TMI Blog1986 (4) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... om the First National City Bank, Delhi branch. The said bank was incorporated in U.S.A. The branch at Delhi carried on business in India. The income of that branch was assessed as income of the non-resident. The assessee claimed deduction of the said interest in computing the chargeable profits under the First Schedule to the Companies Profits (Surtax) Act, 1964. The said claim was made under rule 1(x) of the First Schedule. That rule reads as under: "In computing the chargeable profits of a previous year, the total income computed for that year under the Income-tax Act shall be adjusted as follows: 1. Income, profits and gains and other sums falling within the following clauses shall be excluded from such total income, namely:--- (x) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded. He, accordingly, confirmed the order of the IAC (Assessment). The department has now come in appeals before us. 3. The first contention raised by Shri S.E. Dastur, the learned counsel for the assessee, was that the words 'received from Government or a local authority or any Indian concern' did not apply to the words 'income by way of any interest' and as such, income by way of interest was liable to be excluded irrespective of the source from which it was received. We are unable to accept this contention. A bare reading of clause (x) indicates that the words 'received from Government or a local authority or any Indian concern' applied to the words 'its income by way of any interests or fees for rendering technical services'. Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to section 80-O of the Income-tax Act, 1961, where the expression 'received from a foreign enterprise' has been used. It is contended that the words 'foreign enterprise' in section 80-O would mean any enterprise located in foreign countries. Similarly, according to him the words 'any Indian concern' in clause (x) of rule 1 would mean 'any concern located in India'. We are unable to accept this contention. We are not concerned with the interpretation of words 'foreign enterprise' which appear in an altogether different setting and context we are concerned with the interpretation of words 'Indian concern' as used in clause (x) of rule 1. if the intention had been to make the provision in respect of geographical location in India or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be seen in order to determine whether a particular concern was 'an Indian concern' within the meaning of clause (x) would be whether the ownership, management and the control of a concern was substantially in India. In the present case, admittedly the City Bank is incorporated outside India and it is a non-resident company. Consequently, simply because it has a branch in India that branch cannot be termed to be an Indian concern. We are supported in the view which we have taken by the decision of the Madras High Court in CIT v. Craigmore Land Produce Co. Ltd. [1977] 110 ITR 730. We, therefore, uphold the orders of the authorities below on this point. 5 to 7. [These paras are not reproduced here as they involve minor issues.] - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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