 44C fails, then the Department could ignore that parameter and grant allowance restricted to deductions under the remaining two parameters. - In fact, clause (b) has been subsequently deleted by the Legislature in order to bring all the non-residents on par in the matter of deduction of head office expenditure. This deletion shows that none of the parameters could be ignored and, therefore, the Legislature had to delete clause (b). In the circumstances, we answer the above quoted question in the affirmative, i.e., in favour of the assessee and against the Department – further, Tribunal was right in holding that a portion of salary and perquisites allowable under the head 'Interest on securities' under section 20 of the Act should be reduced from computation of disallowance under section 40A(5)
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