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2015 (4) TMI 1251 - HC - Income TaxAppeal admitted on:- (1) Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that interest received by the assessee, out of funds placed with its HO and other overseas branches, is not taxable in India? (2) Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that interest payable by the Indian branch / permanent establishment of the foreign bank to its head office and other overseas branches, is deductible in computing the total income ? (3) Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that provisions of section 40(a)(i) are not applicable on interest payable by the Indian branch / permanent establishment of the foreign bank to its head office and other overseas branches, as it does not give rise to any income although as per the deeming provisions of article 7 of the concerned DTAA the income of the branch is to be computed as a separate and a distinct identity from the main entity and for the computation of income the provisions of domestic law are applicable ? Addition on account of deferred guarantee commission - ITAT not deciding the case on merits and setting aside the matter on the issue to the assessing officer - Held that:- The matter has been sent back to the authority, lower to the Tribunal for a decision on merits. Merely because a order passed in the case of Bank of Bahrain and Kuwait [2010 (8) TMI 578 - ITAT, MUMBAI] has been brought to the notice of the parties and the assessing officer, does not necessarily mean that the issue will not be decided by him in accordance with law. We do not see any basis for entertaining this question. Addition u/s 14A - Held that:- ITAT was justified in holding that no interest section 14A for earning of interest income on tax free bonds as the assessee has sufficient interest free funds available. Setting aside the matter to the assessing officer on the issue of applicability of provisions of section 115JA to foreign companies - No substantial question of law.
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