Section 44C head office expenses issue admitted, while foreign exchange and DTAA questions were not entertained.

The Bombay HC confined admission of the appeal to the issue of section 44C and head office expenses. The proposed question on disallowance relating to unmatured forward foreign exchange transactions was treated as already concluded against the Revenue and therefore did not raise a substantial question of law. The suggested issue on a non-resident assessee's alleged option between assessment under the Income-tax Act and the applicable DTAA was not entertained because it did not arise from the Tribunal's order and had not been urged before the Tribunal. Questions 2 and 3 were rejected from consideration.

---

---

Issues: Whether the questions relating to applicability of section 44C to head office expenses, deletion of the addition on account of unmatured forward foreign exchange transaction, and the alleged need for a non-resident assessee to exercise an option between assessment under the Income-tax Act and the applicable DTAA were fit for consideration in the appeal.

Analysis: The question relating to the disallowance of the estimated claim on account of unmatured forward foreign exchange transaction was treated as concluded against the Revenue and therefore did not give rise to a substantial question of law. The question relating to the alleged option between the Income-tax Act and the DTAA was held not to arise from the Tribunal's order and was stated to have not even been urged before the Tribunal. The appeal was admitted only on the question concerning section 44C and head office expenses.

Outcome: Questions 2 and 3 were not entertained. The appeal was admitted only on Question 1 for further hearing.

---