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2010 (11) TMI 709 - AT - Income TaxDTAA - Disallowance - Administrative expense and overseas taxes paid - it was noticed by the Assessing Officer that the assessee has debited an amount of Rs. 85,36,04,000 in its profit and loss account in respect of overseas taxes paid, out of which Rs. 24,89,36,449 represented overseas tax liability which has remained unpaid - Learned counsel has also contended that in any event, we must allow deduction in respect of state Income-taxes paid in USA and Canada as relief is not admissible in respect of the same in respective tax treaties - It is important to bear in mind the fact that so far as section 91 is concerned, it does not discriminate between taxes levied by the Federal Governments and taxes levied by the State Government - on the facts of the present case and bearing in mind the fact that the Federal Income-tax in USA at the relevant point of time was lesser in rate at 35 per cent vis-a-vis 38.5 per cent Income-tax rate applicable in India, the admissible double taxation relief under section 91 will be higher than relief under the tax treaty - Decided against the assessee Regarding Administrative expense - in the case of Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT [2010 -TMI - 78448 - BOMBAY HIGH COURT), even prior to assessment year 2008-09, when Rule 8D was not applicable, “the Assessing Officer has to enforce the provisions of sub-section (1) of section 14A, (and) for that purpose, the Assessing Officer is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act - since the assessee has not incurred any expenses in earning this dividend income, no disallowance can be made under section 14A - Appeal is allowed for statistical purpose
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