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2012 (8) TMI 329 - AT - Income TaxInterest paid to the Head office of the assessee bank as well as its overseas branches by the Indian branch - dis-allowance - assessee being commercial bank having its Head Office in France - Held that:- Issue stands squarely covered by the decision rendered in case of Sumitomo Banking Corp. Mumbai (2012 (4) TMI 80 - ITAT MUMBAI ) wherein it was held that interest paid to the head office of the assessee bank as well as its overseas branches by the Indian branch cannot be taxed in India being payment to self which does not give rise to income that is taxable in India as per the domestic law or even as per the relevant ‘tax treaty’ - Decided in favor of assessee. Dis-allowance u/s 14A of expenditure incurred in earning exempt income - Held that:- Since dividend income accrued from the investment out of its own funds, hence dis-allowance has been rightly deleted - Decided in favor of assessee. Guarantee commission offered to tax on accrual basis - addition - method of accounting - Held that:- Income from deferred guarantee commission did not accrue or arise in the year in which guarantee agreements were entered. It was held in case of CIT vs. Bank of Tokyo that such income should be spread over the period to which the guarantee commission related and should be assessed proportionately. Therefore, system of accounting regularly followed by the assessee should not be disturbed and accept the income as declared by the assessee following the same method - Decided in favor of assessee.
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