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Pr. CIT Versus The Bank of Tokyo Misubishi UFJ Ltd.

2016 (4) TMI 817 - DELHI HIGH COURT

Interest paid to the HO and interest received from Indian branches - Held that:- This issue appears to be covered against the Revenue by the decision of the Calcutta High Court dated 23rd December 2010 in ABN Amro Bank(2010 (12) TMI 340 - CALCUTTA HIGH COURT ). This Court declines to frame any question on this issue of interest paid to the HO as well as the interest received from the Indian branches.

Deferred bank guarantee commission - Held that:- This issue appears to be covered in .....

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e it held that the loan agreements filed as additional evidence has to be considered for arriving at the correct taxability of interest.In that view of the matter, no substantial question of law arises for consideration of this Court.

Applicability of Section 115JB - Held that:- The ITAT has after an elaborate discussion had come to the conclusion that the Assessee's claim for lower tax will have to be accepted because Section 115JB is subject to Section 90(2) of the Act and the taxab .....

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n terms of special acts that they were governed by, and therefore there were no computation provisions as regards such banking companies. The change brought out by Section 115JB was therefore not retrospective.The reasoning and the conclusion of the ITAT on this issue appears to suffer from no legal infirmity. Consequently, the Court declines to frame any question on this issue as well. - ITA 604/2015, ITA 605/2015 - Dated:- 8-4-2016 - S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Mr. .....

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is a company incorporated in Japan and is resident of Japan within the meaning of Article 4 of the Double Taxation Avoidance Agreement ( DTAA ) between India and Japan. It is stated that during the relevant AYs under consideration, the Assessee was engaged in banking operations in India mainly catering to the requirements of Japan-based corporate and individual clients. These included Japanese companies and joint ventures in India and the Japanese expatriates working in those companies and deput .....

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brought forward losses. The returns were picked up for scrutiny and a draft assessment order was passed by the Assessing Officer ( AO ) on 23rd December 2009 as far as AY 2007-08 was concerned and on 27th December 2011 as far as AY 2008-09 was concerned. The additions made by the AO mainly pertained to the following: (i) On account of salaries paid in Japan to expatriates of the Assessee over and above the salary paid in Indian rupees by the branches in India which were routed through profit an .....

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Applicability of Section 115JB of the Act relating to the minimum alternative tax ( MAT ), which was held applicable to the Assessee as it was having a PE in India. 4. Aggrieved by the above assessment order, the Assessee filed objections before the Dispute Resolution Panel ( DRP ). For AY 2007-08, the DRP confirmed the order of the AO by order dated 24th September 2010 which was subsequently modified/rectified on 28th October 2010. As regards AY 2008-09, the DRP passed an order on 19th Septembe .....

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peals, the questions of law that have been urged by the Revenue concern the additions made in the final assessment order of the AO, which have been deleted by the ITAT. 8. This Court has heard the submissions of Mr. Dileep Shivpuri, learned Senior counsel for the Revenue and Mr. Percy Pardiwala, learned Senior counsel appearing for the Assessee. Salaries paid to expatriates 9. The first question urged concerns the payment of salaries to the expatriates. In deciding this issue in favour of the As .....

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expenses can be allocated to any other branch of the HO and that there was no dispute with regard to the non-applicability of Section 44C of the Act. 10. This Court has perused the order of the Bombay High Court in Emirates Commercial (supra) where on identical facts, the issue was decided in favour of the Assessee. This order of the Bombay High Court has been affirmed by the Supreme Court by order dated 26th August 2008 in Commissioner of Income Tax v. M/s Emirates Commercial Bank Ltd., which .....

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h Court and decided the question in favour of the Assessee. 13. On this issue, the Court further finds that the order of the Calcutta High Court dated 17th November 2014 in ITA No. 175 of 2004 (Bank of Tokyo-Mitsubishi Ltd. v. Director of Income Tax, International Taxation, Mumbai) has also decided this issue in favour of the Assessee by following its judgment of ABN Amro Bank(supra). The two specific questions urged by the Assessee in that case were answered in its favour: (i) Whether interest .....

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inst the judgment of the Calcutta High Court in ABN Amro Bank(supra) was dismissed by the Supreme Court on 3rd August 2012. 15. Accordingly, this Court declines to frame any question on this issue of interest paid to the HO as well as the interest received from the Indian branches. Deferred bank guarantee commission 16. This issue appears to be covered in favour of the Assessee by the decision of the Calcutta High Court in CIT v. Bank of Tokyo Ltd. (1993) 71 Taxman 85 (Cal). 17. Accordingly, thi .....

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