TMI Blog2012 (8) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... re that the assessee is a commercial bank having its Head Office in U.A.E. The assessee has two branches in India i.e. Mumbai and Bangalore. It is involved in normal banking activities including financing of foreign trade and foreign exchange transactions. During the course of assessment proceeding it was inter alia observed by the A.O. that the assessee has claimed Head Office expenses of ₹ 1,98,01,876/- based on the actual expenses incurred by the Head Office which are attributable to Indian branch. He further observed that the entire expenditure has been claimed by way of deduction on the ground that no restriction should be made in view of Article 7(3) of the treaty. However, the A.O. did not agree with the claim of the assessee and held that all the said expenditure, which are not debited to the books of accounts of the assessee and are executive and administrative in nature have to be treated as Head Office expenses in respect of which deduction is allowable only as per provisions of section 44-C of the Income Tax Act, 1961 (the Act). Accordingly he disallowed the same. On appeal the ld. CIT(A) following the appellate order for the assessment years 1997-98, 1998-99, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sumitomo Mitsui Banking Corp.(supra).and Lastly, from the above conclusions, it is held that computation of income and disallowance of expenses relating to head office cannot be made by invoking the provisions of Section 44C of IT Act. Thus, in view of the above conclusions, we hold that income of the PE of the assessee should be computed as business income after allowing all the expenses attributable to its business in India including the head office expenses. 7. In absence of any distinguishing feature brought on record by the Revenue, we respectfully following the order of the Tribunal (supra) delete the disallowance of ₹ 1,98,01,876/- made by the A.O. and sustained by the ld. CIT(A). The ground taken by the assessee is, therefore, allowed. Additional ground and C.O. No. 114/Mum/2004 (By assessee for A.Y. 2003-04): 8. The assessee in the additional ground and in the C.O. has challenged the A.O s action for applying the tax rate of 40% plus surcharge to the assessee s business income instead of 35% plus surcharge. 9. At the time of hearing the ld. counsel for the assessee very fairly submits that this issue stands covered against the assessee by the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. D.R. while relying on the order of the A.O. submits that since the A.O. has not examined the issue in the light of the provisions of section 14-A of the Act, therefore, the issue may be set aside to the file of the A.O. The reliance was also placed on the decision of the Tribunal in Dresdner Bank AG vs. Addl. CIT (2007) 108 ITD 375 (Mum). 15. On the other hand, the ld. counsel for the assessee submits that this issue also stands covered in favour of the assessee by the decision of the Tribunal in assessee s own case (supra), therefore, the ground taken by the Revenue is liable to be rejected. 16. We have carefully considered the submissions of the rival parties and perused the material available on record. We find merit in the plea of the ld. counsel for the assessee that the issue stands covered in favour of the assessee by the consistent view of the Tribunal in assesse s own case. Recently the Tribunal in ITA No. 2205/Mum/2004 for A.Y. 1998-99 (supra) after following the earlier order of the Tribunal for A.Y. 1997-98 has held vide para 40 to 42 of the order dtd. 20-7-2012 as under:- 40. In ground no.1 of this appeal, the Department has challenged allowing of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoked the provisions of section 14A of the Act. However, on appeal the ld. CIT(A) while examining the applicability of provisions of section 14A relied upon the decision of the Tribunal in the case of Maruti Udyog Ltd. vs. Dy. CIT (2005) 92 ITD 119 (Del.) wherein it has been held that even after deduction of section 14A, the Revenue has to establish the nexus of borrowed fund with tax free investment. In the absence thereof and keeping in view that neither the A.O. has invoked the provisions of section 14A and nor such ground has been taken by the Revenue despite the finding given by the ld. CIT(A) in this regard, we are of the view that the plea taken by the ld. D.R. at this stage is not maintainable and hence we reject the same. This being so, we respectfully following the consistent view of the Tribunal in assessee s own case (supra) decline to interfere with the order passed by the ld. CIT(A) in deleting the disallowance made by the A.O. The grounds taken by the Revenue are, therefore, rejected. ITA No. 3463/Mum/2010 (By assessee for A.Y. 2004-05) 18. Ground of appeal No. 1(a), (b) (c) are on the validity of reopening of assessment u/s 147 r.w.s. 143(3) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date on which the refund is granted , directed the A.O. to grant interest u/s 244A of the Act up to the date of issue of refund voucher. 27. At the time of hearing the ld. counsel for the assessee submits that this issue stands covered in favour of the assessee by the order of the Tribunal (supra), therefore, the issue may be decided accordingly. In support, the ld. counsel for the assessee has also filed the copy of the Tribunal order in assessee s own case in ITA No. 5136/Mum/2009 for A.Y. 1990-91 dtd. 2-7-2010. 28. On the other hand, the ld. D.R. supports the order of the A.O. and the ld. CIT(A). 29. We have carefully considered the submissions of the rival parties and perused the material available on record. We find merit in the plea of the ld. counsel for the assessee that the similar ground 2(c) was also taken by the assessee in its appeal in ITA No. 3857/Mum/2010 for A.Y. 1996-97. The Tribunal while relying on the earlier order of the Tribunal for A.Y. 1990-91 has restored the issue to the file of the A.O. vide finding recorded in para 22, 23 and 24 of the order dtd. 20-7-2012. In the absence of any distinguishing feature brought on record by the Revenue and re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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