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2014 (4) TMI 733 - AT - Income TaxAllowability of deduction u/s 44C of the Act – Head office expenses – Held that:- The expatriates are paying full tax on their global salary in India - The expenses incurred by the Head Office is an expenses of the branch as the expatriates working in India are rendering services to the branch in India – Relying upon Kedarnath Jute Manufacturing Company Limited Versus Commissioner of Income-Tax (Central), Calcutta [1971 (8) TMI 10 - SUPREME Court] - there is no requirement for raising debit note or voucher by the head office on the branch for claiming deduction u/s 44C of the Act – thus, there was no infirmity in the order of CIT(A) deleting the disallowance of expatriate salary – Decided against Revenue. Deletion of disallowance u/s 40(a)(ia) of the Act – Held that:- The decision in Abn Amro Bank NV. Versus Assistant Director Of Income-tax, International Taxation-i. [2005 (8) TMI 294 - ITAT CALCUTTA-E ] followed - interest paid by the Indian Branch of the assessee bank to its overseas head office is not chargeable to tax in India - the provisions of Section 195 consequently would not be attracted in case of such payment of interest by the Indian Branch to overseas Head Office and the question of disallowance of the said interest by invoking the provisions of Section 40(a)(ia) does not arise – thus, the order of the CIT(A) upheld – Decided against Revenue. Condonation of delay - Whether the delay in filing of appeal by the assessee was on account of sufficient reasons or not – Held that:- In matters concerning the filing of appeals, in exercise of the statutory right, a refusal to condone delay can result in a meritorious matter being thrown out at the very threshold which would lead to miscarriage of justice - The judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so – Relying upon Collector, Land Acquisition vs. Mst. Katiji & Ors. [1987 (2) TMI 61 - SUPREME Court] and Vedabai Alia Vaijayanatabai Baburao Patil vs. Shantaram Baburao Patil [2001 (7) TMI 117 - SUPREME Court] - the court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression 'sufficient cause', the principle of advancing substantial justice is of prime importance - the expression "sufficient cause" should receive liberal construction – thus, the delay is condoned in the interest of substantial justice. Interest income earned by head office added in branch office – Held that:- The decision in Deputy Director of Income-tax (International Taxation) -4(1) Versus Mizuho Corporate Bank Ltd. [2012 (9) TMI 193 - ITAT MUMBAI] followed - interest paid by Indian branch of the assessee bank to its overseas head office is not chargeable to tax in India - the provisions of sec.195 consequently would not be attracted in case of such payment of interest by the Indian Branch to overseas Head office – thus, the order of the CIT(A) upheld – Decided against Revenue.
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